Major new study: Smaller firms outspend big business sector on per employee training

    TORONTO, May 28 /CNW/ - The most comprehensive and rigorous study ever
undertaken on workplace training in Canada's smaller businesses, has revealed
this sector invests more than its big business counterparts on total training
costs per employee. The study was undertaken by the Canadian Federation of
Independent Business (CFIB) and conducted nationally among its members.
    What's unique about CFIB's report, says Dan Kelly, CFIB's senior
vice-president of legislative affairs, is that it didn't just focus on formal
(professionally delivered) training - as most research does - it looked at
informal training or on-the-job training which is the predominant mode in
smaller firms.
    Among its most revealing findings, the study found that a small business
owner spends an average of $2,700 annually per employee on all forms of
training, and for new ones with no experience the cost rises to $5,400. Kelly
said that while informal training represents nearly three-quarters of the
average training expense, small- and medium-sized enterprises (SMEs) have also
dramatically increased their use of formal training. He explained this adds up
to a nation-wide annual investment of $18 billion on employee training in
small and medium-sized enterprises (SMEs).
    Kelly further pointed out that due to the challenge of measuring
informal, on-the-job training, governments and other institutions have, for
too long, not supported or even recognized the massive contribution smaller
firms make in training this country's workforce. Despite the soft economy,
Kelly noted that Canada's demographics dictate that the shortage of skills and
labour will continue to be a growing problem in the years ahead. CFIB's
recommendations therefore focus on ways government can assist, such as with
training incentives.
    CFIB's vice-president of national affairs, Corinne Pohlmann, said that
rather than examining an expansion to Employment Insurance (EI) benefits which
can hurt a firm's ability to find staff, government should consider helping
SMEs by making it easier to hire and train new employees. "As the report
reveals that the smallest firms hire those with no experience at twice the
rate of larger businesses, an EI hiring or training incentive would be welcome
news to Canada's entrepreneurs," Pohlmann added.
    The study also revealed that SMEs often do not get to reap the benefits
of their training investments for long as, in the smallest of firms, 20 per
cent of employees leave the business in an average year. This separation rate
is double that of larger businesses. "Once they've got some training and
experience under their belts, workers at SMEs are often poached by more
sizeable employers," Kelly said. He added that forced to cope with this
revolving door of under-skilled labour, small business owners are left to
start the hiring and training cycle once again.
    To view the full report, Canada's Training Ground: SME's $18 Billion
Investment in the Nation's Workforce, go to

For further information:

For further information: To arrange an interview with Dan Kelly or
Corinne Pohlmann, contact Adam Miller or Meghan Carrington at (416) 222-8022.

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