DOCUMENT RESUME

ED 304 581 CE 052 124

AUTHOR Carnevale, Anthony P.; Gainer, Leila J.TITLE The Learning Enterprise.INSTITUTION American Society for Training and Development,

Alexandria, VA.SFONS AGENCY Employment and Training Administration (DOL),

Washington, D.C.PUB DATE 89GRANT DOL-ETA-99-6-0705-75-079-02NOTE 61p.; Color graphics may not reproduce clearly.PUB TYPE Reports - Research/Technical (143)

EDRS PRICE MF01/PC03 Plus Postage.DESCRIPTORS Adult Education; *Corporate Education; Futures (of

Society); *Job Skills; *Job Training; *Labor ForceDevelopment; Off the Job Training; On the JobTraining; *Staff Development; *VocationalEducation

ABSTRACT

This publication summarizes research that shows thatit would be a serious economic error to favor investment in machines,financial capital, anC extracted resources over investments in theeducation and training of people. The discussion begins by explainingthe relationship between job-related learning, individualopportunity, and the competitiveness of employer institutions. Next,it exarines the dynamics that link changing skill requirements on thejob to training and education, This is followed by a snapshot of theexisting and emerging institutions that provide job-related trainingor access to it. The next section is a closer look at theemployer-based training and development system, in general, and thedifferences between small and large employers, in particular. Thefollowing and most sizeable section considers job-related educationand training in individual occupations. The discussion concludes withrecommendations for improving the nation's job-related education andtraining system. (YLB)

* Reproductions supplied by EDRS are the best that car be made *

* from the original document. *

the

LEARNINGENTERPRISE

The American Society forTraining & DevelopmentDonna McNamara, PresidentCurtis Plott, Exec. Vice President

byAnthony P. Carnevale

Leila J. Gainer

U.S. Department of LaborEmployment & Training AdministrationElizabeth H. Dole, SecretaryRoberts T Jones, Asst. Secretary

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.

CONTENTS

LIST OF TABLES

PREFACE

INTRODUCTION

Page

I

II

1

PART I SKILLS, INDIVIDUAL OPPORTUNITY, AND COMPETITIVENESS .2Skills and Opportunity 2Skills and Competitixeness 3The competitive cycle 4The American context 5

PART II A MAP OF "THE LEARNING ENTERPRISE" 6Changing Skill Reouirements 6Translating Requw,Inents Into Education and Training .8The Institutional Landscape . .9

Elementarx and secondary schools 9Colleges and universities 10Postsecondary occupational :ducation 11

Formal apprenticeship programs 13Second chance training 13The career support system 14The training industry . 15

Employer-based training and do,elopment 15Employer -Based Training and Development:A Closer Look 16

Small xersus large employers 18

PART III THE TRAINEES: AN OCCUPATIONAL PERSPECTIVE 23Managerial Personnel 23

Executixes 23Managers 25Supervisors 28

Management Support Specialists 30Nontechnical Professionals 30Clerical Personnel 32Sales Personnel 35Customer Service Personnel 37Service Employees 38Technical Workers , 39Technical professionals 41Technicians 42

Blue-collar technical employees .43Data Processing Personnel 45

PART IV CONCLUSIONS AND RECOMMENDATIONS 48Employers . 48Educators 49Government .50

FOOTNOTES 53

4

LIST OF TABLES

Page

TABLE 1 Formal Training by Sex and Race of Trainee 17

TABLE 2 Formal Training by Age of Trainee 18

TABLE 3. Formal Training by Source 19

TABLE 4: Formal Employer-Based Training by Industry, 1984

TABLE 5: Demographic Characteristics of Employees by Size ofEmployer (% of Employees) 21

TABLE 6: Employment 13 Size of Employer (% of Employees) 21

TABLE 7: Average Number of Hours Spent in Training Activitiesin the First Three Months on the Job, b Size of Emploer(% of Hours) 22

TABLE 8: Sources of Job-Specific Training bN Size of Employer(% of Employees) 22

TABLE 9: Sources of Qualifying and Upgrading TrainingAll Employees 24

TABLE 10. Sources of Qualifying and Upgrading Training:Managers 27

TABLE 11 Sources of Qualifying and Upgrading Training:Supervisors 29

TABLE z: Sources of Qualifying and Upgrading Training:Management Support Specialists 29

TABLE 13: Sources of Qualifying and Upgrading Training.Nontechnical Professionals 33

TABLE 14: Sources of Qualifying and Upgrading Training-Sales Personnel 33

TABLE 15: Sources of Qualifying and Upgrading Training:Service Employees . 36

TABLE 16: Percentage of Women, Blacks, and Hispanicsin Technical Occupations, 1986 30

TABLE 17: Median Weekly Earnings by Sex, 1986 (Dollars) 40

TABLE 18: Sources of Qualifying and Upgrading TrainingTechnical Professionals 40

TABLE 19: Sources of Qualifying and Upgrading Training.Data Processing Personnel 44

PREFACE

This publication summarizes a portion of the research conducted under a two-yearjoint project of the American Society for Training and Development and the U.S.Department of Labor. It represents a brief oven iew of the findings from our

organization and strategic role of training research. More comprehensive coverage of thistopic and other findings on the organization and structure of training will be available in1989 in four books:

ORGANIZATION AND STRATEGIC ROLE OF TRAINING explores how training is struc-tured, financed, and linked to the strategic goals of employer institutions. It also maps thesize and scope of training in employer institutions.

TECHNICAL TRAINING examines how technical workers get their training, what it costs,who provides it, how it links to strategic goals, and what the future holds for the technicalwork force.

ACCOUNTING AND EVALUATION includes an accounting model that represents a testedmethod of capturing training costs and benefits. It also explores effective evaluation methodsthat connect training to strategic change.

BASIC WORKPLACE SKILLS maps out the skills that employers want and charts thestrategic relevance of each skill. A model for establishing a basic workplace skills program,as well as generic curriculum for each skill, is included. In addition, a comprehensive BASICWORKPLACE SKILLS MANUAL will chart the step-by-step process for establishing a basicworkplace skills program. It will include charts and checklists for implementation.

The material in this project was prepared under Grant No. 99 -6- 0705 -75- 079 -02 from the Employmentand Training Administration, U.S. Department of Labor, under the authority of Title IV, part D, of theJoO Training Partnership Act of 1982. Grantees undertaking such projects tinder Government sponsor-ship are encouraged to express freely their professional judgment, Therefore, points of view or opinionsstated HI 1111c document do not necessarily represent the official position or policy of the Departmentrf Labor

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INTRODUCTIONt is human nature towaste that which isabundantly supplied.Throughout most of

this century, there appeared to be an oterabun-dance of American workers.

People were plentiful, but jobs were not. Theeconomy seemed to overflow with underem-ployed and unemployed people. Unemploymenthovered in double digits. Pundits said thetechnological bogeyman was loose again andlabor-saving machinery would soon make allworkers redundant. But things rarely remainstatic. As the century moved on, what startedout as an excess of American workers hasdwindled away to nothing. In fact, by the year2000, there are likely to be too few well-educated and well-trained workers to satisfythe nation's economic needs.

Americans are slow to recognize the new real-ity. Recent history encourages us to accept theview that educated and trained workers areabundant, and machinery, financial capital,and natural resources are scarce. This percep-tion began with the Great Depression, whichAmericans remember as an episode when adangerous and growing army cf the unem-ployed was dispersed with make-work jobsAfter World War II, the economy boomed,fueled by the pent-up demand for consumergoods that had been building throughout thewar. Thereafter, growth was sustained by asurge in buying on personal credit The lessonlearned in the postwar expansion was to valuepeople for their purchasing power and not ascritical factors of production.

The postwar baby boom has influencedAmerican thinking, also. The United States hasbeen forced persistently to reshape its economyand social structures in order lo bear, feed,clothe, educate, employ, and house the 76 mil-

lion members of the American baby boom. Asthe boom ages, it has shouldered its way intoAmerican hospitals, schools, and labor mar-kets, successively overw helming each and thenleaving it bloated and vacant. People who hatehad to provide for the baby boom, and the bababoomers themselves, who hate spent a lifetimein one queue or another, are easily convincedthat there are too many people and too fewhospitals, schools, jobs, house:: , and newpromotions

When the baby boom moved inti the work-place it found too few good jobs and promo-tions to go around But the generations that willfollow will be small in comparison with thebaby boom. Unfortunately, the sense that peo-ple are oversupplied may mislead Americansinto a strategy that favors investment in ma-chines financial capital, and extracted re-sources over investments in the education andtraining of people. In a very short time, hot,.ever, such a course of action would prose aserious economic error.

This discussion challenges the biasesspawned by recent economic history. It beginsby explaining the relationship between job-related learning, individual opportunity, andthe competitiveness of employer institutions.Next, it examines the dynamics that link chang-ing skill requirements on the job to training andeducation. This is followed by a snapshot of theexisting and emerging institutions that pros idejob-related training, or access to it. The nextsection is a cicser look at the employer-basedtraining and detelopment system, in general,and the differences between small and largeemployers, in particular. The following andmost sizeable section considers job-related edu-cation and training in individual occupations.The discussion concludes with recommenda-tions for improving the nation's job-relatededucation and training system

7

1

WaseelMS.

Aicsor

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PART ISkills, Individual Opportunity, and Competitiveness

Skills and Opportunity

he association betweenskills and opportunityfor individual Americansis powerful and growing.

Skills influence lifesty le, the kind of work onees, and where one does it.

Skills lex ei.ge an nick idual's earn-ings. On ax erage, learning in school andon the job accounts for about half of

the differences in wat peo-ple earn in the United

States.' Career and loca-tional choices, chance,and opportunity account

for the otherhalf. Each in-di. idual maytrade earningpower for a pre-ferred location,

occupation, or employer. But individuals withpoor skills do not haze much to bargain with;they are condemned to low earnings and lim-ited choices.

Most studies show that, among Americans,about 10 percent of the differences in earningsover a lifetime can be attributed to preemploy-ment learning in school. But this small figuremasks wide xariations in the importance ofeducation in determining earning potential. Forinstance, education is more important in deter-mining earnings of employees in high-tech in-dustries than in other industries. In high-techindustries, earnings of a high school graduateare twice those of a dropout; earnings of a col-lege graduate are twice those of a high schoolgraduate; and earnings of soineone with a post-graduate education are 30 percent higher thanearnings of a college graduate.' Ostensibly,

education is a particularly good imestment inthese industries because it prepares employeesfor the highly skilled jobs these industries gen-erate, and because it produces adaptable em-ployees w ho can cope with rapid technicalchange.

Education also improves earnings because itleverages learning on the job. Skill learned inschool and skills learned on the job are comple-mentary. For instance, compared with persons

ho have only a high school diploma, thosewith two sears of formal education beyond highschool haze a 29 rercent greater probability ofgetting training on the job. College graduateshaze a 50 percent greater probability of gettingtraining on the job than high school graduates.And in most American industries, workers witheducation beyond tour years of college have a30 percent greater probability of getting train-ing on the job than college graduates. In high-tech industries, postgraduate education in-creases the probability of receix ing training onthe job by almost tw ice as much as a collegedegree.3

Although educational attainment certainlyinfluences earnings, learning on the job has themost powerful and substantial effect on earn-ings. Studies by Lillard and Tan,4 Bishop,' andothers consistently show that persons who re-ceive formal training on the job enjoy an earn-ings' advantage of 25 percent or more overthose who do not receixe formal training in theworkplace.

Training in the workplace has effects on pro-ductix ity and earnings beyond the current job.Most people, after all, use w hat they learn ontheir current jobr to get new and better jobs. Ac-cording to Lillard and Tan, employees who timehad some formal training on a prior job earn 18percent more in their c rrent job than those

O

who have had no formal training on a prior jobThosc who have had informal training on aprior job earn 20 percent more than those whohave not had informal training on a prior job!'

Workplace training also seems to haze a moredurable influence on earnings than educationand training from other sources. The positiveeffect of workplace learning on wages lasts 13

sears, compared xx ith 8 sears in the case oflearning in schools

How training affects earnings depends on thesubject matter, as well as the pro\ ider Manage-ment training and professional and technicaltraining increase earnings mole than otherkinds of training (16 percent and 14 percentmore, respectively).8

Skills and Competitiveness

ducation and trainingare critical not only toindividual opportunity,but to the productivity

and competitive advantage of employing in-stitutions and whole nations as well. Learningin school and learning on the job are by far themost important factors accounting for Ameri-can economic growth and productivity in thiscentury and will determine the nation's eco-nomic prospects in the next. In fact, both for-mal education and learning on the job hazebeen consistently more importai, than ma-chine capital in expanding the nation's pro-ductive capacity throughout this century Be-tween 1929 and 1982, education prior to workwas responsible for 26 percent of the expansionin the nation's products e capacit. Learning onthe job contributed ox er half, about 55 percent,of all improvements in the nation's productixecapacity Machine capital contributed a respec-table but disappointing 20 percent.9

Further, the economic importance of school-ing and learning on the job is increasing. Th.?

Learning on the job

CONTE4WTION TO ECONOMIC GROWTH,1929-1182

4=11.

Educationalpreparation Economies

of scale

1

economic history of the modern world showsacquired human skills inexorably replacingnatural and machine resources as the basicbuilding blocks of production and servicedelivery. In 1890, resources from the earth, in-cluding minerals, energy, and food, accountedfor 50 percent of the gross national product.Today, these same resources account for lessthan 10 percent of production and services. Incontrast, human resources now account formore than four fifths of the nation's total eco-nomic output The acquired skills and abilitiesof the population have become the pixotalrecoi rce '°

In the last century, economists routinelxlisten land, labor, and capir-I as the factorsessential for economic production, but in thepostindustrial economy, land is no longer aprime factor of production. Available data sug-gest that land played no part in the productivityincreases between 1948 and 1966 and nad anew-ltive impact on productivity between 1966and 1978."

In the w )rld economy today, high-skilled,technology- nten-.: production and services

60

- 50

Improved 40

iesouree - 30allocation Capital

Size - 20

Landof the

labor force10

0

- -10

- -20

Scum Adaptor' from Edward F NMI= No* In Amottcan&enema Growth, 1929-1182.

M181 NMI NMI

4

are concentrating in developed nations, andlow-skilled, technology-poor production andservices are concentrating in less developed na-tions. The competitive advantage of the lessdevelop, d nations lie: with their low-wage, low-skilled labor pool. The competitive advantageof developed nations relies on the applicationof technological advances in combination withan increasingly skilled and adaptable workforce. As America's baby boom moves toward re-tirement and birth rat: stay low or decline, theUnited States will find it increasingly difficultto match sweat equity with the millions of newworkers coming of age in less developed na-tions over the next quarter century. Conse-quently, the nation can no longer compete onthe basis of low-wage/low-skill production, butmust shift to a service- and information-basedecenomy in which highly skilled persons andlarge doses of technology are the critical fac-tors of production.

In the United States, a mutually reinforcingmix of economic, technical, and demographicfactors is bringing the human capital issue tothe forefront of national concern. Employersare increasingly dependent on the skills of alltheir employees for improvements in efficiencyand quality, customer sers ice, and the develop-ment of new applications for existing productsand services This increasing reliance onhuman capital in the woi kplace is on a collisioncourse with the emerging demographic realityin the United States: the quantity of humanresources available for entry-level jobs isdeclining. Moreover, the quality of entry-levelemployees is declining as more and more youngworkers are drawn from populations with in-sufficient human capital investments prior towork. The United States faces a growing humancapital deficit that threatens both its competi-tiveness and its ability to provide work for eeryeryable-bodied American

The Competitive Cycle

The competitive cycle is the process by whichinnovations are developed and brought to themarketplace. This cycle can be divided into fourphases:

discos ering or developing an innovation,as a cost sas mg, quality impros ement, or newproduct or sers ice,

tailoring the innovation to the employer's in-stitutional culture, strategic niche, and produc-tion or service delivery s_s stem;

utilizing the innovation in production or de-livery of the new product or service to the mar-ketplace; and

developing new applications for theinnovation.

"Cycle time," the time it takes to turn inno-\ ations into cost savings, quality improvements,or new products or services, is critical to win-ning economic competition. The speed withwhich individual employers and whole nationsget Irmo\ at ions into the marketplace separatesti'e economic winners from the losers. Learn-ing and skill development are key ingredientsin developing innovations and reducing thetime it takes to get them to the marketplace.

Learning is critical to the competitive cyclefrom the Very beginning. In order to generateinnovations, employers need to be able to learnfrom their own employees and customers, aswell as the outside world. In the initial dis-covery phase of the cycle, employers needstructures that allow them to learn from the ex-ternal research and development (R&D) com-munit\ They also need internal structures thatallow them to learn from their own employees'experiences in producing and testing productsand services and from their customers' use ofexisting products and services.

In the tailoring and design phase of the com-petitive cycle, roles are uncertain, job assign-ments are broad and overlapping, and employ-ers rely heavily on employees' creativity,problem solving and team skills. The more in-velvement on the part of all the affectedemployees, 'he better. An elitist approach totailoring and design can lead to production orservice delivery problems down the line.

