Training up, but challenges remain for small firms

CFIB study whos 56 per cent of small firms have increased investment in staff training
By Uyen Vu
|Canadian HR Reporter|Last Updated: 06/23/2003

D

espite the strain on resources and time, small- and medium-sized businesses have been steadily increasing training, according to a survey.

The survey, conducted by the Canadian Federation of Independent Business, found that 56 per cent of about 6,700 small entreprises have increased their investment in staff training during the last three years.

And although more than one-third (34 per cent) surveyed reported no change in their training dollars, almost half (48 per cent) said they intended to boost training levels in the next three years. About one in eight small- and medium-sized entreprises (SMEs) offered no training at all.

Forty-three per cent of firms offered informal training. An equal proportion offered a mix of informal and formal training. The survey defines informal training as on-the-job training, tutoring and mentoring, while formal training would include classroom courses, seminars and workshops.

When respondents were asked to identify the most effective types of training, tutoring with another staff member ranked the highest at 64 per cent, while one-to-one tutoring with a trainer came in at 53 per cent. Workshops and seminars were considered effective by 42 per cent of the respondents, and 26 per cent preferred classroom courses. (Multiple answers put the total above 100 per cent.)

The study noted that SMEs in Quebec were twice as likely as firms in other provinces not to provide training. Quebec is the only province that imposes an obligation on companies to provide training: businesses have to either invest one per cent of payroll in employee training or otherwise contribute that amount to a training fund.

Catherine Swift, president of the CFIB, said the Quebec finding is not surprising. “In bureaucratic circles, the tendency has often been to undervalue the importance of informal training, and when it has been recognized, the paper burden associated with documenting the informal training provided has been so massive that small firms in Quebec have preferred paying the tax.”

Swift said the federation has heard feedback from members saying that “this measure has been problematic for them. One of the main reasons we oppose training taxes is they tend to represent a transfer of income from the small businesses to the large businesses, which are more likely to have a training department. The small firms pay the tax and will not have the time to do the paperwork to get the tax refund.”

But Lucie Morin, professor of HR at the school of management at the University of Quebec at Montreal, questioned the study’s finding on training in Quebec. Quebec’s one-per-cent obligation applies only to businesses with more than $250,000 in payroll, she said, adding that the survey isn’t clear on how many businesses with a smaller payroll are represented among the respondents.

Further, Quebec falls under the national average in the number of hours spent on both informal and formal training (Quebec businesses allocate 104 and 22.4 hours per year respectively; the national average is 113.1 and 23.4 hours). But so do six other provinces, Morin noted. The average, she suggested, has been pulled up by the level of training in a few provinces, Alberta especially (130.8 hours of informal training hours and 30.4 formal.)

“The report makes training in Quebec look worse than it actually is,” said Morin, formerly a training manager at a large manufacturing company.

She agreed with the respondents in looking to tax cuts and tax credits as an incentive to boost training (53 per cent of the respondents chose lower payroll and other taxes such as Employment Insurance, and 49 per cent chose tax credits). But she added, “it’s one thing to have a tax credit, but what’s more important is to invest wisely in training.”

The challenge for small businesses, she added, is a lack of knowledge in what training is appropriate. Large companies may have the expertise and the time to really analyze business processes and, from there, determine what training is needed, she said. Without that kind of analysis, “businesses can make mistakes by sending staff for training when all that’s required, for example, is a poster on the wall or a sticker on a machine to spell out what the process is.”

For more than 31 years, Bob Blanchard owned a Canadian Tire store in St. Jean sur Richelieu, Que. He has always believed in life-long learning, and made sure his employees had access to customer-service training and, when computers started appearing in the business world, computer training. The support provided by the Canadian Tire corporation helped him identify the training appropriate to his business needs.

But he stressed that the marketplace for training products is extremely bewildering for most small-business owners, particularly those starting out.

“As far as I’m concerned, there are people out there offering training services but who aren’t really qualified as trainers. And a small business owner doesn’t have the time to sit down and really look for training that is truly valuable.”

At TRAC Records Inc, an Edmonton-based records- and document-management firm, vice-president Pat Beelby said it’s difficult to find the time to send any of the eight employees for training. Still, the company does make use of community college IT courses. It’s also exploring e-learning opportunities to spare itself the cost of travelling and of not having staff available for a few days.

“One of the difficulties is we don’t have the kind of cash flow that a large company has. So if we have someone doing technical work go and get some technical training, there’s always a chance that they would leave for a bigger company after we’ve made the investment.”

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