In addition to reviewing the economic environment facing small businesses, the latest edition of The Small Business Economy, produced by the Office of Advocacy, presents new research on training for small business employees and owners (see Chapter 5).
Small businesses play an important role in training the country’s workforce. As well as being primary job generators, small businesses are major trainers of U.S. employees.
About two-thirds of workers get their first job in small firms; thus small firms train much of the workforce. The training offered in small firms tends to be more general, informal, and flexible than that provided by large firms.
Training is a particularly important topic at this time. The recession, high unemployment rate, and decline in self-employment have important implications for how small businesses train and retrain the workforce and whether entrepreneurs can start businesses and create jobs. Small business workers as well as owners need training to improve, maintain, and update skills especially when technology changes rapidly. The recently enacted stimulus package includes $4.5 billion in additional monies for job training.
Census data from the 2004 Survey of Income and Program Participation (the latest available) provide updated findings about formal training. They indicate that:
- Small firm employees are much less likely than those in large firms to receive formal training. (The chapter defines “small” as having fewer than 100 employees.)
- Formal, employer-provided training has declined since the mid- 1990s.
- Women employees are more likely than men to receive training.
- In small firms, workers with union status are more likely than non-union workers to receive training; in large firms the opposite is true.
- Most formal employee training takes place on the job, but workers in small firms are more likely to receive off-site training than large firm workers.
- Small firm workers are more likely than large firm workers to pay for off-site training or to have family members foot the cost.
- Almost 15 percent of all business owners received training during the previous year to improve their skills.
For more information, refer to Chapter 5 of The Small Business Economy at www.sba.gov/advo/research/sb_econ2008.pdf.
by Jules Lichtenstein, Senior Economist, SBA Office of Advocacy