In the production or service delivery phase,the employer relies on the skills of productionand service workers to implement the originaldesign and to develop new quality improve-ments and cost-effective ways to produce prod-ucts or deliver services. Similarly, in the finalphase of the competitive cycle, the employe

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relies on employees :nth hands-on productionand service deliver: experience or customercontact to develop new applications for theoriginal innovation.

The American Context

Cycle time is generally too long in the UnitedStates. It takes the Japanese 40 months to geta new car to market; it takes Americans 60months. The United Kingdom is able to getpharmaceuticals to the market in 2'2 months,one half the time it takes Americar dhar-maceutical companies.

The strength of the American economic sys-tem has always been in the early phases of thecompetitive cycle. The United States has alwaysbeen good at initial innovation, but less compe-titive in the production phase. Not surprisingly,the nation's learning system demonstrates par-allel strengths and weaknesses. The elementaryand secondary schools are good ^,t providingacademic preparation for the college bound,but less good at educating and training non-college-bound youth

Occupational preparation for noncollege-bound youth has less standing than academicpreparation in the American education system.As a result, academic learning suffers from notbeing more applied,and applied learningdoes not meet basicacademic standards.The postsecondaryeducation system isstrongest in the four-year institutions thatproduce professional,managerial, and tech-nical elites critical toinitial innovations.Except fo a scatter-ing of excellent juniorcolleges, technicalschools, and sometraining in the mil-itary, postsecondaryeducation and train-ing for noncollege

THE COMPETITIVE CYCLE

yJuth is often weak r nonexistent Unfor-tunately, however, it is the noncollege :oathwho eventually work at the point of productionor sen ice delivery. Their lack of prepa -ationmakes us less competitive in the productionand delivery of products and sen ices and th2development of new applications

Employers' strengths and weaknesses in con-necting learning to the competitive cycle areparallel to those of the educational system. Ingeneral, the American employer relies or exter-nal R&D for new strategies, technologies, prod-ucts, and services. To the extent that employersdo have R&D systems, they tend to focus on thediscove:y and design phases of the competitivecycle and rely heavily on managerial and tech-nical elites. Relatively few American employershave systems for using production, service de-livery, or customer service workers to improveefficiency, improve quality, or develop newapplications.

Employers' training systems mirror thesetendencies. Only a third of the nation'semployees get any formal training at all afterthe go to work. Infor:- al training, -Lich ascoaching, is three to six times as common asformal training Training and developmen, isconcentrated among white-collar and technicalelites, with production and sell ice del ix er per-sonnel receix ing much less trainin.'2

PART IIA Map of "The Learning Enterprise"

Any attempt at mappingthe American learningenterprise needs to beginwith a warning: The

American learning enterprise i., a crazy quilt ofinstitutions and programs that serve Yariedpurposes There is no best institution, no besteducation or training practice, or no singleeducation and training obiectR e that domi-nates all others. EY erything seems to work

sont,n here, and nothing works eerywhere.The folloy ing map is an attempt at a rough

ordering of the lean ling enterprise. It beginsy ith a description of the process by whichchanges on the job accumulate into ney train-ing and education requirements, followed by athumbnail sketct. of the \arious institutions onthe education and training landscape. The finalsection in Part II takes a closer look at work-place learning in small and large employerinstitutions

Changing Skill Requirements

t is difficult to unravelthe complex set of forcesthat result in skillchange in the workplace.

As yith so many processes in the real world,causes and effects are so tightly tangled thatthey ar, difficult to separate from one another.Choosing a strand to begin loosening and un-ray cling the knot of economic change is largelya matter of taste. It is useful to begin with tech-nology because it is the most oby ious strandTechnology tends to be tangible. Moreover, inrecent years, technology has been primaryamong the various forces that haw led tochanges in work requirements

The most dm ious result of new technology isthat people nc,(.1 more and better skills. In gen-eral, employees need good reading skills to readoperating manuals In manufacturing, theyneed better computational skills in order to setthe specs and sizes of particular product runs,as yell as to provide some statistical controlover quality. The new information technologyallows a service deliverer to access, use, andcontribute to the employer's entire informationbase, so seryic= employees requite computa-tional skills to use and record quantitativeinformation accurately and effectively, espe-

cially in mathematically-based industries, suchas finance, insurance, and real estate.

A related effect of new technologies is thatthey make individual employees and workingteams more autonomous. Production and ser-y ice delivery employees are able to control theoverall shape and quality of their products orser\ ices. Also, nroduLts and services can be tai-lored for individual customers. Moreover, tech-nology tends to diveisify product offerings. Forexample, the financial services industry nowoffers a panoply of financial services, ratherthan relying almost exclusively on checking.And the communications industry no longerrelies so heavily on telephones.

Many employers have recognized the impor-tance of the autonomous employee for effici-ency, quality, customer relations, and thedevelopment of innovations and new applica-tions for existing products and services. Theseemployers have concluded that traditional top-dtty n authority structures frustrate the auton-omous work team and reduce efficiency andquality, thwart good customer service, and don')t take advantage of the ability of either theautonomous worker or the autonomous v -kteam to develop new applications and innslions. The result has been experimentation ydecentralized institutional structures that pu,..

12

authority 'nd resources toward the point ofproduction and set-. ice delhery Managersmaintain control by flattening hierarchies toimI ive communications between managersand front-line employees. Because it is difficultto manage the autonomous employee of theautonomous work team, managers focus on theoutcomes of work efforts and not on the control

. work processes. The rely on outcome mea-sures of efficiency and quality and, if outcomesprove unsatisfactoi v, they intervene to provideresources for improvement.

The autonomous employees in the brae newworkplace require substantially greater skillthan their predecessors. The) need self-management skills. They need vaniwork skillsto be effective members of the working team.They need interpersonal and communicationskills to interact with customers, superiors, andteammates successfully Aod they need organiz-ational skills to be successful in the flattened,more flexible organizational structure.

Technical changes affect skill and learningrequirements by changing the nature of jobs.Sometimes technical change can eliminatewhole job categories. The internal combustionengine eliminated the buggy whip maker. Theautomatic elevator eliminated the elevator op-erator. Usually, changes accumulate in smalldoses, altering occupations over time throughinformal learning on the job. In some cases,skill changes accumulate to the point wherethey recombine several labor-intensive jobs intofewer .,'obs for more highly skilled employeeswh use more technology. This has been thecase with much of the recent technical change.

Over the past decade, the most prominent ex-ample of this process has taken place on the fac-tory floor. At one time, the machinist was theleader and central figure on the working team,whose job was to apply various technologies toshape individual parts of a final product.Career advancement depended on sharpeningthe essential job skill of hand-to-eye coordina-tion. Eventually, when the machinist's hand-to-eye coordination skills were good enough, he orshe became a tool and die maker. Enter therobot, with more consistent hand-to-eye coor-dination than the machinist. The robot took themachinist's place.

At the same time, the technology of ad. zincedautomated manufacturing began doing the jobsof other members of the shop floor team, in-cluding the laborer, the materials handler, theorcrator-assembler, and the maintenance per-son. Ultimately, all these jobs became one jobfor a single employee, the manufacturing tech-nician. Although the new job may not requirethe sanie depth of skill in each of the more nar-row jobs it absorbed, it does require a wider va-net. of basic skills than any one of the otherjobs.

The expanding range of tasks and responsi-bilities in the manufacturing technician's jobdemands higher levels of reading, writing, andcomputation than the old factory jobs. Gen-erally more autonomous than the machinist,the technician must hate more personalmanagement skills. Also responsible fcitrouble-shooting, maintaining, updating, andexercising quality control over highly complex,mathematically-based machinery, the techni-cian must have better computational skills andbe able to read and to comprehend technicalmanuals. In addition, these new tasks demanuthe skills to adapt successfully to the joblearr ng to learn, creative thinking, and prob-lem solving.

There are other current examples of the samephenomenon in other industries In services,the secretary is evolving into the informationmanager, and the bank teller is becoming thefinancial services portfolio consultant for indi-vidual customers.

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Translating Skill Change Requirements Into

Education and Training

echnical, strategic, andother factors thatchange skill require-ments give rise to new

learning needs. In broad terms, the learning re-sponse to changing skill requirenwnts movesthrough a regenerative cycle that begins withthe need for informal training to satisfy new jobrequirements. As ,:ie requirements becomemore wide spread, the institutional learningemphasis shifts to the external providers of for-mal education and training. The learning cyclecomes full circle when graduates and complet-ers of formal training enter the work force and,in turn, create new learning requirementswhich begin the cycle all over again.

The initial phases of a major innovativechange are highly unstructured. Job assign-ments are broad and , erlapping." The ;mplica-tions of the innovation for individual jots andskill requirements are unknown. New learnin,,tends to be experimental, informal, and on the

THE SKILLS CHANGE CYCLE

job. The novelty of training needs precludesbuying training from external providers. More-over, at this stage, many employers view theirnew knowledge as a competitive advantage and,therefore, proprietary.

Eventually, the employer institution inte-grates the innovation into the production or ser-vice delivery system, and new skill require-ments become known and stabilized. Jobassignments become more specific, and pro-duction or service delivery more routine. At thisjuncture, new training needs can become moreformalized, and if they extend to a sufficientnumber of people, formal courses become costeffective. Depending on the number of employ-ees involved, employers will either provide theirown training or buy customized training fromoutside providers who can customize trainingtailored to particular employer needs.

Job-specific skill changes can accumulate tothe point where they affect the occupationaland professional education system, located pri-marily in secondary and postsecondary voca-

1 4

tional schools. Skill changes may ti er createwhole new occupations and professioi,,. Man-ufacturing engineering is a recent case in point.Initially, employers developed their own man-ufacturing engineers by upgrading the skills ofsuper\ isors and machine operators with infor-mal on-the-job training (OJT) and, later, formaltraining. Eventually, the noncollege occupa-tional training system began to offer moregeneric training programs, and when sufficienttheory accumulated to complement appliedknowledge, academic courses beg2 n to appearin college and university engineering programs.In the end, manufacturing engineeri, becamea professional specialty in the engineeringcommunity.

When accumulating skill changes increasebasic educational requirements, elementaryand secondary schools are affected, too. For ex-ample, as discussed earlier, today's new math-ematically-based technologies require be -r

computational and literacN skills, and the struc-tures require employers with more interper-sonal and org nizational skills. The increasedimportance of the working team suggests theneed for better communications and teamworkskills.

Of course, not eY ery skill change ey olyes di-rectly into a major new skill requirement, awhole new occupation, or a new basic skillrequirement. In many cases, the need for incre-mental skill changes that occur after a partic-ular innovation require less and less upskillingas time goes by.'4 The skill requirements of a jobmay actually become less for a time, as tasksare automated and human responsibilitiesbecome fewer and more routine. At some point,however, jobs with limited and routine respon-sibilities are automated out of existence or in-tegrated into other jobs, adding both machinecapital and responsibility into those jobs andincreasing skill requirements.

The Institutional Landscape

Whether for upgradingcurrent employees orpreparing entry-levelworkers, employers and

external education and training institutions arepartners in the learning enterprise. This sectiondescribes briefly the various institutionsinvolved.

Elementary and Secondaryschools

The elementary and secondary school systemis the largest component of the nation's educa-tion and training system. The nation's publicand private elementary and secondary schoolscurrently serve 40 million students at a cost of$150 billion per year.

Schools serve three masters: American cul-ture, the political system, and the economy.

American culture values individualism aboveall else, and the American political system ispredicated on participation. Thus, the schoolsare responsible for developing autoneinous in-dividuals who can contribute to the A meric ancommunity and participate in the Americanpolitical system.

The economic role of the schools is pivotal.The schools are charged with husbanding anddisseminating knowledge that will create thenext technology and the next set of employers,jobs, and employees. In the short term, however,the quantity and quality of jobs are essentiallygiven, and education has only a marginal effectin creating jobs by making high-quality labora better investment than machine capital. Theschools' short-term mission, therefore, is toeducate for existing jobs. They do so by provid-ing generic basic skills to make people readyfor work and for learning on the job. In addi-tion, the nation's secondary schools provideoccupational education to about 5.5 millionstudents at a cost of about $6.5 billion per year.

15

The school systeni's ability to prepare peoplefor work is the keystone to its cultural andpolitical roles. American society is based on\ cork. A job is the symbol of personal worth andthe price of admission into the mainstream ofthe American community. Persons unpreparedfor work disappear from the community, dropout of the political system, and fall Intounderground cultures and economies outsidethe mainstream of American life. The UnitedStates' huge investments in schooling reflectthe nation's faith that education creates anautonomous and econom'rally independent cit-izenry ready to participate ulture and polity.

Arguably, the nation's schools are its most ef-fective institution. As of October 1985, 86.5 per-cent of whites, 82.5 percent of blacks, and 70percent of Hispanics had received a high schooleducation. Overall, 86 percent of young adultsages 25 to 29 were high school graduates, twicethe percentage for 1940. The annual dropoutrate fell from 6.3 nercent in 1973 to 5.2 percentin 1983, with young black 'nen showing themost improvement.' 5

Despite these gains, there are considerableeducational attainment gaps, particularly thatremain among race and ethnic groups and vari-ous economic strata. Black and Hispanic teen-agers are far more likely tolea'x school beforegraduating than are white youths, and pooryouths, regardless of race e- e' nnic group, arethree to four times mere lil , :) trop out thanstudents from higher incoti In 1985,only 56 percent of black an 3 of of ,k bite

18- to 21-year-olds from lt:S hadearned a high school dq . I panics at alleconomic levels are espe. . '' at risk for leav-ing school early."

Concern for the quality of schooling hasmoved beyond the traditional focus of the eco-nomically and educationally disadvantaged toconcern for the schooling of all the nation'schildren. This broader interest was bestexpressed in a report by the U.S. Department ofEducation, which warned dramatically that theeducational foundations of American societyare presently being eroded by a rising tide ofmediocrity that threatens the nation's future."

Educational reform has become a top prior-10 ity for politicians and policymakers concerned

about national competitiveness While there is,till a lob to be done in eliminating dropoutsand providing access for special populations,the schools have performed a remarkable featin their improNement in the rate of high schoolgraduation. However, elementary and seconclan schools must contribute to the nation'sproductive capacity by continuing to makefocused quality improvements. So far, reformshave been on the right track by putting greateremphasis on improving basic academic skills(reading, mathematics, and the sciences); ex-panding the traditional curriculum so it nowincludes the interpersonal, teamwork, andorganizational skills needed in the workplace;improving the quality of teaching/training; andtesting both teachers and students for subjectcompetency attainment.

Of particular concern to education reformersis the quality of education available to generaland vocational education students, who to-gether make up about 61 percent of the highschool student population. This "other half" ofthe high school graduating class appears to bereceiving a poor basic skills education and out-dated occupational preparation that ultimatelylimits their opportunities and effectiveness inthe workplace. Reformers tend to agree thatthis population requires new curricula that in-tegrate the basics with job-related learning.

Colleges and Universities

The college and university system preparesthe nation's white-collar and technical elites, in-cluding managers and professional specialists(e.g., teachers, scientists, engineers, doctors,lawyers, accountants). The United States sup-ports 156 universities and 1,853 colleges witha combined enrollment of almost 8 millionstudents. These institutions spend almost $80billion annually, or roughly $13,000 perstudent.

Twenty-two percent of all 25- to 29-year-oldshave completed four years of college, nearlydouble the figure for 1963 and four times thepercentage in 1940. Long-term relative educa-tional gains for black youth have been evenmore dramatic than for white youth. The pro-

1 6

portions of both high school and collegegraduates among black south have risen seven-fold since 1940.

College and university graduates tend to keeptheir skills current, whether to meet certifica-tion or licensing requirements or to meet self-imposed standards of their professions or oc-cupations. They rely more heavily on schoolingto prepare for work than do other Americans.Their upgrading after employment comes froma mix of postgraduate education, the offeringsof professional societies, and employer-sponsored training. Compared with otherAmericans, college and university graduateget the most preparation before they go to workand the most formal and informal trainingwhile they ,re on the job.

Colleges and universities provide more quali-fying and upgrading training for Americansthan all other schools combined. They providedqualifying training for 16.1 million persons andupgrading for 5.5 million persons in 1985.'8

But their economic importance is not limitedto their ability to teach and retrain Americans.The four-year institutions are also a principalsource of the nation's R&D, which ultimatelydrives new innovations, skill change, and educa-tion and training requirements.

The importance of college education is notlikely to decrease any time soon, given the im-portance of R&D and the fact that, with the ex-ception of teachers, occupations requiring col-lege dt. grees are the fastest growing. Moreover,as high school completion rates continue to in-crease, quality improvements in high schooleducation, college, and other forms of postsec-ondary education will be the principal meansfor leveraging the economic contributions ofeducation in the United States.

The principal challenge for American col-leges and universities will be to find ways todeliver education less expensively to studentsin order to reach a wider student population.The need to reduce costs will be compiundedby the fact that as more and more jobs requirecollege education and more and more workershave college degrees, the competitive advantageof college degrees will decline, driving down thevalue of the degree relative to cost. The relativecosts and returns may encourage many people

,, .) ....

to attend two-year schools and other kinds ofpostsecondary institutions. Evidence suggeststhese dynamics have already begun' 9 To reducecollege costs to American families, people arecalling for a mix of cost-cutting in the collegesand larger public subsidies to families withchildren in school and to students.

