Washington, D.C. (April 17, 2019) – Over two-thirds of small business employers found it more difficult recruiting and hiring candidates for the most-skilled position in the last two years than in the prior two years and consequently invest significant time and resources in training and improving the skills of their employees. According to a new NFIB Employee Training Survey, released today, the biggest challenges employers face in their training programs are employees leaving after they’ve been trained, employees not interested in learning new skills, and the significant time commitment required by the owner, the employee being trained, and other employees involved with the training process.
Small businesses hire expecting employees to have a prior work history, a basic level of formal education, and a strong primary skills set. Work experience is far more valuable to most small employers than a formal education beyond a high school degree. Thirty-two percent of small employers have no formal educational requirement for their most-skilled position and 40 percent require a high school diploma or GED. However, while most small employers do not require a formal education beyond high school, 43 percent require some type of credential and skills certification for the most-skilled jobs.
“With the country’s low unemployment rate at or below five percent, small employers face a tight labor market when recruiting and maintaining employees,” said NFIB’s Chief Economist Bill Dunkelberg. “Employee training is important to the operations of small employer firms and is often ongoing as current employees develop skills to keep up with industry operation trends or advancing to more skilled positions within the firm.”
The biggest challenges employers face are retaining employees after investing resources to train them, encouraging them to learn new skills, and the time commitment required by the owner, the employee being trained, and other employees involved with the training process.
About one-third of small employers (32%) find turnover a major employee training problem for the most-skilled position and 30 percent report it as a major problem for the most common, less skilled position. About 28 percent of small employers report employees showing little interest in learning anything new is a serious or significant challenge to teaching new skills or operations.
Employers said their most valuable training resource is the owners’ time, which competes with all other business operations. Owners and experienced employees invest significant time and resources in training and improving the skills of their employees. The time commitment to train employees in the most-skilled position is a far bigger investment for most small employers than associated out-of-pocket costs.
Labor markets have become very tight since 2017. Twenty-two percent of small employers who have hired an employee for their most-skilled position in the last two years lowered the minimum qualifications for applicants that they previously required, and 24 percent lowered them for the most common, less skilled position.
Finding time to train new and current employees is a serious or significant challenge for 33 percent of employers compared to 18 percent reporting training costs as a serious or significant challenge.
The survey data is of 1,504 responses collected from a random sample of 20,000 NFIB members between September and November 2018.