Print version Recommend this page Press release
12/ 2009
Bonn, 02.04.2009
Providing training - An investment that pays for enterprises!
Even though it initially generates costs, it is worth a company's while to provide in-house vocational training, primarily due to the benefits that arise when an enterprise hires its trainees upon completion of their training. Hiring one's former trainees saves the cost of recruiting workers on the external labour market. Furthermore, a company's trainees are more familiar with operational requirements than skilled workers from the external labour market are. 'Training companies' also enjoy image gains and increased attractiveness as an employer. A representative survey conducted by the Federal Institute for Vocational Education and Training (BIBB) asked some 3,000 enterprises in 2007 about the costs and benefits of providing in-company vocational training. A large majority stated that they were "very satisfied" or "satisfied" with the relationship between cost and output. Only 10% indicated they were not satisfied. BIBB has now published the findings from this survey in the latest issue of BIBB Report (8/2009).
These findings show that enterprises incurred an average of € 15,288 in gross costs per trainee and year in 2007. This figure contains € 9,490 (61%) in personnel costs for the trainee and € 3,292 (22%) for the personnel costs incurred for the instructor. Equipment and material costs averaged € 691 (5%) while miscellaneous costs totalled € 1,814 (12%). This latter category includes chamber fees, costs for external training courses and administrative costs for training.
However trainees do more than generate costs: The work they do also contributes to the individual company's productivity. Their productive work is worth an average € 11,692 and must be subtracted from the gross costs. This yields an average of € 3,596 in net costs per trainee and year for enterprises that provide in-company vocational training.
The net cost of providing in-company vocational training averaged € 2,557 in Germany's eastern states and € 3,880 in the western states. A fundamental reason for this is the 'wage gap' - differences in the levels of the training allowances, wages and salaries paid - between the two sections of the country. Net costs vary greatly depending on the training sector. The highest net costs were incurred in the civil service sector (€ 7,234) and in trade and industry (€ 4,607). They tended to be low in the agriculture sector (€ 962) and in the liberal professions (€ 268). Net costs averaged € 2,513 in the crafts and skilled trades sector.
Net costs however are also offset by the savings companies can realise. For example, when an enterprise does not provide in-company vocational training, the costs that arise in connection with personnel recruitment because it is necessary to hire skilled workers on the labour market must be taken into account. According to the BIBB survey, a company spends an average of € 4,214 on this. The most important factor here are the € 2,319 in costs that arise from the difference in output between a skilled worker who has been hired from the external labour market and a skilled worker who the company trained itself. This difference arises because an external skilled worker must first be familiarised with the new job. The application process in itself generated costs averaging € 1,191. Enterprises additionally invested an average of € 704 in continuing training for a new employee during the necessary familiarisation period. Personnel recruitment costs averaged € 3,032 in the eastern states, approximately 30% less than in the western states where this figure was € 4,447. Once again, the wage gap between the two regions was the reason for this difference.
Companies that hire their own trainees upon completion of training enjoy further benefits which cannot however be calculated in euros and cents:
- According to the BIBB survey, even after the familiarisation period, differences still exist in the output of former trainees and external skilled workers who have been recruited on the labour market.
- The risk of choosing the wrong person for the job and the turnover rate for skilled workers who the company trained itself are much lower than for persons hired on the labour market.
- Hiring one's own trainees avoids the cost of lost working hours that arise when a company cannot meet its skilled labour needs externally and consequently, for example, experiences production bottlenecks or cannot meet deadlines.
- Enterprises that provide in-company vocational training enjoy a better image among public, customers and suppliers.
The new BIBB Report (Issue 8/2009) "In-company Vocational Training - A Worthwhile Investment for Enterprises. Findings from the 2007 BIBB Cost-Benefit Survey" contains detailed information. This issue can be downloaded free of charge from the BIBB web site at www.bibb.de/bibbreport
Point of contact for further information at BIBB:
- Harald Pfeifer, Tel.: + 49 (0) 228 107 1335, E-mail: mailto:harald.pfeifer%20@%20bibb.de
- Felix Wenzelmann, Tel.: +49 (0) 228 107 1327, E-mail: mailto:wenzelmann%20@%20bibb.de