Increasing college enrollments are due notonly to the large number of young pecple of col-lege age, but also to an increase in the nuinberof older students. Between 1972 and 1976, theproportion of students age 25 and older in four-year institutions rose from 28 to 33 percent ofthe total college population. Much of the in-crease is attributable to female college studentsover age 35. Their number climbed from418,000 in 1972 to 700,000 in 1976, a 67.5 percentincrease. Enrollments for all persons age 25 andover increased 44.6 percent during this sameperiod."

Although colleges and universities have longbeen involved in the education of adultsthrough their continuing education and exten-sion departments, the shift to an older studentpopulation has led to (or perhaps been partiallycaused by) a need for new options 4.o accommo-date their changing requirements. Admissionsand formal entry qualifications have beeneased, classes are scheduled at times andplaces more convenient to working adults,radio and TV have been used to transmit coursematerial, and independent study has been en-couraged. A tew colleges and universities alsoprovide credit for nontraditional learning ex-periences in various external degree programs.As the United States' population continues toage, colleges and universities will undoubtedlyface an even greater challenge in adapting tothe needs and expectations of an older citizen.

Postsecondary OccupationalEducation

The postsecondary occupational educationsystem is the principal system for preparingand upgrading the half of high school graduateswho do not go on to college and who ultimatelypopulate the nonsupervisory work force as

17

11

technicians, technologists, and craft and skilledworkers. Vocational schools, junior collegesand technical schools, the military, and employ-ers are the principal providers of occupationaleducation after high school.

The junior colleges and technical institutesare the foremost providers of qualifying train-ing and upgrading in this system. According tothe Bureau of Labor Statistics, junior collegesand technical institutes provided qualifyingtraining for about 5 million workers and up-grading for 3.3 million workers in 1985.2' Theseschools tend to provide job-related educationfor a highly motivated group of noncollegestudents (nurses, health technicians, electri-cians, computer technicians, etc.).

Junior colleges and technical institutes havebecome an increasingly important source of oc-cup tional training in communities across theUnites States. In 1933-34, there were only 532two-year colleges nationwide, with an enroll-ment of just over 110,000; in 1983-84, thenumber of two-year institutions had risen to1,219, and full-year enrollments to nearly 5million. About 55 percent of all college fresh-men were enrolled in community, technical,and junior colleges. Counting the estimated 4.5million noncredit enrollees, total enrollmentsin junior colleges and other two-year institu-tions reached nearly 10 million in 1983-84. Re-flecting the attraction of community colleges toadult learners, the average age of the studentbody is 29.22

The appeal of these institutions to adultlearners derives from a variety of factors, in-cluding affordable tuition and fees,23 liberal ad-mission policies, accessibility (courses are fre-quently offered , ,ite at businesses, unionhalls, and other oft impus areas), a wide rangeof course offerings, and flexibility of classscheduling (most schools are open from earlsmorning to late evening). Flexible scheduling isespecially important because a large percen-tage of both full-time and part-time students atthese schools are employed while attendingclassLs.24

In addition to the junior colleges and tech-nical institutes, there are noncollegiate voca-

12 tional schools. They provide job-related tiain-

ing in many of the same areas as the juniorcolleges, but tend to specialize in le,- s technicalfields, such as barbering, hair dressing, andtruck driving. These institutions provided qual-ifying training for 3.7 million workers and up-grading for 1.6 million workers in 1985.

Vocational institutions are the likely trainingvehicle for the growing mass of technicians ;nmanufacturing and service industries, espe-cially health care and financial services. Thewschools offer a relatively cheap alternative forhuman capital des elopment beyond highschool. The major challenge that confrontsthem is the quality of their offerings and theirability to provide access to four-year schools forgraduates who Want to move to full professionalstatus.

Military training, also part of the postsecond-ary occupational education system, accourfor the largest share of government training ex-penditures. For fiscal year (FY) 1989, $17.6 bil-lion W, as appropriated to provide 249,168 "manyears" of training to persons in all servicebranches.25 The types of instruction offered in-cluded basic recruit training, officer prepara-tion (Reserve Officers Training Corp (ROTC),military academies, Officers Candidate School(OCS), etc.), medical training, professional de-velopmtmt, and reserve training.

In addition to the basic and specialized train-ing offered by the military, each service branchhas developed cooperative arrangements withcis ilian schools to enable service personnel toearn high school diplomas or work toward col-lege degrees. Seve.al credit-by-examination andcorrespondence programs are offered, also.Finally, the Army, Navy, and Marine Corps havedeveloped registered apprenticeship programs,which enable enrollees to receive credit fortheir service experience in cis ilian apprentice-ship programs.

According to the Bureau of Labor Statistics,the military has pros ided qualify ing training toalmost 2 million Americans currently in theworkforce. Job-related training in the militaryis concentrated in electronics, computers, andaircraft engine repair 26

The military uses distinctive training tech-nologies and methods of delivery. Its principal

contribution is to develop training practicesand technologies and disseminate them to thecivilian education and training institutions.

Formal Apprenticeship Programs

Formal apprenticeship programs, which nowapply to some 415 trades, include both class-room instruction (a minimum of 144 hours ayear) and hat ds-on learning (a minimum of2,000 hours, or one year of OJT). Under the Na-tional Apprenticeship (Fitzgerald) Act of 1937,unions and employers determine their own re-quirements and administer their own trainingprograms within the framework of basic stan-dards laid down by State Apprenticeship Coun-cils or the Bureau of Apprenticeship andTraining, U.S. Department of Labor If anapprenticeship program meets these standards,it is "registered," and persons who successfullycomplete the training receive certificates ofcompletion that entitle them to the perquisitesof skilled craft workers.

Training periods range from one to six years,depending on the degree of skill involved, withmost trades requiring from three to four \ earsof instruction. While they train on the job, ap-prentices are paid at progressive wage rates,starting at about half the journey level rate andreaching up to 95 percent of full pay near theend of the apprenticeship period. Persons whocomplete programs arc usually among the high-est paid skilled workers

Usually, apprenticeship programs accept ap-plicatio, s for only a few weeks each vear, andthe numbe: of openings is limited. Applicationto an apprenticeship program generally re-quires a high school diploma or its equivalent,a written examination, and an oral inter\ iew.Despite efforts to lower perceived barriers totraining for women and minorities, such as theTargeted Outreach Program, which was fundedunder the Comprehensive Employment andTraining Act of 1972, the proportion ofminorities and women enrolled in appren-ticeships has never 'leen high.

Technical instruction as a part of apn ren-ticeship training is given in local vocational

schools and junior colleges and, in some cass,home study courses may also be accepted. Pro-\ isions of the Smith-Hughes (1917) and George-Barden (1946) Vocational Acts, as well as theVocational Education Act of 1963, have per-mitted states with approved apprenticeshipprograms to receive partial reimbursementfrom federal funds for salaries of teachers andvocational administrators.

In 1988, there were 303,000 registered ap-prentices receiving training. More than 38,819apprentices completed required training in1988, and 100,440 were newly indentured (i.e.,formally accepted as apprentices). Slightlymore than 60 percent of the registered appren-tices in the country were in building trade oc-cupations, nearly all of them in the unionizedsector. Programs in three construction tradescarpentry, electrical, and the pipe trades-contained almost 40 percent of all registeredapprentices 27

In concept, apprenticeship is the ideal job-related training program. It mixes academicand applied learning, allowing learners to sup-port themselves while they learn. It is a way foremployed workers to upgrade their skills andoccupational standing while still on the job. Itallows for an applied evaluation of curricula bytesting or observing job performance

The principal difficulty with apprenticeshipis its limited application among the nation's oc-cupations and industries. Proponents of ap-prenticeship have suggested extending themodel through third partie-, such as profes-sional, trade, employee, and other interestedassociations.

Second Chance Training

The second chance training system is Lomposed of both public and not-for-profit institu-tions that offer federally funded, locally deliv-ered public programs to persons who are notreceiving training from either the publicschools or employers. It provides assistance fordropouts, persons who have laded or are likelyto fail the transition from school to work, theunderemployed, the working poor, and persons

19

13

who have been dislocated from their jobs w ithdim prospects for ic_.mployment Almost 40million Americans currently fall into one ormore of these categories. The second chancesystem performs a brokering function betweenits clients and employers, using small doses ofeducation, training, and job search assistanceto help the disadvantaged find work and accessto learning on the job.

The history of the second chance systemdemonstrates a steadily increasing involvementof employers. Because early experience showedthat learning outside the context of a job or areal job prospect had little positive effect on im-proving employment opportunities, legislativechanges have progressively attempted tostren r,then the relationship between the secondchance system and employers.

The current demography has created a ss in-dow of opportunity for the second chance ss s-tem. The declining quantity of entry-level em-ployees has created common cause between thesecond chance ss stem and employers. As entry-level employees become more and more scarce,more and better jobs become available to thedisadvantaged and dislocated workers who areclients of the second chance system. The emerg-ing strength of this system stems from the factthat its goals of opportunity and social justiceare increasingly consistent with the public andprivate pursuit of the nation's economiccompetitiveness.

The principal programs that make up the sec-ond chance system are funded primarily underthe Federal Job Training Partnership Act (JTPA)passed in 1982, and also under the Work Incen-tive (WIN) Program, part of the Aid to Familieswith Dependent Children (AFDC) Act. The JTPAhas now been in operation for several years andemphasizes:

public-private partnerships;performance standards;coordination of training services with other

human service agencies;state and local administrative control; andaccess to work and career development

rather than welfare.14 Most observers agree that all these program-

matte emphases should he continued andstrengthened

The Career Support System

The emerging career support system is a setof experimental policies and programs that areloosely connected by a common intention togise employees and their families more controlover their working lives. On the whole, this sys-tem represents a profound shift in the focus ofthe national dialogue on human resource devel-opment; the public interest in developinghuman capital has MON ed beyond an exclusiveconcern for the disadvantaged to a new focuson the mainstream working population.

From the demoralizing example of dislocatedworkers Americans are learning that competi-tion inteisifies economic and technical change,requiring a more flexible work force andloosening the ties between employer and em-ployee. Most Americans believe that they nowhave climirished job security and must takemore responsibility for their own career devel-opment. They also believe that in order toshoulder this new responsibility, they will needa bag of new tools, including advance notifica-tion of plant shutdowns; involvement in eco-nomic and technical changes that affect themat work; access to retraining to help them keeppace %,ith economic and technical change; andportable health care, day care, parental leaveand pensions to sustain them and their familieson and off the job.

Thus far, the emerging career support systemis more dream than reality. It consists of (1)training and other labor market services in col-lective bargaining agreements and (2) limitedpublic experimentation with training provi-sions for employed adults.

It is difficult to judge the future of the careersupport system. The services involved are ex-pensive, and the federal government has insuf-ficient resources to afford them. If costs arefoisted on private employers, they will have lessinvestment capit:-.1 available, and individualjobs will be so expensive that employers will beunable to hire as mans full-time workers as

20

they otherwise might. The public seems unwill-ing to tax itself to pay for these services. In theend, a mix of governmental, employer, and in-dividual contributions will have to be negoti-ated, and benefits of this kind will be affordableonly if they are expanded gradually.

The Training Industry

The training industry provides training tai-lored to the needs of specific employers. Largecompanies buy almost 40 percent of their for-mal training from outside providers, mid-sizedemployers buy an even larger share of theirtraining outside, and small employers go out-side for nearly all their formal training.

Higher education institutions, private, for-profit companies, professional societies, and ahost of individual consultants provide trainingfor managerial and technical elites. Training fortechnicians and craft and skill workers is avail-able from junior colleges, postsecondary tech-nical schools, and private providers. Vendorsand consultants provide most sales training. In-dustry and trade associations provide a fullrange of managerial, technical, and sales andmarketing training.

Employer-Based Training andDevelopment

Employer-based training and development,along with selection, appraisal, and rewards, isone of the human resource management sys-tems usually found in employer institutions.The principal objective of the employer-basedtraining system is to serve the strategic goals ofthe employer institution through two differentkinds of training: formal course work and infor-mal on-the-job training. Currently, employersspend about $30 billion for formal training and

anywhere from $90 billion to $180 billion for in-formal training." Informal training ; the prin-cipal means by which technical, economic,strategic, and regulatory changes are graduallyintegrated into the workplace, especiallyamong the nation's small employers. Employerseither provide their own formal training or buyit from outsiders.

Lately, there has been a growing public inter-est in employer-based training, both to avoidemployee dislocation and to encourage compe-titiveness. Dislocated employees rarely end upbetter off, even after sincere public efforts tohelp them. Many observers, therefore, have con-cluded that policies for dislocated employeesprovide too little, too late. They think trainingon the job would discourage dislocation, or atleast provide the kind of job-related learningthat would be most helpful in the event dis-location is unavoidable. Other people assertthere is a public interest in employer-basedtraining in order to improve the nation's com-petitiveness or the development prospects ofstate and local economies. Their principal in-terest is in improving the performance ofemployer institutions.

Most states now have "customized training"programs in which public institutions providetraining tailored to the needs of individualemployers. Many states are experimenting withprograms that encourage employers to do theirown training or buy training from public orprivate suppliers. In addition, federal job train-ing programs allow a small amount of availablefunds for economic development to be used tominimize dislocation and create jobs for thedisadvantaged and dislocated. More extensivepolicies that have been proposed would usepublic and vocational schools, internships, ap-prenticeships, and tax incentives to employersto increase the q' -.tinny and quality of em-ployer-based training.

21

15

Employer-Based Training and Development:

A Closer Look

Learning on the job isnothing new. Most peo-ple learn their jobs onthe job. Most get ahead

by leveraging what they learn in the current jobinto a new and better job. Moreover, for manypeople, a job is the best teacher. Relatively fewpeople excel in academic settings, but almosteveryone is able to learn on the job, either by do-ing the job, by being coached by peers or bosses,or by attending formal courses provided by theemployer. Applied learning, learning done inthe context of a task, has inherent advantagesas a pedagogy for both employers and employ-ees. Individuals can learn at their own pace onthe job and they are encouraged to use, ratherthan lose, new knowledge. Finally, individualsare motivated to learn on the job becaus: in-creased proficiency brings immediate rewards,in terms of achievement, status, and earnings.

The employer's interest in learning tailoredfor the workplace, as distinct from more gen-eral academic preparation, stems from the factthat on-the-job learning is directly supportiveof the employer's institutional culture and stra-tegic goals. Such training occurs in the contextof the employee's working team, encouragingefficiency in the work group. In addition,employer-based training occurs in the contextof the employer's strategy, prod:- is, and mar-ket niche, thereby encouraging ne .,/ efficiencies,quality improvements, and innovations.

The national interest in employer-basedtraining stems from the fact that learning sys-tems in the workplace are the first line of de-fense against economic and technical changes.The ability of the nation's employers and em-ployees to respond expeditiously to thesechanges determines, in large part, the nation'sadaptability and competitiveness.

Although employees have always learned on16 the job, the training process has changed sub-

stantially in form. The fundamental dynamichas been a consistent shift from informaltoward formal learning. As the pace of eco-nomic and technical change has acceleratedover the past halt- century, employers have triedto assure the efficiency and quality of learningby formalizing informal learning processes.Employers have managed to maintain the linkbetween learning and real jobs by applying acareful methodology that translates real-worldlearning needs into structured learning pro-grams. This methodology, called "instructionalsystems design," is an applied approach tolearning. The strength of this applied approachis that it strays as little as possible from theworkaday reality of the job and the employee.It begins with with a careful analysis of the gapbetween job requirements and the employee'sskills and ends with an evaluation of the em-ployee's performance on the job.

Employer-based training is not lacking in im-portance, size, or scope, but lacks cohesivenessand presence and is largely invisible. Thisshadow education system is delivered by nosingle institution, is the subject of no law orpolicy, and functions quietly and efficiently,growing invisibly, a silent postscript to theemployee's formal education. Even now, exec-utives, managers, supervisors, and others trainwithout the direction or assistance of trainingprofessionals. Most people involved in em-ployer-based training do not recognize that theyare part of a training system. Most trainers seethemselves as managers, engineers, marketers,chemists, or sales managers, for example. Theytend to be rewarded and recognized by theirpeers on the basis of their professional exper-tise, rather than their ability to train anddevelop employees. It is only recently that train-ing has finally taken its place as an institutionalfunction and professional discipline in the con-sciousness of institutional leaders, in businessschool curriculums, in the business press, and

22

in the thinking of business leaders, theorists,economists, and politicians

The current organization and dein er oflearning in the W. orkplace reflects its roots atthe worksite. Most learning on the job is stilllocated as closely as possible to the job itself.Even in large employer institutions, ti aining de-partments tend to supply less than half of theformal training and development the employ-ees receive There are exceptions to this rule,however Training intended to provide skillsbeyond the needs of the current job tends to becentralized at the corporate or divisional level.Developmental programs for certain occupa-tions, such as scientists, engineers, and execu-tives, and the developmental aspects of thetraining of senior managers are als'centralized.

