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1301.0 - Year Book Australia, 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2004   
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The cost of training Australia's workers

Introduction

This article provides an insight into the time spent and costs involved in developing and delivering work-related training in Australia. Information collected from the 2001-02 Training Expenditure and Practices Survey (TEPS), and the 2001 Survey of Education, Training and Information Technology (SETIT), have been drawn together to compare the cost of structured training from both the perspective of the employer and that of the employee. The article also looks at access to training from both of these perspectives. This article updates a similar article published in the Australian Bureau of Statistics publication, Australian Economic Indicators, May 1995 (1350.0).

Background

The TEPS, a survey of employers, was most recently conducted in respect of the financial year ending June 2002. The 2001-02 TEPS obtained information from approximately 5,900 employers on their structured and unstructured training practices, and their expenditure on structured training. In the TEPS, structured training refers to all training activities which have a specified content or predetermined plan designed to develop employment-related skills and competencies. It consists of instruction, or a combination of instruction and monitored practical work. Unstructured training includes all training activities which do not have a specified content or predetermined plan, including on-the-job training.

Between April and August 2001, the SETIT, a household survey, collected details from around 24,400 persons aged 15-64 years, on:

  • socio-demographic and employment characteristics
  • educational attainment
  • participation in education and training over the previous 12 months
  • work-related training courses completed in the previous 12 months
  • use of information technology.

Work-related training courses are those that have a structured format, with an orderly or methodical means of presenting or providing the training during a set period of time. Work-related training refers to activities that are undertaken primarily to obtain, maintain, or improve employment-related skills or competencies. footnote 1

The employer perspective

Training expenditure by employers

Gross direct training expenditure comprises the wages and salaries of persons employed as dedicated trainers, any fees paid to external training providers and other costs associated with the provision of structured training, such as the costs of training facilities and equipment, and travel, accommodation and meals for employees attending training. During 2001-02 gross direct expenditure on structured training by Australian employers totalled $4,018m, with the wages and salaries of dedicated trainers contributing $1,037m (or 26%) of this figure. The costs of providing training are offset to some extent by the receipt of subsidies and grants to be utilised for training purposes, and by payments received from external attendees of internal training courses. These receipts totalled $366m in 2001-02, resulting in net direct expenditure on structured training of $3,653m.

Net direct expenditure by employers on structured training to their employees in the same period was an average of $458 per employee. This level of expenditure varied between industries. Mining had the highest average expenditure on structured training ($1,643 per employee), while Retail trade had the lowest ($127 per employee) (graph 10.17).

Graph - 10.17 Average training expenditure, By industry - 2001-02


Indirect expenditure on training

Employers also bear the indirect wage and salary cost for the time during which their employees receive training. The 2001-02 TEPS did not collect data on the indirect cost of employee participation in training, but comparable estimates are available as unpublished data from the 2001 SETIT. In the 12 months prior to the survey, employees spent almost 122.9 million hours in training courses, at a total wage and salary cost to employers of approximately $2,634.1m.

Employer support for training

Employers may contribute directly to the cost of structured training in a variety of ways including: paying employees' wages and salaries while they attend training, paying employees' training fees, paying for employees' training materials and paying for employees' travel/accommodation expenses associated with training.

The 2001-02 TEPS collected information from employers about the different ways they provided support for their employees' structured training. Over 89% of all employers that provided structured training, paid for their employees' wages and salaries while they attended training. More than three-quarters of employers (77%) paid their employees' training fees, and half paid for employees' training materials. Larger employers more frequently provided support for structured training than did smaller employers. For example, 97% of employers with 100 or more employees paid for employees' wages and salaries while attending training, compared to 34% of employers with less than 20 employees.

The worker perspective

Results from the 2001 SETIT show that 37% (4,781,000 people) of the Australian population aged 15-64 years had completed at least one work-related training course in the 12 months prior to the survey. Some 7% of the population had completed four or more training courses over this period.

In the SETIT, wage or salary earners are people who worked for an employer for wages or salary in their main job during the reference week. In all, 8,261,600 work-related training courses (84% of all work-related training courses) were completed by wage or salary earners in Australia in 2001. For 89% of training courses completed by wage or salary earners, participants considered the skills gained from the training course to be transferable, that is, they could be used in a similar job with another employer.

Support for training courses and study

Almost three-quarters of work-related training courses were undertaken internally. Of the 27% of courses that were completed externally, 74% were completed with financial support. Public sector wage or salary earners were more likely to have received financial support to attend external training courses (78%) compared to the private sector (73%). Public sector wage or salary earners were also more likely to have completed internal training courses than private sector wage or salary earners (80% and 69% respectively) (table 10.18).

