New research from MIT Sloan professor Paul Osterman shows that workers who need the most employer-provided training aren’t getting it.
According to results from an early 2020 survey of 3,600 U.S. workers, white workers, college-educated workers, and standard workers received more formal and informal training than non-white workers, less educated workers, and those employed on a contract or freelance basis.
Whether the training that is conducted is too little or too much is hard to judge, Osterman said. “But it is clear that the training is biased away from the people who need it the most: namely, frontline workers.”
That disparity is likely to get worse because of the pandemic, said Osterman, whose expertise includes changes in work organization and public policy for skills training and employment programs. A lot of training, both formal (i.e., orientation, skills training, and workplace behavior) and informal (e.g., a colleague demonstrating how to perform a task) happens at the job site. But many workers have been away from their offices and work sites for the better part of two years.
Osterman is working on a new survey to study the pandemic’s impact on this topic. However, the 2020 survey does provide insights on the state of worker training.
Bad news for the bottom of the job ladder
Survey respondents answered questions about formal and informal training and whether they sought job training on their own. Osterman also delineated the “non-standard jobs” of contract workers and freelancers; those findings are expanded in a related working paper.
“A high-end information technology person could be a freelancer, but so is the security guard or the building cleaner. It’s hard to generalize,” he said. “But for people at the bottom of that [job ladder], they're not getting skills and training, they're not getting enough training from the place where they're assigned to work, [and] they're not getting enough training from their staffing agency.”
Only 38% of contract workers received formal training from their legal employer, and even less training at the site where they were assigned. Freelancers also received less formal training at their client sites, and in terms of informal training lagged behind standard and contract employees by as much as 36%.
Less than half of all surveyed Hispanic workers received informal training, while just 32% of high school educated workers received informal training. Factoring all types of workers together, 55% said they received formal training from their employers, and 47% said they received informal training from their companies.
Osterman’s survey does show that workers will seek out their own training at a place like a community college, through formal online courses, or just watching YouTube videos. But people with lower education levels had less confidence and familiarity with those external training opportunities. And there’s no substitute for employer-provided, on-the-job training, Osterman said.
“Informal training is widespread, and it's important, but there's obviously some sets of skills that you can only do in a classroom or in front of a computer, or working on a piece of machinery, or learning how to code,” he said.
Opportunities to invest in internal employees
The survey shows a majority of workers get workforce behavior training, orientation training, and safety training. What’s missing, Osterman said, is skills training: learning how to do your job, and the one above it on the career ladder.
“If you're a manufacturing firm or a biotech firm and you need technicians, if there's frontline workers out there who are not at that level yet, you could train them up into those technician jobs,” Osterman said. “But if you're just kind of ignoring those people with respect to who you train, you're kind of shooting yourself in the foot.”
A 2021 survey from research non-profit The Conference Board found that 80% of human capital executives said it was hard to find qualified workers. Osterman said one of the reasons companies are having trouble recruiting people is their own internal supply chains have atrophied due to a lack of employer-provided job training.
So what can companies do? First, think of training as an investment, Osterman said. Recognize that there’s no one-size-fits-all approach to training. And don’t fear training employees only to have them poached by a competitor.
Larger companies can create internal job ladders as incentives for employees to stay. They can also lean on their internal training staff, or they can bring in outside vendors to offer some level of training and equipment. This could be something like taking advantage of a local community college’s courses.
Smaller and medium-size firms with fewer resources to develop those job ladders have a couple of options, Osterman said. Businesses in a region (or an industry association) could put together a joint training program, for which they all share costs and risks. Another solution is to use local schools or a community college to handle the training, though the companies would need to be willing to help people with time off and tuition costs.
When it comes to contract and freelancers, there’s an opportunity for public job training programs to provide higher quality and more accessible courses to worker.
“I don't think we have any reason to think that one of those dominates the other in terms of quality or importance,” Osterman said of the training options. “It’s a question of how [many] resources the employer has, whether the local community college has courses or capacity to do what they want them to do, whether there are online programs that are quality programs.”