Some kinds of training and development tirecentralized because they are new. A new prod-uct, strategy, or technology may require train-ing large groups of employees as quickly andconsistently as possible. Employers, therefore,tend to provide centrally controlled training inthe initial stages of innovations. Once innova-

tams are in place, however, training tends tobecome decentralized to fit the specific pur-poses of divisions and individual job categor-ies. Some training is organized around specificinstitutional purposes, product lines, or strat-egies. The training of sales, marketing, andcustomer service personnel, for instance, tendsto be organized around specific products orstrategic units at the division level.

Most training is, and ought to be, provided atthe worksite, where changes in learning re-quirements have their first impact. IndiN idualplants or bra..ch offices direct most superviso-ry training, skill training, and supplier training.

How do the nation's employers apportiontheir training investment? Employers spendabout $30 billion per year in direct costs for for-mal training courses that they either providethemselves or buy from outside suppliers. Thecurrent average expenditure is about 1 percentof pL:Toll, but expenditures of 2 percent of pay-roll are not uncommon. Expenditures of 3 and4 percent of payroll are more rare, but not un-common among training-intensive employers.

Table 1 shows the distribution of formal

A

MALES

92.286.0

46.6 44.4

FEMALES WHITES BLACKS HISPANICS

TABLE 1

FORMAI. TRAINING BY SEXAND RACE OF TRAINEE

4,7

Source: U S Census Bureau (1987) Survey of Partscoatson in Adult Educator,Wnehinidnn 11/ 11: flnuamrnant Drintinn Mina

Demographic Group

Share of training by percent

Share of the workforce by percent

CI

"(ABLE 2

FORMALTRAININGBY AGE

OF TRAINEE 8.84

0.54 1

0.15

Age

`38.75 Share of training

28.83

14.82

4.46

employer-based training by sex and race.Women receive a slightly disproportionatelylarge share of training relative to their share ofemployment. Whites receive a disproportion-ately large share compared with Blacks andHispanics.

Most formal employer-based training-68percentis provided to employees between theages of 25 and 44 (Table 2).

Employers provide 69 percent of their formaltraining themselves and buy 31 percent of theirformal training from outside providers." Table

2.62 3 outlines the relative importance oF the var-ious outside providers.

How extensively formal employer-based0.98 training is used varies significantly by industry

(Table 4). Industries which use formal trainingthe most are those with high concentrations ofpersonnel who can benefit the most from suchtrainingmanagers, professionals, techni-cians, and sales personnel. Regulation and cer-tification requirements typical of industriessuch as mining and health care also encourageformal training.

Source

t: S Census13t.reau (1981) Survey \_

of Particcabon in Adult Education

Washington, DC U S Government

Printing Office

18

Small Versus Large Employers

Small employers (fewer than 500 employees)account for roughly half of all jobs in the Amer-ican economy and 40 percent of new jobs beingcreated." Small employers are important train-ers because they create so many new jobs, andbecause they tend to draw their employees frompopulations and industries that need employer-based training most. As Table 5 shows, employ-ees in small businesses tend to be younger andless well educated than employees in largerbusinesses. Small businesses also tend to hiremore Hispanic employees (but fewer Black em-ployees) than larger employers. In addition, low-productivity service jobs tend to be concen-trated in small businesses (Table 6).

Small employers tend to operate in relativelysmall markets and, therefore, tend to have jobscharacterized by broad assignments or respon-,ibility. Technologies also tend to be less,,pecialized th_.,) in larger businesses. The lackof specialization makes both the employees andhe employers flexible and provides a general-

2 4

ized learning experience that aids in careertransitions. At the same time, however, smallemployers do not have enough employees to af-ford the lost time from work required for train-ing during working hours. As a result, employ-

in small businesses tend to get less formaltraining than employees in larger businesses(Table 7).

As demonstrated in Table 8, persons whowork for small employers tend to get theirtraining off the job. 0 her data from the U.S.

Small Business Administration show that infirms with fewer than 100 employees, threequarters of employees who receive training aretrained off the job, compared with 58 percentof employees in larger firms.n

The relative importance of employer-basedtraining increases dramatically with the size ofthe firm. Large employers tend to pay for moreof the training taken by their employees outsidethe workplace. Other data indicate thatemployers with fewer than 100 workers pay for23 percent of the training taken outside theworkplace. Employers with more than 100workers pay for 32 percent of the training takenoutside the workplace.

All Schools

agnentoriand s000ndari

%Os

Communitycolleges

and technicalmoos

Collegesand universitss

VocationtOschools

Otherschools 32 tt1'

Poiesgonal,

Made, andlabor (nonagons

12 520,'100,000

Itgriol9aldostri 5.6 325500

Communityplan s:

'Tutorsand private

instructors

Government

Other

Source...5 Census

Bureau0981)

Survey0 Partiopetion

in Adult EducatonWashopeton,

DC. 1 5

Govetninentfinnang

Office

:40099°6*Wj.'

2

19

TABLE 4

FORMAL EMPLOYER-BASED TRAINING BYINDUSTRY, 1984

Industry

Share of Training intensitytotal training (courses/employe)

(%)

riculture

ConstructionManufaturing

LumberFurniture

Stone, cle.y, glass products

Primary metals

Fabricated metal roducts

Other transportationInstruments, toys

Food

Tobacco

Textiles

Apparel

Paper

Printin

Rubber, plastics, leather

Transportation, communications, utilitiesTransportation

Communications

TradeWholesale

Retail

Finance, insurance, real estate

MIIMPAPPRIMC. -

Insurance, real estate

Private household services

Services (miscellaneous)

Business

Repair

Personal

Entertainment, recreational

Sk.0 . , 1

0.7

1.6 1.82.2 0.4

187 090.3 040.2 0.30.4 0.6

05 0.609 0.7

4.2 1.73.2 1.5

f.4 1.30.8 1.40.9 0.4

10 0.9

09 0.601 100.2 0.20.1 0040.3 0.60.7 0.4

1.7 1.80.2 1.30.7 0.778 1.1

24 0.7

2.6 182.8 2.085 0.4

29 0.7

5.6 0.3

94 1.5

52 1i4.2 ' 20.1 0.1

41.3 142.7 0.70.7 0.5

1.1 0.40.4

TOP 16INDUSTRIESIN TRAINligi

INTIENSITY(COURSES/EPAPLOYEE)

1 2

Source Calculated from U S Census Bureau (1987) Survey of Participation in Ad itt Education Washington, DC

U.S Government Printing Office

pl

TABLE 5

DEMOGRAPHICCHARACTERISTICSOF EMPLOYEES BYSIZE OF EMPLOYER(% OF EMPLOYEES)

Age 16-24

Less than 12 years ofeda...2tion

Hispanic

Back

Source U S Small Business

Administration (1988) "Job

Training in Small and Large

Firms," Washington, DC U S

Government Printing Office

TABLE 6

EMPLOYMENT BYSIZE OF EMPLOYER(% OF EMPLOYEES)

7IF,

1to24

500 +

Service 791 69.5 61 6 58 2

Manufacturing

Source U S Small BusinessAdministration (1988) "JobTraining in Small and Large

Firms," Washington, DC U S

Government Printing Office

TABLE 7

AVERAGE NUMBEROF HOURS SPENTIN TRAININGACTIVITIES IN THEFIRM THREEMONTHS ON THEJOB, BY SIZEOF EMPLOYER(% OF HOURS)

Formal training programs

Watching other workersdo the job

Informal trainingby management

Informal trainingby co-workers

SIZE OF EMPLOYER BY NUMBER OF EMPLOYEES

11.8 8.8 10.3 29.2 22.1

45.0 50.3 45.1 55.4 69.5

76.0 67.0 76.2 75.7 70.1

44.7 45.8 51.4 74.6 45.0

TABLE 8

SOURCES OF JOB-SPECIFIC TR 4INING BY

SIZE OF EMPLOYER(% OF EMPLOYEES)

/ L

Sousa. Bishop, J (1982).On the Job Training in Smd

Business, Washington, DC:

Small Business

Administration.

SIZE OF EMPLOYER BY NUMBER OF EMPLOYEES

1-24 25-99 100-499 500 +

Apprenticeship program 5 8 8 3 3 8 4 7

Business, commercial, orvocational school; junior

or community college 32 9 20 6 28 3 23 2

Program at a colegeor university 4 3 4 0 5 7 3 6

High school vocational

Program 9 4 6 3 6 5 5 0

Millt-ry 48 59 42 43

Previous or current empbyer 27 0 36 8 381 48.5

Other 15.7 13.1 13.4 10 7

Source U S Smat Dueness Administrahon, (1988) "Job Training in Small and Large Frms," 2 8Washngton, DC U S Goverment Pmting Office

PART IIIThe Trainees: An Occupational Perspective

he first thing that comesto mind when one looksat the scope of job-.. related education and

training in the United States is that there is notenough of it. As shown in Table 9, only 55 per-cent of Americans have preparation for theirjobs, and only 35 percent receive any upgradingonce they are on the job.

The table also shows that human capital inthe United States is unevenly distributed Pro-fessionals are the most highly trained group,followed by technicians, management supportspecialists (e.g., accounting managers and per-sonnel managers), general managers, mechan-ics and repairers, precision production work-ers, and craft workers. In these occupationalcategories, 61 percent to 94 percent of employ-ees get training to qualify for their jobs, and 26percent to 63 percent are upgraded once theyare on the job. Among clerical workers, salesemployees, and extractive workers (e.g., minersand oil workers), roughly half of employees getqualifying training and a third receive upgrad-

Executives

ing. The least educated and trained employeesare machine operators, service workers, trans-portation workers, and laborers. In these cate-gories, 18 percent to 37 percent of employeeshave qualifying training and 14 percent to 25percent receive upgrading.

Table 9 reveals other general characteristicsof job-related training in the United States:

Preparation to qualify for a job is more com-mon than upgrading once on the job.

Qualifying training more often involves for-mal education and informal learning on the jobthan formal learning on the job. For upgrading,however, the three sources of training are usu-ally of more equal importance.

Employer-based trainingformal and infor-mal combinedis a more important source ofqualifying training and upgrading than isschooling. Moreover, employers pay for a sub-stantial share of job-related education. AmongAmericans who used education to qualify fortheir jobs, about 8 percent had their coursespaid for by employers, and employers paid forthe courses of 41 percent of those who usededucation for upgrading.

Managerial Personnel

There are roughly 2.5 million executives andsenior managers in the United States. Theyrepresent the top decision makers in a workforce approaching 120 million people 32 Exec-utives ride atop the managerial ladder, makingpolicy decisions, shouldering overall profit-lossresponsibility, and setting organizational objec-tives. The major difference between their cur-rent jobs as executives and their previous jobsas managers is that now they are required tomake more decisions in general and more riskydecisions in particular. And the decisior s they

make while executives are more likely to havefar-reaching consequences.

Executives must also have more contactswith groups outside the corporation, includinggovernment agencies, other corporations, othercountries, and the general public. When the ex-ecutives and other leaders set a new corporatedirection, the executives must lead, as well asmanage.

By the time employees reach the executiveranks, they have already benefited from exten-sive human capital development. They havebeen trained for specific jobs, as they movedthrough the managerial ranks. They have alsoreceived substantial developmental training

29

23

Porcentage

With Qualifying Training

Porcontago

With Upgrading

TABLE 9

SOURCES OF QUALIFYING AND UPGRADING TRAINING:ALL EMPLOYEES

*14$4460%.4144:14,401

Emp loyorlissod Emp lowBaudTotal From school Formal Informal Total From school Formal Informal

55

11)411V:44411Y\

92\ 77

%gbi 71

iNv\1 57

43

36

V. 36

*t/ V 374b, \ 18

1i'4

\_ 94

irbI*44:644,

_66

l

_ 85

61

56

29 10 26 35 12 11

87 6 16 47 47 10

52 11 38 52 20 20

43 12 39 47 18 17

33 7 31 32 10 10

15 12 28 32 7 13

13 9 18 25 7 8

2 8 26 18 2 6

6 6 26 22 3 4

2 2 13 14 2 2

83 14 23 63 25 23

58 14 32 52 20 18

11 16 44 26 7 7

17 15 38 I, 8 13

19 18 39 44 7 22

4 48 34 6 13

Note: Individual percentages can add up to more than the totals because some employees received training from more than one kind of source,

Source' Bureau of Labor Statistics (1985) "How Workers Get Their Training," Washngton, DC U.S Government Printing Office.

14

11

ft

16

15

15

12

9

16

10

17

19

13

18

17

18

30

that prepared them for "succession" to highermanagement, for example, traditional school-ing and training, as well as job rotation andment lring.

Once they break into the rank of uppermanagement, executives continue to r2ceivetrainingan average of 36.3 hours of formaltraining per year." Participation on corporatetask forces, or-the-job coaching, and mentoringprovide executives with significant informaltraining in leadership roles as well.

About 70 percent of large U.S. companieshave some ongoing effort for educating execu-tives, even though executive education involvesonly about 0.75 percent of the total employeepopulation.34 Large, successful manufacturingfirms have the most extensive and institution-alized executive development programs, andthe banking and transportation industriesseem to invest the least in executive training. A1987 survey indicated that executive trainingabsorbs 12 percent of the total training budgetin Fortune 500 companies."

Executive training and development tends tobe centrally managed and delivered by trainingprofessionals. Most employers, especially inmanufacturing, routinely charge back all costsof executive education to the operational de-partments, but in 40 percent of companies, theoverall corporati^n pays. In 81 percent of largecorporations, e ,,utive education is adminis-tered centrally, usually one or two levels belowthe chief executive officer. The executive educa-tion staff typically consists of one or two peo-ple who collect and broker program informa-tion (usually about specialized university andconsultant programs) and counsel the execu-tives to be trained."

At least two thirds of companies that have ex-ecutive education describe it as "individualdevelopmenthe building of leaders. Typicalexecutive development programs focus on lead-ership, communication and motivation, andstrategic planning.

Historically, the most common deliverymethod for executive training has been the sem-inar, usually provided by a university. Executivetraining has been unique in its reliance onsources outside the organization. Roughly halfof all executive training involves special pro-

grams d veloped uy universities, professionalassociz, ins, and highly specialized consultantgroups, either commercial or nonprofit. Anec-dotal evidence, however, suggests a more recenttrend toward executive development programsprovided internally or bought outside but tail-ored to the individual employer's needs. Thetrend toward bringing executive developmentinside the employer institution reflects a feltneed to provide a context that is specific to eachemployer's institutional culture and strategicniche, as well as conducive to ti,c developmentof the working team.

In general, the success of executive trainingis subjectively measured, in part because exec-utive performance is rarely subject to formal-ized performance review. Where formal evalua-tion is conducted, the most common practice isfor the executive or the executive's superior toevaluate the transfer of training to daily activ-ities. In-house trainers (or consultants, who pro-vide the training in many situations) are notroutinely involved in following up on training.

Managers

There are more than 5 million managers inthe United States 37 Managers are the fifth mosthighly trained occupational group in the Amer-ican work force, after technical professionals,nontechnical professionals, technicians, andmanagement support personnel (Table 9). Thepattern of training for managers is typical ofmost Americans. As shown in Table 10, mostmanagement training is provided in order toqualify managers for their jobs. Formal educa-tion and informal training are the dominantsources of qualifying training, but for upgrad-ing, managers rely on formal employer pro-grams as much as on education and informaltraining.

Managers in financial jobs get more qualify-ing training from their employers than do othermanagers. Public managers and managers inmedicine and health care get the most retrain-ing from their employers. In general, public andprivate managers are about as likely to receiveformal and informal qualifying training, bu,more public managers than private managers

31

25

26

get formal and informal upgrading.Most working adults spend half their non-

sleeping lives being directed by managers 38Unlike an executive, a manager executes policyrather than sets it. A manage' frequently directs supervisors, generally has concrete datato work with when undertaking a task, and(among management staff) often has the mostfrequent interaction with others in the orga-nization. The manager is the "translator" whoconveys policy and motivates the work forcetoward achieving corporate goals.

Senior managers in major corporations gen-erally have a large number of people reportingto them through other managers; they have con-siderable influence with executives on policydecisions. Middle managers are responsible forfewer employees, direct workers with supervi-sory responsibilities, and influence policythrough senior managers.

Manager training, particularly for middlemanagers, is common among American em-ployers Although new managers usually beginwith a good educational basecollege degreesare the rule rather than the exceptiontheyoften have little training in motivating andmanaging people. As managers move from theirareas of technical expertise, taking on the re-sponsibilities of coordinating resources andpeople, they need a wider array of skills. Thetraditional response of American employers,therefore, has been to "make" managersthrough extensive training, including on-the-jobtraining and mentoring.

In large employer institutions, senior man-agers are respo isible for the training and devel-opment of the managers who work for them.Therefore, the delivery system for training mostmanagers is highly decentralized. Managementdevelopment programs are often developed andcontrolled centrally, however. The professionaltraining staff supports senior management byproviding advice and creating and deliveringprograms for training and developing mana-gers. Judgement of the superior(s) is the mostcommon vehicle for determining training needsof individual senior managers or selectingmore general development programs.