10.18 TRAINING COURSES COMPLETED(a), By employment sector(b) - 2001

Public(c)
Private
Not determined
Total
'000
'000
'000
'000

Internal training course
2,291.1
3,572.2
170.1
6,033.3
External training course
Received financial support
435.6
1,143.7
62.0
1,641.4
Did not receive financial support
119.4
432.9
34.5
586.9
Total
555.0
1,576.6
96.5
2,228.3
Total
2,846.1
5,148.9
266.6
8,261.6

(a) Wage and salary earners.
(b) At time of training course.
(c) Includes Defence Forces.
Source: ABS data available on request, Survey of Education, Training and Information Technology, 2001.

Full-time wage or salary earners completed 6,125,800 training courses in 2001, some 74% of all training courses completed. Of the courses completed by wage or salary earners, the majority (72%) were undertaken internally. By comparison, 76% of courses completed by part-time wage or salary workers were undertaken internally (table 10.19).

10.19 TRAINING COURSES COMPLETED(a), By employment status(b) - 2001

Working full-time
Working part-time
Total(c)
'000
'000
'000

Internal training course
4,427.9
1,462.0
6,033.3
External training course
Received financial support
1,322.7
272.8
1,641.4
Did not receive financial support
375.2
181.5
586.9
Total
1,697.9
454.3
2,228.3
Total
6,125.8
1,916.3
8,261.6

(a) Wage and salary earners.
(b) At time of training course.
(c) Includes courses where it could not be determined if the participant was working full-time or part-time.
Source: ABS data available on request, Survey of Education, Training and Information Technology, 2001.

10.20 TRAINING COURSES COMPLETED(a), By field of training(b) - 2001

Total training hours

Males
Females
Persons
'000
'000
'000

Management and professional
24,156.4
20,653.2
44,809.6
Technical and para-professional
12,438.5
8,249.6
20,688.1
Trade/craft
11,861.3
3,834.0
15,695.3
Clerical or office
1,157.7
3,761.7
4,919.4
Sales and personal service
3,687.8
4,679.0
8,366.8
Transport, plant and machinery operation
4,919.2
333.7
5,252.9
Labouring and related training
1,340.2
498.5
1,838.7
Induction
4,797.7
3,844.4
8,642.1
Supervision
2,351.2
1,324.3
3,675.4
Computing skills
7,745.1
6,394.3
14,139.3
Health and safety
8,285.2
5,747.2
14,032.3
Other(c)
290.1
1,099.7
1,389.8
Total(d)
83,030.3
60,419.5
143,449.8

(a) Wage and salary earners.
(b) This table relates to the number of courses completed not the number of persons. Estimates relate to a maximum of four training courses. Therefore, a person may contribute more than once to a given category and/or to more than one category. It relates to wage or salary earners at the time of training only.
(c) Includes courses in the fields of English language, Literacy, Numeracy, and Music and arts.
(d) Includes cases where field of training course could not be determined.
Source: ABS data available on request, Survey of Education, Training and Information Technology, 2001.

The average duration of work-related training courses completed by wage and salary earners was 17 hours in 2001 (table 10.21). For courses undertaken by wage and salary earners in the public sector, the average number of training hours per course was 19 hours, compared to an average length of 16 hours for courses undertaken by wage and salary earners in the private sector.

10.21 TRAINING COURSES COMPLETED(a), By average training hours per course(b) - 2001

Industry of employer(c)
hours

Agriculture, forestry and fishing
16.9
Mining
22.5
Manufacturing
20.4
Electricity, gas and water supply
16.6
Construction
15.4
Wholesale trade
16.5
Retail trade
14.2
Accommodation, cafes and restaurants
17.8
Transport and storage
19.9
Communication services
19.8
Finance and insurance
15.8
Property and business services
16.9
Government administration and defence
24.8
Education
13.2
Health and community services
13.8
Cultural and recreational services
16.3
Personal and other services
26.7
Total(d)
17.4

(a) Wage and salary earners.
(b) This table relates to the number of courses completed not the number of persons. Estimates relate to a maximum of four training courses. Therefore, a person may contribute more than once to a given category and/or to more than one category. It relates to wage or salary earners at the time of training only.
(c) Main period employer.
(d) Includes cases where industry of main period employer could not be determined.
Source: Data available on request, Survey of Education, Training and Information Technology.