New managers are most often trained inemployee selection, decision making, team

building, strategic planning, and budgeting. Ex-perienced managers receive developmentaltraining in subject areas that will make themmore effective in groups, institutions, and theexternal community. Developmental trainingincludes subject matters such as interpersonalskills, negotiation, teamwork, organizationaldevelopment, and leadership. Most large com-panies promote understanding of social andpolitical issues through training seminars andconferences.

Middle managers are a prime target of for-mal corporate training activity. Training formiddle managers has been the most uniformlyapplied training effort of American companiesover the past decade. Approximately three quar-ters (73.8 percent) of all private companies pro-vide some formal training for their middlemanagers.39 In 1987, such training represented22.4 percent of the Fortune 500 human resourcedevelopment (HRD) budgetthe largest sharedevoted to any occupational groupin." Onaverage, each company that trains middlemanagers provides about 37 hours of traininga year to each of 17 middle managers.

About half of American companies train sen-ior managers. Each such company provides anaverage of 10 senior managers 34 hours of train-ing a year.'" Employers also support both job-related and non-job-related courses for man-agers through tuition assistance programs.

As a manager's responsibility and salaryincrease, mentoring, job rotation, and outsideseminars tend to replace formal in-house train-ing Training delivery for time-conscious man-agers is often through small groups and some-times deliberately held off-site to avoidtelephones and other distractions.

The in-house training staff is the most fre-quent provider in 65 percent of Fortune 500companies, supplemented by outside consul-tants, coaching, and mentoring.42 At the begin-ning and middle manager level, more compa-nies rely exclusively on in-house sources thanat the senior level. In contrast, at the seniorlevel, more companies use outside vendors andconsultants alone than at lower levels.

Smaller companies rely more on outside sup-pliers and informal methods than larger com-panies. Large companies have enough re-

32

Percentage

With Qualifying Training

Percentage

With Upgrading

TABLE 10

SOURCES OF QUALIFYING AND UPGRADING TRAINING:MANAGERS

Total From school

.0064.N__ 71 43

4'>i, N 70 47A. .e.4) --

A CY4Y

94\ 83 54

44 it\ 76 41

y ".43.43 , 74 44

\ 78 61

EmployerBasedForms) Informal Total From school

EmployerBasedFormal Informal

12 39 47 18 17 16

14 35 65 23 32 27

17 46 57 22 21 19

7 39 55 15 23 17

21 46 52 16 24 21

18 30 64 24 32 6

Note Individual percentages can add up to more than the totals because some employees received training from more thar one kind of source

Source Bureau of Labor Statistics (1985) "How Workers Get Their Trairng," Washington, X U S Government Printing Office

33

28

sources to develop customized programs andenough managers to make the costs of develop-ing and maintaining an in-house training de-partment worthwhile.

Training for managers is evaluated moreoften than training for executives, but evalua-tion is still largely subjective. Large companiesmost often evaluate developmental programsusing trainees' opinions (31 percent) and super-visors' opinions (29 percent). In the Fortune 500alone, 54 percent of companies frequently usethe superior's opinion to evaluate whether thetraining changed job performance, and 46 per-cent ask trainees.43

Quantitative evaluations are rare. If there isa return on investment (ROI) evaluation, it isusually done at the conclusion of the programor course. Six - month follow-up evaluations areinfrequent among the Fortune 500 companies.

Supervisors

The supervisory work force includes close to5 million American employees. More than halfof these are in retail sales occupations. Roughly2 million more supervise blue-collar employeesin American industry. Another 700,000 are su-pervisors in office settings. The remainder arescattered throughout the nation's industries."

As shown in Table 11, supervisory trainingfollows a pattern similar to management train-ing, but at reduced levels. In general, super-visors are slightly less likely to get employer-based training than managers. They tend tohave substantially less formal education for jobpreparation or upgrading. With the exceptionof police and fire and office supervisors, in allother categories of supervisors, less than 20percent of supervisors use j( related educa-tion to prepare for their jobs, .nd only 10 per-cent use formal education for upgrading.

In contrast to a manager, a first -line super-visor directs workers who make goods or per-form services and who, as a general rule, do notsupervise others. A supervisor implements newcorporate directions at the point of productionor service delivery and trains other workers,whether as an overt part of the job or throughsubtle behavioral cues that signal the supervi-

sor's preferred methods of operation.Almost no one moves directly into a supervi-

sory position. Even if the new employee is aca-demically well prepared for a managementrole, there is typically a period of two to threeyears on the job before the supervisory assign-ment If a supervisor is new to the company,usually he or she has been a supervisor some-where else Often, skilled technic al workers be-come supervisors, and strong technical skill isessential to maintaining the respect of produc-tion workers. However, new supervisors soonfind that technical expertise is not enough andthat a range of interpersonal and managerialskills is required to be a successful supervisor.

The content of the training for first-line su-pervisors reflects the employer's culturein-cluding the extent to which employees are to beinvolved in decision making and the methodsused to maintain a productive, informed, andsatisfied win. force. Most companies empha-size traditional management skills in trainingfirst-line supervisors. Employer-sponsoredcourses cover topics ranging from communica-tions and leadership to company policies andhow to conduct performance evaluations.

Technological changes have dramaticallyaffected the first-line supervisor's job. Compu-terized information systems now allow topmanagement to dip directly into the ranks forinformation. At the same time, new technolo-gies and a greater reliance on working teams atthe point of production and service deliveryhave made the working team more autono-mous. The supervisor has had to assume a lessaggressive role in managing work processesand a more supportive role in facilitating thework of front-line teams. In some industries,the demise of middle management's role as in-formation organizer and gatekeeper has pro-pelled first-line supervisors to assume newlinkage and information-gathering roles. Insome cases, hierarchical levels have collapsed;middle and first. line management have combin-ed into teams that work on all aspects of opera-tions with nonsupervisory personnel. This newparticip, tive management requires the first-line supervisor to spend more time dealingwith conceptual and human resource issuesthan previously.

34

Percentage

With Upgrading

Percentage

With Qualifying Training

TABLE 11

SOURCES OF QUALIFYING AND UPGRADING TRAINING:SUPERVISORS

EmployerBased

11:7418,Total From school Formal Informal Total

4 zoefle

$4, \ 68 15 22 43 5819

444,\ 58 24 26 34 78e

qt \ 56 7 14 55 34

44 4404,\ 59 25 13 37 50

%04,1 \, 70 17 13 55 25

56 16 12 39 44C4._ 44 4 \

vo,/, ,, *, \ 50 18 11 34 34

4- \\ 53 13 11 33 314 eal4, \ 41 7 7 30 25lz

N 32 9 7 27 34

From schoolEmployerBased

Formal Informal

5 38 22

39 35 33

12 20 21

16 24 16

8 6 11

12 18 19

7 13 14

9 5 19

4 12 10

3 8 28

Note' Individual percentages can add up to more than the totals because some employees received training from more than one kind of source

Source. Bureau of Labor Statistics (1985) "How Workers Get Their Training," Washington, DC U S Government Printing Office

TABLE 12

SOURCES OF QUALIFYING AND UPGRADING TRAINING:MANAGEMENT SUPPORT SPECIALISTS

ilebd't9 Eet,4 Total From school Formal al minfor! Total From school

4' A> (9\\__

77 52 11 38 52 20

%0.,

sz

4604, \ 79 49 16 43 58 23\ 74 38 11 43 60 18

Formal Informalinformal

20 17

28 21

26 23

Note Individual percentages can add up to more than the totals because some employees received training from more than one kind of source.

Source. Bureau of Labor StaLacs (1985) "How Workers Get Their Training," Washington, DC U S Government Printing Office

-1

3J

In 1987, about 59 percent of all the large pri-vate companies offered some formal trainingfor first-line supervisors, and those that didprovided an average of 33 hours per supersson" Fortune 500 companies allocated about22 percent of their HRD budgets to supervisortraining in 1987.46

In-house training departments are the majoragents of supervisor training. For example, 81percent of Fortune 500 companies respondingto a survey indicated that the in-house depart-ment is "always or frequently" used for super-visor training, and this training is the "primarycharge" of the HRD department in 11 percentof these companies. Exclusive use of the in-house source is more common for supervisors(25 percent of companies with formal training)than for other levels of management personnel(17 percent and 10 percent for middle and sen-

for management, respectively). Most companies(64 percent) use both inside and outside pro-\ iders. Only 11 percent use vendors alone.'"

On-the-job coaching is almost universallyavailable, and in companies that do not provideformal training for first-line supervisors, coach-ing may be the sole source of training. Overall,coaching is generally considered to be the mostcommon delivery method, with the immediatesuperior as provider.

The supervisor's superior usually evaluateswhether the skills targeted in training actuallytransfer to the workplace. Self-evaluationoccurs in 40 percent of Fortune 500 companies,a slightly smaller percentage than for the mid-dle and executive management levels. Evalua-tion by in-house trair rs is almost as commonas self-evaluation.

Management Support Specialists

part from technical pro-fessionals, nontechnicalprofessionals, and tech-nicians, management

support specialists are the most highly trainedemployees in American employer institutions.There are more than 3 million employees whoprovide management support in staff functionssuch as accounting, underwriting, personnel,

labor relations, and training." The training pat-tern for these workers tends to parallel thetraining pattern for managers (Table 12). Quali-fying training for support professionals tendsto emphasize schooling and informal OJT. Ingeneral, there is less upgrading than initialtraining, even though there is more formal em-ployer-based training for upgrading than forjob preparation.

Nontechnical Professionals

here are close to 9million nontechnicalprofessionals in theUnited States, including

roughly 5 million teachers, librarians, andcounselors and more than 3.5 million other pm-fessional specialists, such as lawyers, artists,designers, writers, and photographers.49 Indi-

30 viduals in these occupations get more qualify-

ing training than any other occupational groupexcept teciinical professionals. They are uniquein terms of the large amount of qualifying train-ing and upgrading they receive from schools. Infact, no occupational group relies more onschooling for preparing for their jobs and up-grading after they are on the job than teachers.Lawyers and teachers are the most highly edu-cated and trained nontechnical professionals.Photographers and artists get substantially less

36

education and training (Table 13).Nontechnical professionals are generally de-

fined as degreed workers who have attainedspecialized = xpertise in a given area other thanthe physical or natural sciences or mathe-matics and who have their careers focused inthat area They are usually workers who aresalaried but exempt from receiving overtimepay when their workweek extends beyond 40hours, according to tile U.S. Fair Labor Stan-dards Act.

Nontechnical professionals can be foundthroughout modern companies, working asmembers of the management staff and in spe-cialized support divisionsas patent and taxattorneys; writers and editors; personnel, laborrelations, and training specialists; and librar-ians who perform information searches Lindmaintain specialized corporate

Nontechnical professionals generally havegreat deal of autonomy in their jobs and are ex-pected to work with a minimum of direct super-vision. They make decisions related to theirown areas of expertise and create their ownmethods for achieving major goals, often inconcert with technical professionals. They arealso expected to be motivated and able to setand meet objectives that contribute to achiev-ing the larger corporate goal.

Professionals often have considerable lati-tude in working hoursand frequently chooselonger hours than required, perhaps because ofa strong work ethic, intellectual interest, orbelief in the significance of a particular projectto their profession.

Significant projects, special benefits, train-ing, contact with respected peers, access to ex-pensive facilities, and individual freedom areincentives for a nontechnical professional tocontinue in a job. Ex:ssive management re-quirements, lack of recognition, and limited op-portunities for learning are among the most fre-quent causes for departure. Thus, quality ofworklife and potential for growth, as well as in-creased income are important criteria in em-ployment decisions. Therefore, many corpora-tions encourage professional growth throughparticipation in professional societies, uni-versity teaching, or consulting. Corporationsalso create learning opportunities and other

optionsincluding high-salaried but non-managerial lobsto retain professionals

The main reasons that corporations invest intraining for professionals are:

to maintain expertise (update professionalknowledge);

to meet needs arising from new projects,to orient professionals to corporate goals and

culture;to provide an incentiNe for hiring and reten-

tion; andto help employees manage stress and improxe

their health.There is little information available on the

training courses provided specifically for pro-fessionals, probably because much of this train-ing is technical (and is measured in that arena)or comes from th, -eneral corporate trainingcurriculum available to all managerial, techni-cal, sales, and professional employees (timemanagement, stress management, writing, etc.).However, professionals and corporate trainingexecutives interviewed for this study cited thefollowing topics as frequent focuses of training:

specialty skills (professionals frequentlychoose updating in their fields when trainingis elective);

computer literacy;time management and project scheduling;report writing and English (writing is a

primary function of most professionals);speaking and presentation skills;interpersonal skills, such as negotiation

techniques;health and stress management;orientation to the company's goals and

strategies;opportunities for career and professional

development; andtopics related to social concerns, such as the

company's equal employment opportunit\policy and employee safety programs

According to the 1987 Lakewood survey, 48percent of large corporations have training fortheir professionals, who receive an annual aver-age of 36 hours of training per person. Of com-panies providing professional training, 64 per-cent use a combination of in-house and outsidesources, 27 percent use outside vendors only,and 10 peiLent use in-house providers only."

3 7

31

to.

32

According to interviews conducted for this most often subjective and ROI is rarelystuds, evaluation of prolessiona: training is calculated.

Clerical Personnel

There are more than 20million clerical person-nel who provide admin-istrative support in the

United States. More than 5 million process fi-nancial records, and more than 4 million aresecretaries. The remainder are clerks or dis-patchers or have other information manage-ment functions." As shown in Table 9, a littlemore than half of clerical personnel have quali-fying training and less than a third get upgrad-ing. These workers fall in the middle range ofAmerican employees in terms of the proportionwho have qualifying training and upgrading.

There is mounting evidence that a growingshare of clerical employees are undertrained.Information-based technology is increasing theimportance of and skill requirements for cler-ical employees. The clerical worker of todayusually operates a computerover 82 percentof companies with more than 10,000 employeesuse computers for word processing." The aver-age clerical worker has learned computer op-eration or a new word processing programwithin the past five years and now uses a per-sonal computer for preparing letters, keepingrecords, and scheduling office events. Clericalpersonnel may also be responsible for trainingnew clerical workers or even the professionalstaff on new office equipment.

Some clerical employees, such as executivesecretaries, have the responsibilities of powerand confidentiality. Such workers usually needtop-flight clerical skills, good social skills, su-pervisory skills to manage other administrativesupport personnel, good appearance, and theability to stay calm under pressure.

Clerical time saves management time. Inmany instances, clerical employees have as-sumed tasks previously done by managers andother specialists. And with computer power,

clerical workers can do more in less time. Theyhave time for more editing, processing, draft-ing, and accounting-type functions, and canassume more administrative tasks, meaningthat professionals and supervisors can delegatemore of their duties to clerical personnel. This"skill migration" from managers, profession-als, and other specialists is fueling debates oncompensation and may push wage scales up.

Clerical positions are unique in their consis-tency from organization to organization; theircore duties tend to be similar across all indus-tries. These jobs are also unique in that theytend to have a limited career track that flows toexecutive assistant and stops. To move up sig-nificantly in salary, the clerical worker has toacquire a different job title and shift tracks toadministrative or supervisory positions like of-fice manager or purchasing director. Alterna-t vely, he or she can change companies, leverag-ing skills into more pay.

Turnover is high in prosperous regions,where the suppl/ of qualified clerical workerstends to be small and companies compete forgood clerical personnel. In recent years, theopening of other career paths to women has af-fected the availability of good clerical person-nel. Largely a female-dominated field (99 per-cent of clerical workers are women)," clericalwork, with its limited career path, has sufferedthe loss of many people who would have seenit as a viable career option in the past.

In general, the investment in formal em-ployer-provided training for clerical workers islow because they usually enter the work forcewith most of the basic skills (typing, shorthand,filing procedures) that enable them to do theirjob. High school vocational programs, commu-nity colleges, and trade and business schoolsusually provide this preparation. Increasingly,however, shortages in qualified clerical personnel are driving employers to create their own

as

Percentage

With Qualifying Training

Percentage

With Upgrading

TABLE 13

SOURCES OF QUALIFYING AND UPGRADING TRAINING:40 NONTECHNICAL PROFESSIONALS

N. IN.

VP4>..4,4 \

4404*

.%\*. N

4*\

le

lo/ % \IV\e,

Total From schoolEmployerBased

Formal Informal Total From schoolEmployerBased

Formal informal

92 87 6 16 47 47 10 11

95 96 6 12 70 57 9 9

78 68 2 26 53 30 9 9

95 92 3 17 55 15 9 10

84 61 7 53 32 14 6 13

81 41 13 42 48 19 6 20

83 67 5 33 32 20 1 7

Note Individual percentages can add up to more than the totals because some employees received training from more than one kind of source

Source Bureau of Labor Statistics (1985) "How Workers Get Their Training," Washington, DC: U S Government Printing Office

TABLE 14

SOURCES OF QUALIFYING AND UPGRADING TRAINING:9''i, SALES PERSONNELA, 64..\ rgnployerBased EmployerBased

ek$ Total From school Amal Informal Total From school

'9.4" 411:).4\ 43 15 12 28 32 7

, 040

Ock:0,)4\75 34 33 35 58 17

i12.41.0\ 55 24 12 38 40 9\,, 27 5 5 20 20 3

Formal informal

13 15

27 19

21 17

5 13

Note Individual percentages can add up to more than the totals because some employees received training from more than one kind of source

Source Bureau of Labor Statistics (1985) "How Workers Get Their Training," Washington, DC U S Government Printing Office

A

3.9

clerical i..orkers rather than buy them, and fre-quently, clerical workers with strong basicLierical skills need upskilling, particularlywhen computers are introduced into the off iceor a new word processor or information man-agement software is brought on line. In fact, asemployers have aggressively invested in wordprocessing and other computerized office tech-nology, they have increasingly found that cler-ical workers are the key to its efficient use.Thus, clerical training courses include orienta-tion to the employer's chosen software for wordprocessing, mailing lists, information manage-ment, and other functions. Other clerical train-ing courses include telephone communica-tions, spelling, time management, businesswriting, language and interpersonal skills, andcareer development.

According to interviews conducted for thisstudy, employers rarely or never conduct needsassessments for clerical training. Faced with atraining challenge whenever new machinery isintroduced into the office, many companieselect to send their clerical workers to outsidecourses, often provided by the equipment ven-dors. However, training needs are often moreextensive than those addressed in the Vendors'overviews, and manuals designed to facilitatethe integration of machinery are often complex.Consequently, more in-depth outside training,usually in the form of seminars, is needed. Fre-quently, however, even this opportunity is of-fered selectivelyonly one member of the cler-ical staff may go for training and, on returning,train fellow workers.

Fifty-three percent of all companies have for-mal secretarial-clerical training The averagecompany provided 26 clerical workers with 16 9hours of formal training each in 1987.54 Also in1987, Fortune 500 companies spent roughly 6percent of their training budgets on clericaltraining.5

Interviews conducted for this study revealthat only about 10 percent of clerical trainingis formal. The in-house seminar is the mostcommon format for formal training, but 35 per-cent of all companies now use some computerbased training, mainly to teach computer-related skills such as word processing andspreadsheeting.56

Interviews also reveal that the usual practiceis to use both in-house and outside providers forclerical training (44.5 percent of companies).Sole use of the in-house training staff is morecommon than sole use of outside vendors (36.5percent vs. 18.9 percent, respectively). Trainingpurchased from vendors is often noncustom-ized, but 50 percent of companies that have cler-ical training use customized vendor training forclerical personnel." The prime responsibilityfor clerical training is usually at the corporatelevel, with major responsibility co-located atthe plant, department, office, or store.

Evaluation of clerical training in technicalskills is frequently experiential. The workergoes to training and then is expected to applythe skills on the job. Manpower, Inc. (a primetrainer of clerical personnel placed as tern po-rary workers in offices) tests workers exten-sively, maintaining "the only true method oftesting lies in assessing an operator's ability toapply skills and knowledge to a realistic worksample."58 To test for office automation skills,Manpower requires the trainee to create a docu-ment from handwritten draft through proof-reading and final printed copy.

Training in the "softer" side of clerical work(interpersonal skills, time management, etc.) isinfrequently evaluated. When it is, evaluationis generally subjective, ga ging the partici-pant's reaction to the traip.ng.

4 0

Sales Personnel

here are almost 13 mil-lion marketing and sales

110employees in the UnitedStates. Most are concen-

trated in retail sales. More than 2 million of thenation's sales workers are cashiers, another 4million are retail sales workers, and anothermillion are stock clerks. The remainder sellcommodities, business services, real estate,securities, and insurance." Sales workers re'less on education than on employers for thetraining necessary to qualify for their jobs andto upgrade their skills once they are working(Table 14). The extent of training varies sub-stantially among sales representatives. Thosewho sell insurance, real estate, securities,business services, and commodities have sub-stantially more job-related education andemployer-based training than those who sellretail products and personal services.

The success of current business strategiesand the development of innovations frequentlyhinge on the skills of the sales force. "Customerservice" strategies are impossible unless thesales force is well trained in this arena. Innova-tion strategies depend heavily on the ability ofsales employees to recognize customers' needsfor new applications of existing products. Salespersonnel also need to be carefully integratedinto the culture and structure of the companyif they are to communicate new applicationsand of 'r innovations up the line. Sales person-nel are in a unique position to feed such infor-mation back to product development depart-ments, along with information on what thecompetition is offering. If the sales operationis in tune with the rest of the organization, itcan be the company's "investigative" division.

Sales managers tend to agree that employerscan develop successful salespersons with care-ful selection and training. According to a recentsurvey, the typical sales training managerthinks that the superstar's success stems 48percent from attitude, 25 percent from selling

skills, 1 3 percent ',om product knowledge, I Ipercent from exp Tience (the previous salesrecord), and 4 pc 'cent from work ( rfort andgood assignments.6° Attitude, selling skills, andproduct knowledge can be learned throughtraining on the job. Careful selection is also im-portant. The skills and knowledge that a sales-person brings to the job should generally fit theindustry, company, product, or group of cus-tomers. For example, a salesperson who sellstechnical products or services requires a tech-nical background; a person selling financialservices requires a financial background.

Sales training focuses on new product orien-tation, product updates, attitudes and interper-sonal sales skills, negotiation, and procedures(paperwork). Common courses include generalselling skills, presentation skills, businesswriting, telephone skills, customer service, ac-count management, planning, time manage-ment, goal setting, problem solving, stressmanagement, and technicp1 training specific toa product or industry.6'

Data from two recent surveys indicate thatproduct knowledge and selling skills are two ofthe most common focuses of corporate salestraining.62 But at least one study has shown thatinvestment in selling skills can have a huge pay-off; improving sales technique alone providedreturns as much as 1,660 percent."

Sales training accounts for roughly 16 per-cent of the training budget it Fortune 500 com-panies.64 Virtually all cor anies train newhires, and more than hail of large companieshave formal policy statements outlining thenumber of sales training hours required, thecourses to be taken, and the deadlines for com-pletion. A company usually provides at least 48to 80 hours o: initial sales training, with somecompanies requiring 160 hours or moi,... Estab-lished salespersons receive about 43 hours oftraining per year." About 16 percent of em-ployer-based professional development forsalespeople is through formal training, about75 percent is through coaching by the saltmanage r.66

41

35

Percentage

With Upgrading

Percentage

With Qualifying Training

TABLE 15

SOURCES OF QUALIFYING AND UPGRADING TRAINING:SERVICE EMPLOYEES

\

Total From schoolEmployerBased

Formal Informal Total From schoolEmployerBand

Formal Informal

36 13 9 18 25 7 8 12

56 18 29 24 55 20 28 21

62 29 15 27 42 9 11 22

14 3 2 10 24 9 12 20

52 34 12 12 29 9 8 6

24 2 3 20 15 2 2 11

Note. Individual percentages can add up to more than the totals because some employees received training from more than one kind cf source

Source Bureau of Labor Statistics (1985). "How Workers Get Their Training," Washington, DC US Government Printing Office.

TABLE 16

PERCENTAGE OF WOMEN, BLACKS, AND HISPANICSIN TECHNICAL OCCUPATIONS, 1986

Occupational Group Women Blacks Hispanics

All workers 44.4 9.9 6.6

Technical workers 24.3 6.4 4.8

Source: "Labor Fc. ce Projections: 1986-2000" (1986). Monthly Labor Review, Vol. 110, No 9

42

Training provided by in-house sources is themost productive type of training, according tosales training managers and vice presidents re-sponding to a 1987 survey.67 But such trainingdoes not necessarily involve the in-house train-ing department. A wide variety of people andorganizations, ranging from the in-house train-ing department to sales managers to outsideconsultants, universities and colleges, providesales training. In fact, in most Fortune 500 com-panies, sales training is usually provided bysomeone other than the in-house trainingdepartment.

Sales training managers, vice presidents ofsales, and, to a somewhat lesser extent, chief ex-ecutive officers are responsible for tying thegoals for professional development of the salesforce to the corporate goals. Objective traininggoals (e.g., trainee increases number of callsmade by 5 percent within the next six months)are used by 84 to 90 percent of companies.Training managers or sales managers usuallyassist designated trainers in setting traininggoals, with salespersons involved in only 28 per-cent of companies."

Lectures are still the most common deliverymethod for sales training, and less than 50 per-cent of training programs for salespeople are"canned" (standardized), meaning that thesame program is delivered regardless of com-pany, industry, product, or kind of customer.69

Canned programs tend to cove generic salesskills, whereas more tailorec.: trainn pro-grams focus on product knowledge and othercompany-specific subject matters.

Videotaped presentation is popular becauseof its flexibility. It enables training to be con-ducted immediately after hiring, introducesnew products without bringing all salespersonsto one location, and demonstrates productsconsistently to everyone. Custom video is ex-pensive but cost-effective compared with usinguntrained salespersons in the field.

Videotaping the salesperson in action is alsouseful for showing how he or she comes acrossto customers; videotaped role play is increas-ingly becoming a standard tactic .n sales train-ing." (Computer-based and interactive videotraining are not yet used extensively, probablybecause of high development costs.)

The most common means of evaluating salestraining courses is to solicit the trainee's opin-ions; the "smile test." Sales training is morecarefully evaluated than management training,in part because the sales process is more eas-ily quantified. Tests for learning retention areadministered less than 35 percent of the time,and less than 25 percent of companies use cost-benefit analysis; about 50 percent of companiesuse customer evaluation as an indicator of asalesperson's performance and thus an indirectindicator of training's effectiveness.7'

Customer Service Personnel

As the nation's service sec-tor grows, so grows theimportance of high-qual-ity customer service.

Many kinds of workers share the challenge ofproviding high-quality customer service, butnone are more directly involved than the directcustomer service Nve-Aers. They are the link be-tween the company, the product, and the con-sumer. Advertising may make promises, butcustomer service workers must deliver.

Although business willingly acknowledgesthe important role of the customer sen iceworker, compensation has not kept pace Nk it hpraise. Many workers are in low-pay categories,have minimal (if any) benefits, or work only parttime. Entry-level positions and minimum wagesare common.

The "baby bust" of the 1960s and 1970s mayaffect custom 'r sere ice jobs more than otherjobs. It was the CA 'mographic forces of the 1970sthat spawned so many service enterpriseswhose profitability depended on minimizing

43

37

AUL

38

wages, training costs, and capital investments.This trend could be reversed in the 1930s and1990s. The worker shortage has already becomeP. major problem in the fast-food industry " Ofthe 3.5 million people who work in this indus-try, 70 percent are age 20 or less. Usually, thisjob is their first job, and it serves as a transit; n

between home and school." In retail, the em-ployees are mainly part-timers and the problemis turnover. According to Alice McCord of theNational Retailers Association, "The industryfaces a young, poor-quality applicant".74

Customer service training, therefore, will be-come increasingly important. One survey notedit as second in importance only to managementtraining in projections for 1988 and beyond."Interviews conducted for this study reveal thatcustomer service training usually involvescourses in interpersonal skills and customerrelations. Because so many customer serviceworkers are first-time employees, they needbasic orientat_ a to workplace customs. Also,much of their training comes under the generalrubric of sales training. Customer service train-ing courses cover topics such as product andservice orientation, problem solving, negotia-tion, selling, customer-interaction skills, stress

management, basic clerical skills, and compu-ter keyboarding.

Despite its growing importance, there are fewavailable data on customer service training perse. The 39.6 percent of employers that traintheir customer service personnel provide about26.3 hours of training annually per persontrained. Overall, 5.86 million customer serviceworkers were trained in 1987, for a total of 157million hours of training."

Only 13.3 percent of companies that provideformal training rely on outside sources alone;42.7 percent use a combination of in-house staffand outside r foviders and 44 percent provideformal training using in-house staff only."Prime responsibility for training customer ser-vice workers rests at the divisional, group, orsubsidiary level.

C )mpanies conduct very little evaluation ofcustomer service training. However, in manycases, supervisors observe the interactions ofemployees with customers and make subjectiveevaluations of the training's effectiveness. Insome cases, such as telephone sales, phone callsto customers may be monitored and used by su-pervisors as an ex aluation tool.

Service Employees

here are 18 million ser-vice employees ia theUnited States-7 rnillior.

IN in food prepay -ion, 3million in building services, anti roughly 2million eat h in health, personal, household,and police and fire services." Overall, service

employees are among the least educated andtrained American workers, because of the lowrates of education and training among food ser-vice workers and cleaning personnel. Healthservice employees, police and fire employees,and people in personal service occupations,such as barbers and child care workers, getmuch more training (Table 15)

4 4

Technical Workers

echnical workers usetheoretical principlesfrom the mathematical

NE or natural sciences intheir work. They also, tend to uti'ize substantialamounts of technical machinery or processesin their work and work in industries that pro-duce technical machinery or other products de-rived from the application of mathematical orscientific theory. Technical workers are espe-cially important to American competitivenessbecause they tend to work in industries thatproduce the lion's share of internationallytraded products and services. Technical work-ers are also important because they invent andp-oduce the technologies that result in the up-skilling of all workers. Ultimately, the contin-uous integration of new technologies with morehighly skilled labor is the engine of Americancompetitiveness.

Attempts at defining technical training andthe technical work force are always somewhatarbitrary. The definition used herethat tech-nical employees use theoretical principles frommathematics or the natural sciences in theirworkis no exception In general, this defini-tion includes technical professionals (e.g., sci-entists, doctors and engineers); techniciansand technologists, concentrated in both manu-facturing and health care; craft workers, con-centrated in the construction trades; andskilled workers concentrated in manufactur-ing. By this definition there were 20.3 milliontechnical workers in the United States in 1986,amounting to 18.2 percent of the Americanwork force."

Table 9 shows that of all occupational groups,technical professionals, who number almost 4.8million (24 percent of the technical work force),get the most education and training in prepar-ing for their jobs and the most upgrading. Thenation's 3.5 million technicians, who make up18 percent of the technical work force, get moreeducation and training in preparation for theirjobs and more upgrading once they are on the

job than any occupational group except techni-cal and nontechnical professionals. There arealmost 11.8 million blue-collar technical work-ers (58 percent of the technical work force), in-cluding precision production workers, mechan-ics and repairers, extractive workers, and craftworkers." Blue-collar technical workers getonly slightly more preemployment educationand training and upgrading than the averageAmerican worker. Moreover, they rely muchmore on informal learning on the job than othertechnical workers.

The nation's almost 7 million machine oper-ators and assembly workers are not included inthe figures just given even though their jobs areincreasingly technical in content. As discussedearlier, automated manufacturing is increasingthe depth and range of skills required in thesejobs; many are being consolidated and up-graded into technical jobs. Although they aredifficult to count, it is clear that many operatorsand assembly workers have already becometechnical workers, including as many as 2 mil-lion who work :n high-tech industries.

As shown in Table 9, operators and assem-blers get relatively little preparation for workor training once they are on the job.

Although the workers in some technical oc-cupations, especially in health care, are pre-dominantly women, men dominate the techni-cal work force, totaling 76 percent of all tech-nical workers. As shown in Table 16, women,Blacks, and Hispanics are generally under-represented in the technical work force.

Technical workers are distributed unevenlythroughout the economy. About 1.5 million areself employed, principally as doctors, engi-neers, carpenters, mechanics, and repair work-ers. The largest number of technical workers isfound in the service sector, mostly in healthcal - Manufacturing employs about 14 percentof all tc-hnical workers.

The count: uction industry has the highestconcentration of technical workers; one thirdof all workers in the construction industry aretechnical employees. Mining, transportation,

45

39

Percentage

With Qualifying Training

Percentage

With Upgrlding

TABLE 17

MEDIAN WEEKLY EARNINGS BY SEX, 1986(DOLLARS)

Occupational Group Both sexes Men Women

All workers 358 419 290

Technical workers 482 501 420

Source "Labor Force Projections 1986-2000" (1986) Monthly Labor Re,,ew, Vol 110, No 9

TABLE 18

Ratio

69

84

9''f SOURCES OF QUALIFYING AND UPGRADING TRAINING:i, TECHNICAL PROFESSIONALS4t /4o

EmployerBased Employerlased

901, Total From school Formal Informal Total From school Formal Informal

40

94 83 14 23 63 25 23 17

94 91 13 31 41 10 7 23

90 73 14 33 57 23 28 18

96 96 10 7 72 33 8 8

90 66 26 41 65 21 36 24

97 91 9 26 59 30 25 15

Note Individual percentages can add up to more than the totals because some employees received training from more than one kind of source

Source Bureau of Labor Statistics (1985) "How Workers Get Their Training," Washington, DC U S Government Pr.nting Ofnce

46

and utilities have the next highest concentra-tion, with nearly one fifth of their employees intechnical occupations. In manufacturing, ser-vices, and government, about one IA °ricer in sixis a Leln!ical , ,t-ker.

Technical workers earn well above the aver-age for all workers (Table 17). Male technicalworkers earn more than their female col-leagues, but the disparity is less in technical oc-cupations than in the economy as a whole. Intechnical occupations, female workers earn 84percent of what male workers earn; in the econ-omy as a whole, female workers earn 69 percentof what male workers earn.