Access to training

Training provision

The TEPS gives an insight into the reasons why Australian employers have undertaken to provide training for their employees. Employers were able to nominate more than one reason for providing training. Of employers who provided structured training to employees in the financial year ended June 2002, 55% reported maintaining professional status and/or meeting industry standards as the main reason for providing structured training. Staff development/advancement and improving the quality of goods/services provided were also important reasons (54% and 53% of employers, respectively).

The reasons for employers providing training varied between industries. The Electricity, gas and water supply industry most frequently reported legislative, regulatory, or licensing requirements as a reason for providing structured training (77%), whereas this reason was least reported by the Wholesale trade industry (20%). Employers in the Government administration and defence industry most frequently cited staff development/advancement as a reason for providing structured training (89%), compared with 36% of employers in the Construction industry (table 10.22).

10.22 EMPLOYERS THAT PROVIDED STRUCTURED TRAINING, By industry - 2001-02

Reasons why structured training was provided(a)

Legislative, regulatory or licensing requirements
Maintain professional standards and/or meet industry standards
Improve quality of goods and services provided
Respond to new technology
Develop and maintain a flexible and responsive work force
Staff
development
and
advancement
Other
Number of employers
%
%
%
%
%
%
%
'000

Mining
60.9
65.3
*43.3
*23.8
*36.9
*49.1
*21.2
1.0
Manufacturing
30.9
46.6
50.8
32.5
49.6
47.0
43.3
20.4
Electricity, gas & water supply
76.9
69.5
66.5
49.7
69.6
70.2
39.3
0.6
Construction
56.4
43.9
32.4
*19.1
*21.9
36.4
*14.4
42.1
Wholesale trade
19.5
42.6
64.8
41.9
54.6
59.0
21.6
18.3
Retail trade
31.2
45.3
61.3
32.3
48.0
42.6
29.0
37.7
Accommodation, cafes & restaurants
56.1
37.9
41.9
*23.8
*14.1
52.5
*32.2
12.7
Transport & storage
*59.9
*58.7
*57.6
*46.0
*38.0
*45.4
**28.6
*5.3
Communications services
*51.0
*76.4
*68.7
*61.4
*58.0
**33.5
**33.0
*1.7
Finance & insurance
59.0
64.3
39.6
*30.7
*19.8
61.7
*8.0
11.3
Property & business services
29.4
63.8
60.0
43.9
27.2
57.8
23.2
61.7
Government administration & defence
61.1
63.3
81.4
66.6
77.7
89.3
36.5
1.4
Education
*28.1
83.5
66.3
51.1
*41.7
80.7
*16.0
8.2
Health & community services
34.3
72.9
61.5
61.8
41.3
72.4
*16.6
28.7
Cultural & recreational services
**26.1
*38.2
*42.7
*20.3
*31.9
*40.9
*25.1
7.4
Personal & other services
44.4
55.4
46.8
*23.2
*35.1
65.4
*24.7
17.1
All industries
38.1
54.7
53.1
36.4
35.1
53.6
23.3
275.6

(a) Employers were able to give more than one reason therefore percentages may not add to 100% across the columns.
Source: ABS data available on request, 2001-02 Training Expenditure and Practices Survey.

Barriers to training

The 2001 SETIT further reveals that there were 2,931,600 people aged 15-64 years, who no longer attended school but wanted to undertake a work-related training course or courses in the previous 12 months. Of these people the main reason they did not undertake training was 'Too much work' (18%). Other main reasons were 'No time' (17%), 'Financial reasons' (14%), and 'Lack of employer support' (12%).

Males were more likely than females to list 'Too much work' as the main reason for not undertaking further work-related training courses (23% compared to 14%). Females were more likely than males to cite 'Caring for family members' as the main reason for not undertaking such training courses (12% compared to 1%).

Respondents in the 2001 SETIT who indicated that they wished to complete more training were also able to list all of the reasons that they did not undertake more training courses in the previous 12 months as well as the main reason. Again, the most common responses were 'Too much work' (17%), 'No time' (17%), 'Financial reasons' (14%) and 'Lack of employer support' (10%).

Endnote

1 For a detailed description of training and training courses in the SETIT, see the Glossary in Education and Training Experience, Australia, 2001, cat. no. 6278.0.
References

ABS (Australian Bureau of Statistics), Australian Economic Indicators, May 1995, cat. no. 1350.0, ABS, Canberra.
ABS, Education and Training Experience, Australia, 2001, cat. no. 6278.0, ABS, Canberra.
ABS, Employer Training Expenditure and Practices, Australia, 2001-02, cat. no. 6362.0, ABS, Canberra.

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