Technical Professionals

Technical professionals are educated andtrained to make broad judgments, to invent, andto apply a particular intellectual discipline toproblem solving. In health care, technical pro-fessionals include employees responsible formaking diagnoses and prescribing treatment tobe provided by others. In other industries, tech-nical professionals are responsible for develop-ing new products and designs, enhancing exist-ing products, and conducting research, but notnecessarily responsible for formal manage-ment or exercising direct authority over subor-dinates. Technical professionals are most crit-ical in the overall design and developmentphase of the competitive cycle and the diagnos-tic, phase in the provision of health cai.services.

Technical professionals include the nation's2.5 million health professionals, 1.5 millionengineers, and 800,000 natural, mathematical,biological, and computer scientists.

Technical professionals' jobs most frequentlyrequire at least a four -year college degree andof+cn require formal schooling beyond the un-dergraduate level. As shown in Table 9, tech-nical professionals are the most highly edu-cated and trained of the nation's employees.Relative to other employees, they tend to receivesubstantial amounts of both education andemployer-provided trainingformal and infor-malboth to qualify for their jobs and toupgrade skills once they are on the job.

All technical professionals rely hem ily onschools to prepare them for their jobs Hoe er,relative to other technical professionals, engi-neers and mathematical and computer scien-tists rely lesson schools and more on employersfor qualifying training (Table 181. This suggeststhat engineering, mathematical, and computerJobs are more tailored to a particular employerand the employer's product, resulting in lesscarryover of academic training into theworkplace

Health professionals get the most upgradingof all technical professionals and rely onschools more than their employers for bothqualifying and upgrading training, suggestingthat skill needs are not employer specific andthat health care professionals have a strongerbond with their profession than with specificemployers.

Technical professionals usually receive train-ing in subject matter that applies broadly to aspecific area of expertise. Because of thebreadth of potential application, organizationshave, in the past, played a relatively passive main training their technical professionals, mostoften providing only general guidance andfunding. However, in recent years, the pressuresof competitiveness have encouraged companiesto integrate the development and design of in-novations with production and marketing. Theattempt ,o build more integrated R&D struc-tures has encouraged more institutional con-trol over the training and development of tech-nical professionals.

Technical professionals, however, are still rel-atively autonomous in their professional devel-opment. Although most of their training is in-tended to update skills or knowledge in the faceof new technology, the exact application ofthe.,e skills and knowledge is usually left to theindividual. For example, a seminar might intro-duce a new synthetic material and explain itsdevelopment, properties, and uses. The designengineer who will use the material in new prod-ucts will use the information much differenththan the engineer who will test the products,once developed.

Th. technical professional's ability to gleandiNerse applications from generic materialmakes seminars and symposia. such as those

47

ii

41

pti

42

offered by colleges and universities, profes-sional organizations, and other public provid-ers, a good alternative to in-house training cur-ricula. In 1987, companies in all seLtot s spentapproximately $117 million to send their tech-nical professionals to seminars. Colleges anduniversities are the most frequent source of out-side seminars, drawing $41.1 million per yearin revenues to train technical professionalsfrom private industry.

Vendors are another major source of trainingfor technical professionals. Vendors suppliedapproximately $175 million worth of off-the-shelf training materials, custom materials, andother training support services to technicalprofessionals in 1987. Other sources of training(both in-house and outside) for technical profes-sionals account for an additional $1.4 billionper year.

A growing number of manufacturing compa-nies are presenting training in integrated man-ufacturing to their technical professionals. In-tegrated manufacturing covers all phases ofmanufacturing from concept development,through design and development, to producingthe finished project. The root principle of li.eintegrated manufacturing perspective is tobrL elite technical professionals togetherwit,_ production workers, sales and marketingpersonnel, and other members of the institu-tional team. The ultimate purpose is to reducethe cycle time required to integrate new tech-nologies and to get innovations to market, to im-prove efficiencies and quality, and to encouragenew applications. In addition, with such train-ing, technical professionals can be responsiblefor more than one job or process, rather thana single function or process, as had previouslybeen the case. This technique parallels the tech-nique of cross-training, which is becoming in-creasingly common among technicians andcraft workers and resulting in a more knowl-edgeable and more versatile work force that ismore responsive to organizational, technolog-ical, or industrial shifts.

Technicians

Thew ale approximately 3.5 million techni-cians in the United Statesmore than 1.5 mil-lion health technicians, almost 1.3 million tech-nicians in engineering and the sciences, andanother 800,000 broadcast, computer, and airtraffic technicians. Next to professionals, tech-nicians are the most highly educated and welltrained employees in the American work force(Table 9).

A technician is an employee who e.:e p -Imaryexpertise lies in a particular specialty area.Although technicians have considerable depthof knowledge and highly developed skills intheir specific areas of expertise, they lack thebreadth of knowledge in the theoretical aspectsof their specialties that is required of technicalprofessionals. And although many techniciansare graduates of f ar-year colleges, many havedeveloped their skills and knowledge at techni-cal or vocational schools or community col-leges, or, on occasion, through on-the-jobtraining.

Many workers in the health care field, includ-ing nurses, physical therapists, x-ray techni-cians, and other operators of diagnostic equip-ment, are good examples of service sectortechnicians. Technicians from manufacturinginclude circuit board assemblers and qualitycontrol technicians who oversee laser equip-ment in automobile assembly plants.

Technicians usually receive training that ap-plies directly to their jobs. The training has itsbasis in theory, but is focused more directly onthe application of theory to the job than is train-ing for technical professionals.

Because technician training has a mixedfocus of theory and application, a mix of in-structional methods is necessary to ensure ade-quate skill acquisition and transfer. Most tech-nician training includes three phases ofinstruct ion:1. Introduction of the theories or principles

behind the technology;2. Demonstration of the application of the

theories, principles, and processes in a jobenvironment; and

4S

3. Hands-on practice 9f the skills and knowl-edge application in a simulated worksetting.Like training for technical professionals,

technician training includes generic courses.Unlike much training for technical profession-als, however, most technician training is se-quential and job specific and includes princi-ples of new technologies (primarily equipmentand processing techniques) and new applica-t; jns for existing technologies. Technicians alsotake special courses required for licensing orcertification, or "refresher" courses requiredfor license renewal or recertification. Virtuallyall technician trainir,g is directed toward up-grading or updating skills.

Because of the hands-on nature of the techni-cian's work, courses in safety and hazards arerequired. Technicians also receive specifictraining in procedures required for successfuljob operation, especially if the procedures aremandated by a government agency. For exam-ple, technicians in a drug company receivetraining in clean room operation and mainte-nance; laboratory technicians in a hospital re-ceive training in maintaining sterile equipmentand recording patients' test results properly;and technicians in a nuclear power facility re-ceive training in emergency shutdown and evac-uation procedures.

Of the more than $3.28 billion spent by em-ployers each year for outside training and train-ing support services, approximately $103.2million is for technician training.

Because of the nature of technician training,programs sponsored by colleges (including two-year colleges), universities and professionalassociations are a frequent source of trainingoutside the organization itself. Of the $68.9million provided technicians each year to at-tend outside seminars and conferen,:.!s, uni-versity-sponsored programs account tor $24.1million. Vendors, especially "original equip-ment manufacturers" (OEM), also supply a con-siderable amount of technician training andrelated support materials."

The amount of time technicians spend intraining varies widely according to the job held,the company's support for training, and stateand local certification (or licensing) require-

ments. There are few data available concerningthe length of training specifically fortechnicians.

Blue-Collar Technical Employees

The nation's blue-collar workers numberalmost 30 million craft workers and operationspersonnel: construction workers, repair per-sons, precision production workers, extractiveworkers, machine operators, assembly workers,transportation workers, and laborers." Accord-ing to the definition used here, only the preci-sion production, craft, extractive workers,mechanics, repairers, some of the machine op-erators, and some assembly workers aretechnical workers. The remainder of the blue-collar work force is the labor pool from whichnew technical workers evolve.

With the exception of extractive workers andmachine operators, roughly two thirds of blue-collar technical workers get some kind of for-mal or informal preparation for their jobs,substantially less than the proportion of work-ers who get qualifying training in the white-collar and technical elite populations (Table 9).Blue-collar technical workers tend to rely on in-formal training on the job more than other oc-cupations for the qualifying training and up-grading they do get.

Equipment manufacturers are a vital sourceof training when the training goal is skill up-date. The rationale behind OEM training is thatthe manufacturer has a better understandingof equipment, processes, and procedures thanany other source and is, therefore, most quali-fied to conduct training. Many companies thatuse OEM training purchase it as a part of theacquisition cost of new equipment. Unfortu-nately, no funding figures are currently avail-able for OEM training.

When recertification or relicensing is thetraining goal, corporate training strategy oftenspecifies two tracks: high-tech and low-tech.Craft and operations workers in high-tech jobsare likely to attend training sponsored by localcolleges, vocational-technical schools, and pro-fessional groups. (This is especially true forjobs requiring a specific number of hours of

49

43

\1P-Imillill.ImIIIIIM

Percentage

With Qualifying Training

Percentage

With Upgrading

TABLE 19

SOURCES OF QUALIFYING AND UPGRADING TRAINING:DATA PROCESSING PERSONNEL

EmployerBasedTotal From school Formal Informal Total From school

94 70 27 45 64 16

91 64 19 41 61 25

74 34 15 43 45 13

71 31 14 41 27 5

Employer3asedFormal Informal

37 25

27 24

17 26

8 14

Note: Individual percentages can add up to more than the totals because some employees received training from more than one kind of source.

Source: Bureau of Labor Staaftics (1985). "How Workers Get Their Training," Washington, DC: U.S Government Printing Office.

50

I

training or continuing education units for re-certification or certification at a higher level ofproficiency.) Employees in low-tech operationsjobs are more likely to receive their recertifica-tion training through in-house programs, whichare provided locally to minimize time lost fromthe job and to allow for tailoring to fit localneeds.

A number of different sources can providecross-training and retraining, depending on thespecific kind of training needed. Training by the

equipment manufacturer is appropriate if op-eration, maintenance, or repair of new or com-plex equipment is involved. Local colleges orvocational-technical schools are good providerswhen training must cover basic principles andwill involve laboratories, or when the companywould incur a great expense for equipment thatwould be used only in training. Much cross-training also takes place, formally or infor-mally, on the job.

Data Processing Personnel

The growing importanceof data processing hascreated a distinctive pop-ulation for training. Al-

though individual categories of workers mightseem to more rightly belong in other occupa-tional categories, the industry which they serve(data processing) ma'-es it more appropriate totreat them as a separate cohesive occupationalgroup.

There are more than 1.5 million data process-ing personnel in the United States, including in-formation managers. This encompasses morethan 300,000 computer systems analysts (com-puter scientists are also in this category),almost 500,000 programmers, more than300,000 operators, and roughly 400,000 dataentry clerks; the rest are information mana-gers." Systems analysts (including computerscientists) are technical professionals and infor-mation managers are in the category of mana-gers. Programmers fall somewhere betweenprofessionals and technicians, depending ontheir responsibilities. Operators and data entryclerks use the computer as a job aid and neithercreate nor manipulate technology. Since theydo not use theory in their work, they cannot beconsidered technical workers according to thedefinition used in this discussion and wouldprobably normally fall into the category ofclerical personnel.

Data processing personnel are among the

most highly educated and trained occupationalgroups in the American work force. As Table 19shows, both systems analysts and programmersreceive about as much education and trainingto qualify for their jobs as any of the major oc-cupational categories, and operators and dataentry personnel get more qualifying trainingthan all but a few of the occupational categor-ies. The proportion of systems analysts and pro-grammers who get upgrading compares withthe figure for technical professionals, the mostintensively upgraded group; computer opera-tors get about as much upgrading training asgeneral managers. Data entry personnel, how-ever, get much less upgrading than qualifyingtraining.

Systems analysts get st-'3stantial schooling,usually in colleges or universities, to preparefor their jobs, but rely on fornrgi and informalemployer-based training for upgrading. For themost part, programmers use a combination ofschooling from colleges and junior colleges,employer-based formal training, and informalOJT both to qualify for their jobs and to up-grade their skills on the job. Operators use asimilar mix of schooling and training on thejob.

With the exception of data entry clerks, dataprocessing personnel get more formal and in-formal employer-provided upgrading than anyof the major occupational groupings.

Data processing personnel are a product ofthe information age. They build information 45

ho

46

systems and programs. They operate compu-ters, compile and structure data, and input datainto computers Their primary productinfor-mationmay be sold to external sources ormay be used internall; as the raw material ofinstitutional efficiency.

The structure of data processing operationsin an employer institution is similar to thestructure of most technical functions. The sys-tems analysts and computer scientists performresearch, development, and design functionsoutside the line structure of the institution. In-formation managers are in charge of daily op-erations and the work of programmers and op-erators. In many cases, a substantial number ofoperators and data entry clerks are in depart-ments outside of computer departments,creating a highly decentralized network ofcustomers for the data processing operation.

With the downsizing of computer hardwarethrough the miniaturization of circuitry andthe spread of user-friendly technology, dataprocessing operations are ever more dispersed.As a result, data processing personnel are serv-ing multiple roles in R&D centers and line de-partments, and as service and training pro-viders for the rest of the institution. In order tocope with dispersion, some employers have es-tablished a new staff department, the informa-tion center, which is an intermediary betweendatabase managers and end users. The centeris charged with providing training, applica-tions, and support to the computerized depart-ments throughout a given company. Even withuser friendly programs, communicating withthe computer means learning a foreign lan-guage. Information centers perform a coordina-tion and training function, helping end usersproduce spreadsheets and graphs and inte-grating applications and hardware betweendepartments.

Advances in information-based technologyhave been the major source of changing skill re-quirements in most American jobs. Data pro-cessing occupations continue to be hardest hitby the whirlwind of changing skill require-ments that emanate from the ever new informa-tion technologies. This fact explains why dataprocessing employees receive so much qualify-ing training and upgrading. It also explains why

so much of their training is employer provided.The technology is simply moving too fast towait for schools to catch up.

Ironically, computer programs sometimes re-place their creators. Jobs that originate withnew technology are eventually simplified. Forexample, general-solution business applica-tions like VISICALC and LOTUS 1-2-3 are reduc-ing the demand for computer programmers.Moreover, it is no longer necessary for pro-grammers to understand hardware architec-ture or design separate data structures for eachapplicationtwo skills that distinguish a pro-gram analyst from a programmer.

Interviews conducted for this study indicatethat, with the exception of data entry clerks,data processing personnel generally have col-lege degrees or have attended structured pro-grams at technical schools and receivedcertification. Frequently, courses includemanaging information systems, computerdesign and analysis, auditing (of both systemsand procedures, including security measures),and programming in specific computer lan-guages, such as BASIC, FORTRAN, and COBOL.

Armed with basic education or certification,the aspiring data processing worker usuallyenters the work force as a development special-ist or a beginning programmer. Hands-on ex-perience and OJT are then the keys to profes-sional development.

Expertise in a particular kind of informationsystem is gained through experience and is es-sential to career mobility. Data processing per-sonnel often market themselves to employerson the basis of knowledge of a particular sys-tem and its programming requirements. Fromthe employer's perspective, information mana-gers who already know the essential elementsof the employer's computtr system can adjustrapidly to their new jobs. Hiring experiencedpeople is simply the most cost-effective ap-proach to hiring what is usually high-pricedtechnical talent.

Information systems are highly tailored tothe specific structures and products of em-ployer institutions, encouraging formalizedtraining for new data processing personnel toensure speed, consistency, and quality of learn-ing. The most common delivery method for for-

5 2

mal training is the seminar. Information man-agers spend an estimated 100 hours or more peryear in formal computer-related training.

The rapidly changing technology of the com-puter field drives data processing personnel tokeep their knowledge current by reading tradejournals, attending conferences, interactingwith vendors, and networking with colleaguesthrough professional societies. User groups ofdata processing personnel who use the sametechnology are a regular tool for problem solv-

ing and training. Information managers whomanage other computer professionals, as wellas computer systems, reported in interviewsconducted for this study that although a collegedegree may be essential for movement intomanagement in this field, support and mentor-ing from supervisors are often the most impor-tant ingredients for success on the job. This ac-counts for the relatively high level of informalOJT among data pi ocessing personnel.

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PART IVConclusions and Recommendationshe data discussed in thisreport, the full body ofour research not dis-1 cussed here, and our

prior experience with employer-based traininglead to three principal conclusions concern-ing job-related education and training in theUnited States:1. It is critically important to individual oppor-

tunity and the competitiveness of the nation'semployers.

2. There is not enough of it.

3. It is unevenly distributed among theAmerican population.

Our research in this document andelsewhere has given us a rough sense of whatmight be done to improve the American job-related education and training system. We of-fer some preliminary recommendations here,a full year prior to final publication of ourreports. We offer these recommendations,even though the nation's institutions are hardpressed for resources and cannot affordmuch of what we recommend because webelieve resources should not govern ourconclusions.

Employers

The principal challenge inimproving the nation'sjob-related learning sys-tem is for Americanemployers.

1. Employers currently spend about $30 billion,1.4 percent of the national payroll, on formaltraining and development. Currently, 1 in 10American employees gets some formal train-ing from his or her employer. Many of the na-tion's large companies spend 2 percent ofpayroll on training and development, and em-ployers with the most substantial commit-ments to training and development spend 4percent.

How much employer-based training isenough? We don't know. But our researchsuggests to us that these current com-mitments are probably insufficient. In pre-vious studies the American Society for Train-ing and Development had recommended acommitment of up to 2 percent of payroll, buteven the 2 percent target is not sufficient. Thefollowing are more appropriate goals.

an interim target of 2 percent of payroll48 nationwidean increase from the current

(

$30 billion to $44 biilion. The $14 billion in-crease would be sufficient to increase cov-erage from the current 10 percent of employ-ees to almost 15 percent of employees; and

an ultimate goal of 4 percent of payrollnationwide an increase from the current$30 billion to $88 billion. This $58 billion in-crease would be sufficient to increase cov-erage from the current 10 percent of employ-ees to almost 30 percent of employees.

2. In addition to increasing resource com-mitments, employers will need to integratetheir human rc.,ource development struc-tures into institutional culture and structureto:

accelerate and cushion the impact ofchange;

encourage learning that drives efficien-cies, quality improvements, new applica-tions, and innovations;

reduce the time it takes ..o get innovationsto market;

encourage flexibility rather than resis-tance to change; and

provide products and services tailored tocustomers' needs, as well as good customerservice.

3 . Moreover, employers will need to push the

5 4

human resource development activity asdose as possible to the point of productionand service delivery, and to the interface be-tw _en the institution and its suppliers andcustomers. Technical changes affect produc-tion and service delivery employees most. Asa result, they have much to learn. They alsohave much to teach. Their hands-on exper-ience with the product and custoT ter contactmake them prime experts and the front-linelistening post for new efficiencies, qualityimprovements, new applications, and inno-vations. The people who use a product orservice, tit,- customers, know most about itsstrengths and weaknesses and should belistened to carefully.

4 Employers should work to improve the inte-gration of human resource development intothe institution by taking these steps:

the chief executive officer must maketraining a priority;

the training and development executivemust be a full member of the senior manage-ment team;

line managers throughuu, the institutionmust be responsible for training and devel-oping their subordinates; and

training must be available to all employ-ees, not just white-collar and technical elites.

5 Accountability between schools and employ-ers is a two-way street. The schools cannotdeliver unless the nation's employers be-come full partners in American educationby:

communicating new knowledge andchanging skill requirements as they ac-cumulate in the workplace;

embedding schooling in the careerdevelopment process by giving more weightto educational attainment .J1,- achievementin hiring decisions; and

working with educators to develop andprovide "learning and earning" curriculumsthat combine academic and applied learn-ing experiences.

6 . The state of the art in employer-based learn-1,1g far exceeds the state of practice. Employ-ers need to:

create an institutional environment thatencc :rages the prof ctive use of humanreso, .ite development as a tool to encourageefficiencies, quality improvements, new ap-plications, and innovations;

use selection and appraisal proceduresthat assess job-related training needs;

use reward systems that provide compen-sation based on skill;

build training-related performance-basedrequirements into management and super-visory job descriptions and work objectives;

treat training as an investment with thesame payoff as R&D; and

work together, sharing development anddelivery costs of training mpterials,technolog:es, and basic research on appliedlearning among adults.

Educators

inployers depend on ed-ucators to provide job-ready and training-readyentry-level employees.

Employers also turn to educators for most ofthe training they buy from outsid, sources.1. Educators need to change some of thei

basic strategies. They need to:work with employers to strengthen the

link between learning in school and learningon the job;

hire better prepared teachers, pay themwhat they are NA, orth, and measure learningoutcomes;

link the teaching of academic subjects toreal-world applications; and

teach future employees how to make deci-sions, how to solve problems, how to learn,how to think a job through from start tofinish, and how to work with people to getthe job done.High school graduates who do not go on topo:tsecondary education will require spe-

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cial attention. The United States is compe-titive in the educational preparation ofwhite-collar and technical elites, but lessgood at providing basic education and occu-pational training to non-college-boundyouth The 43 percent of American high

school students wh,.. are tracked into thewatered down "general curriculum" and the19 percent who are in vocational coursesneed a new curriculum that mixes solid aca-demic basics and applied learning, prefer-ably in work settings.

Government

iven current demo-graphic and economic

IhMtrends, the educationand training needs of the

traditional public clientele--the disadvantagedand dislocatedare urgent. Further, main-stream employees and employers are also nowappropriate tat-gets of public education andtraining policy. The United States must expandits original public policy goals in education andtraining beyond the established concern for so-cial justice for the disadvantaged and di lo-cated to a broader concern for the employmeatsecurity of the mass of American employeesand for the competitiveness of the nation'semployers.

1 The disadvantaged have he first claim onpublic attention and public resources. Thenation is already past due on its commit-ment to provide equal opportunity for par-ticipation in the American culture, polity,and economy. The litmus test of this com-mitment to opportunity is willingness tocommit public resources to make everyAmerican capable of getting and holding ajob. A job is the price of admission to this in-dividualistic culture and participatory polit-ical system. Persons unable to get work dis-appear from the community, drop out of thepolitical system, and tall into the under-ground economy.

Providing human capital development forthe disadvantaged would do more thanhonor American commitments to equal op-portunity. It would also pay off in dollarsand cents. Investments that endow the disad-vantaged with the necessary skills to make

50 them economically independent will reduce

the costs of public dependency. In addition,with the decline in the nunioer of entry-levelworkers, the nat,..n now needs all of itsyoung pe-ple on the job to remain econom-ically competitive.

Preparing the disadvantaged for jobs witha future will requite a mix of family support,basic education, and job training. Programsshould be predicated on the principles thatthe best social welfare agency is a family, thebest educator is experience, and the besttrainer is a job. With these principles inmind, we recommend the following featuresfor programs targeted to tht sadvantaged:

responsibility for programs for the disad-vantaged should reside with the state andlocal governments;

employers should be assigned a substan-tial role in the planning and oversight ofthese programs;

programs should emphasize human cap-ital development through work and learningrather than income maintenance;

performance standards should be a keyoperational component; and

programs should emphasize the coordina-tion of human services at the state and locallevels.

2 Experienced employees who become unem-ployed after several years on the job alsohave an important claim on federal tosources. The same destructive processes areat work for the dislocated as for the disad-vantaged. The disadvantaged tend to startout and end up at the bottom of the eco-nomic heap. The dislocated experience aneconomic loss that rarely results in persis-tent poverty but probably involves an equalamount of sufferi Dislocated employees

5G 6

are hurt not so much by where they land asby how far they fall.

Dislocation is here to stay. The harsh real-ity is that a fair trading system and new tech-nology will inevitably benefit all Americansin the long term, but some will be hurt in theimmediate future. In the end, practical ne-cessity and compassion suggest the need forpolicies to address the immediate problemsof job dislocation.

Policies for the dislocated need not be ex-pensive. Fewer than 1 million experiencedAmerican employees are dislocated eachyear. The current proposal for expanding the$30 billion unemployment insurance systembeyond its current emphasis on incomemaintenance is worthy of consideration.There are three important principles incrafting programs for the dislocated:

the government should ratchet up the safe-ty net for dislocated employees and shouldhelp them avoid a free fall from middle-classstatus to official poverty;

prior notification of layoff is needed andcounseling, job search assistance, and out-placement should be encouraged while em-ployees are still on the job; and

the government should provide dis' Icatedemployees counseling and job search .ssis-tance, and then give them training. TI iningoutside the context of a job or job commit-ment is usually folly. Training does notcreate jchs. Jobs create the need for training.

3 A policy to improve access to trainingfor adult Americans should include sixcomponents:

loans that individual:, could cash in asthey choose with employers or other educa-tion and training providers;

incentives for employers to provide moretraining, preferably investment Licentivesdelivered through the tax code;

state and local experimentation with poli-cies to ercou rage employer-based training;

publicly funded R&D and the dissemina-tion of best practices in employer-basedtraining;

a "third party" strategy that would use in-stitutions outside government and industry,such as unions ar d professional, occupa-

tional, and trade associations, to deN clopstandards, training - -I internship/appren-ticeship experiences iii particular occupa-tions; and

grants to employers and the full range ofpublic and private training suppliers for"capacit, building" for delivering more ef-fective job-related training.

4. The vast majority of Americans who areneither disadvantaged nor dislocated are be-coming new claimants for public resources.The pace of technical and economic changehas increased entry-level skill requirementsand the need for skill upgrading after em-ployees are on the job. The pace of changehas also reduced the commitment betweenemployer and employee, forcing employeesto take responsibility for their own employ-ment security and career development. Ifemp:oyees are going to take responsibilityfor their owr areers and th security oftheir families, they are going to need somenew tools, such as access to retraining, por-table pensions and portable health care cov-erage, day care, and parental leave. Govern-ment will hay ; to help employees andemployers pay for these new services.

America's 120 million job seekers and em-ployees who are not disadvantaged or dislo-cated need job-specific training to get theirjobs and upgrading to keep their jobs andget better ones. Most Americans learn whatthey need to know to get a job and keep iteither in school or on the job. According tothe Bureau of Labor Statistics, 54 millionAmericans, 55 percent of the work force, saythey needed some kind of job-related learn-ing t-., get their job."

Growing concern with the nation's eco-nomic competitiveness has resulted in a newpublic interest in the quantity and quality ofthe nation's employer-based training be-cause of its economic importance. Between1929 and 1982, tioining on the job accountedfor more than half the growth in the nation'sproductive capacity The ocher principalcontributors to improved economic perfor-mance were education and machine capital,which contributed 26 t.nd 20 percent,respectively.

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Policies to encourage more and better em-ployer-based training are conspicuously ab-sent in the nation's investment portfolio Inaddition, the absence of learning infrastruc-ture on the job is the missing link in the part-nership between schools and employers. Tothe extent learning is embedded in the econ-omy, the economic importance and the lev-erage of preemployment education andtraining will increase. To the extent learningbecomes more connected to job perfor-mance and economic rewards, students andtrainees will be more interested in their owndevelopment.

Moreover, to the extent employers relymore on training as a strategic tool, partner-

52

ships between employers and the educationand training community outside the work-place will be strengthened Employers willbe more interested in well-prepared entry-level employees who are ready to be trained.Employers who upgrade their employeesmore would find more use for external edu-cational and training institutions. Largeemployers already buy 30 percent of theirupgrading, more than $10 billion worth,from outside suppliers. Smaller employersbuy almost all their training outside. Theideal device for expanding employer-basedtraining would be some form of investmentit mtive for new training.

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FOOTNOTES

1 'Allard, L A , and Tan. H W (1986) Private Sector Training Who Gets It and What Ore Its Al fects)(Repoit to the L S Depai t-ment of 1...abot ) Santa Monica, CA Rand2 Ibid3 Ibid4 Ibid5 Bishop, J 11982) On the Job Training in Small Business Washington, DC Small Business Administration6 'Allard and Tan, op c it7 Ibid8 Ibid9 Denison, E F (1985) Trends in 4mencan Economic Growth, 1929-1982 Washington, DC Brookings Institution10 Simon, J (1981) The Ultimate Resource Princeton, NJ Princeton University Press, Kuznets, S (1966) Ec 101711C Grov.thand Nations New Hawn, CT Yale Universitx Press, Fabricant, S (1954) Post-War American Economic- Growth Boston Na-tional Bureau of Fennomic Research11 Denison, op cit12 Carnevale, A P (January, 1986) "The Learning Enterprise," Training & Development Journal, Vol 40, No 1, Carnexale, A P,and Goldstein, H (1985). Employee Training Its Changing Role and An Analysts of New Data Alexandria, VA ASTD Press13 Flynn, P (1988) Facilitating Technological Change Cambridge, MA Ballinger Publishing Company14 Ibid15 Johnston, J (unpublished) Enhancing Competitiveness Through Job-Related Learning16 Wt, J R (June, 1987) American Youth A Statistical Snapshot Washington, DC The William T Grant Foundation Com-rdission on Work, Family, and Citizenship17 the National Commissi-m on Excellence in Education (1983) A Nation at Risk Washington, DC US Department ofEducation18. Carey, M L (1985) How War kers Get Their Training Washington, DC US Department of Labor, Bureau of Labor Statistics19 Welch, F (October, 1979). "Effects of Cohort Size on Earnings The Baby Boom Babies' Financial Bust," Journal of PoliticalEconomy, -reeman, R (February, 1977) "The Decline in Economic Rewards to College Education," Review of Economicsand Statistics20 Digest of Educational Statistics, (1987) Washington, DC US Department of Education21 Carey, op cot22 Fraser, BS (1980) The Structure of Adult Learning, Education, and Training Opportunity in the United States Washington,DC. National Institute for Work and Learning23 Parnell, D (1985) The Neglected Majority Washington, DC Community College Press24 Godfrey, E P, and Holmstrom, E I (19701 Stud of Communal Colleges arid Vocational- Technical Centers, Phase IWashington, DC Bureau of Social Science Research25 $17 6 billion Includes trainee salaries, US Department of Defense (1988) Military Manpower Training Report FY 1989Washington, DC US Department of Defense26 Carey, op cit27 Apprenticeship Past and Present, (1987) Washington, DC U S Department of Labor, Employment and Training Administra-tion, Bureau of Apprenticeship and Training Also see "Apprenticeship," (Winter, 1983) Occupational Outlook Quarterll28 Carnevale, op cit29 Goldstein H , and Carnexale, A P (1985) Calculated from Survey of Participation in Adult Education Washington, DC USCensus30 Hamilton, J, and Medoff, J (April 24, 1988) "Small Business Monkey Business," Washington Past31 US. Small Business Administration (forthcoming, Fall, 1988) Job Tram:rig in Small arid Large Firms tVashington, DCUS Government Printing Office32 "Labor Force Projections. 1986-2000," (1987) Morithlr Labor Review', Vol 110, No 933 Lee, C (October, 1987) "Where the Training Dollars Go," Training, Vol 24, No 1034 Erecutive Education in Corporate America A Report on Practices and Trends in Eight Major Industries, (19861 PalatineIL Executrsi Knowledgeworks, Anthony J Fresina and Associates35 Stephen, E , Mills, G E , Paw RW, and Ralphs, L (January, 1988) "HRD in the Fortune 500" 7.atiztric:& Development Journal,Vol, 42, No I36 Executive Education in Corporate At-wiz(a. op cit37 "Labor Force Projections 1986-2000," op (At38 Kotter, J P (1982) The General Manager Ness York Free Ness39 Lee, op cit40 Stephen, et al , op ell41 Lee, op cit42. Stephen, et al , op cit43 Ibid44 "Labor Force Projections 1986-2000," op cit45. Lee, op cit46 Stephen, et a! , op c tit47 Lee, op (At48 "Labor Force Projections 1986-2000," op tit49 Ibid50 Lee, op cit

5953

51 "Labor Force Protections 1986 2000,' op cit52 Lee, op cit53 ''Ti ial Expected Soon in Male Sec letal 's Bias Suit "(Apnl 25, 1988) B \ A's f ',grime(' Relations Week/ \54 Lee, op cit55 Stephen, et al , up cit56 Lee, op en57 Ibid58 Cited in Hamburg, S K (1985) "M,,npo\\ er Tempura! Sen ices Keeping Ahead of the Competition," Training for NewTechnology Part III Cost-Effective Design and Delivers of Training Programs Ness York Work in America Institute59 "Labor Force Projections 1986-2000," op en60 Sales Training in America, (1988) Palatine, IL Esecutise \\ ledge \\ orks, Anthom J Fresina and Associates61 Ibid62 Ibid Honeycutt, E D, Jr, Harass, C E , Jr, Cast lehem, S E (Ma\ , 1987) "Sales Training A Statu, Report," Training &'' Det clop-incur Journal, Vol 41, No 563 Cited in Sales Training in America, op ut64 Stephen, et al , op Lit65 Lee, op Lit66 Cited in Sales Tratrurig iii 4meru a, op en67 Ibid68 Ibid69 Ibid70 Ibid71 Ibid72 Zemskv, R , and Meyerson, M (1985) Training Prat rues Education and Training It 'thin the American him PhiladelphiaUnicersitx of Penns\ hania, Hight)! Education Finance Reseaich Institute73 "Fast Food Jobs The Earls Career Training Ground," [Book Res itn ] (Ma, 1986) Training & Development Journal, Vol40, No 574 Kimmerling, G F (Juts, 1986) "The Youth MP rket A Valuable Resource," Trair,ing & Dei elopment Journal, Vol 40, No 775 "Training to Target Managers," (March, 1°,8) Bulleurt on Training, Vol 13, No 376 Lee, op cit77 Ibid78 "Labor Force Pio)ections 1986-2000," op cit79 Ibid80 Ibid81 West, E (unpublished) The Emploser Ilap Organization of Technical Miming82 "Labor Force Protections 1986-2000," op cit83 Ibid84 Cares, op Lit

6 0

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61

AMERICAN SOCIETY FORTRAINING AND DEVELOPMENT

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