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In-company continuing vocational training despite employee departures?

Normann Müller, Ulrike Azeez

Translated by: Sarah Zimmer, English Language Services

Germany's anticipated shortage of skilled workers is a very talked-about subject - and is already reality in some sectors and regions of the country. In-company continuing vocational training is often regarded as being very important for meeting trade and industry's need for skilled labour. As part of its regular Referenz-Betriebs-Systems (RBS - Reference Company System) surveys, the Federal Institute for Vocational Education and Training surveyed training companies (companies that provide in-house vocational training) regarding their involvement in continuing vocational training. It also examined whether companies provide less continuing vocational training (CVT) when they fear that their employees will subsequently leave for another company. The following sections provide a brief outline of the participating companies' assessments and the survey's findings regarding employee departures and the provision of continuing vocational training.

The Referenz-Betriebs-System - RBS reference company system

The RBS survey system currently covers approximately 1,400 training companies which are surveyed with the aid of a written questionnaire several times a year regarding current issues in the area of in-company vocational training. The survey 1/2010 which was conducted between February 2010 and May 2010 had a response rate of 35.3 per cent (427 weightable questionnaires). To enable statements about training companies in Germany, the net random sampling was adjusted in terms of company size and location (eastern states or western states) to the corresponding marginal distribution. Since there were non-responses in some cases, the respective number of actual responses is also noted (n= the number of companies that responded).

Content

Does anticipation of employee departures hamper the provision of in-company continuing vocational training?

Actual provision of continuing vocational training

Operational requirements steer a company's provision of CVT < A>

Literature

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Does anticipation of employee departures hamper the provision of in-company continuing vocational training?

A total of 360 training companies provided information regarding employee departures. They were asked how many employees had left the particular company in 2009 at their own request. The ratio of this number to the total number of employees is the employee departure rate. It declines with growing company size (see Diagram 1).

 

Diagram 1:  Average employee departure rate in 2009, by company size

   Source: RBS Survey 1/2010; n=360
 

In many cases, workers who change employers can continue to use skills and competences they acquired while working for their former employer. Consequently, nearly all training companies (74%, n=393) hold that other enterprises also benefit from their investment in CVT when employees who have received CVT switch to another company. In fact, this figure rises to some 90 per cent among companies with more than 500 employees (n=127). However, considerably fewer companies say that this condition plays a role when deciding whether to assume the costs of continuing vocational training (see Diagram 2, p. 39): Large companies in particular say that they give little consideration to this aspect. In contrast, it is more likely that small and micro enterprises attach a degree of importance to it. Nonetheless, this aspect is generally not a deciding factor.

 

Diagram 2:  Level of importance that anticipated employee departures have for a company's assumption of continuing vocational training costs
When deciding whether to assume training costs, does the fact that other enterprises may benefit from your investment when employees who have received CVT switch employers play a role in your decision?

  Source: RBS Survey 1/2010; n=356

In line with this, most (some 88% of all companies) said that they would not invest more even if fewer of their employees were to leave their company at their own request (n=345). Companies in the smallest size classification constitute the only exception here: A total of 19 per cent said that they would increase their investment. Most of the companies in this group were craft businesses.

Training companies largely disregard the possibility of employee departures when investing in continuing vocational training for their employees, at least according to this data. Although they are of the opinion that other companies also benefit from their investment in continuing vocational training, they said they generally do not cut down on their spending. The behaviour of competing companies also appears not to be detrimental to a company's provision of continuing vocational training. Only four per cent would cut back on their own investment in CVT (n=393) in the event that other companies in the same sector were to increase their investment. Most (81%) said they do not respond at all to the CVT policies of other companies in the same sector. Fifteen per cent said they would increase their investment as well. This would seem to indicate that CVT also serves to keep a company attractive for its employees in comparison to competing companies.

 

Diagram 3:  Anticipated risk of employee departure after assumption of continuing vocational training costs
With your company's assumption of CVT costs, the risk of employee departure ...

  Source:  RBS Survey 1/2010; n=393

This finding tallies with the answers given to the question of whether the risk that employees who have received CVT might switch to another company increases, declines or remains the same when a company assumes the cost of CVT. A good 24 per cent of the 39 companies answering this question believe that said risk is more likely to decline. Only in isolated cases is it feared that employees would in fact be more likely to switch to another company after having received in-company continuing vocational training. The majority however assumes that the provision of continuing vocational training does not have any influence on whether their employees take up employment with another company (see Diagram 3).

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Actual provision of continuing vocational training

Based on the parent population of training companies in Germany, 62 per cent of the companies reported that they had financed CVT in 2009. Banks, insurance companies and the public sector were particularly active (see Diagram 4). 1  the As to be expected, the provision of CVT increases with company size. It is striking that the employee departure rate in companies that did not finance CVT in 2009 was markedly higher than it was among other companies (8.7% as opposed to 4.7%). This however is largely attributable to a company-size effect, as can be shown using a multivariate analysis.

 

Diagram 4:  Financing of continuing vocational training measures in 2009

  Source: RBS Survey 1/2010; n=416

 

Diagram 5:  Continuing vocational training costs, broken down by migration rate (in euros)

  Source:  RBS Survey 1/2010; n=232

When only companies which have financed continuing vocational training for their employees are examined, it appears that expenditure falls with higher employee departure rates (Diagram 5). This finding however also proves not to be robust when other company attributes are taken into account. Companies spent an average of €229 per employee on continuing vocational training. 2  the Banks and insurance companies invested the most. Investment in CVT was also relatively high in the public sector (see Diagram 6). The level of CVT involvement among micro enterprises is striking. The latter provide financing less frequently (see Diagram 4), but when they do, their per capita expenditure is apparently higher.

 

Diagram 6:  Continuing vocational training costs per employee (in euros)

  Source: RBS Survey 1/2010; n=251 (companies that financed CVT)

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Operational requirements steer a company's provision of CVT

In their responses, the companies surveyed gave the impression that their provision of CVT was primarily geared to operational needs and not to tactical considerations related to employee departures or the CVT policies of competing companies. If anything, CVT tends to be perceived as a means of ensuring employee loyalty. The data regarding actual CVT behaviour supports these statements only in part: namely, there is evidence for a negative correlation between the level of CVT provision and employee departure patterns. This evidence does not however stand up to a statistical examination. It should be noted in this context that the survey involved a random sampling of companies which had already decided to provide initial vocational training and were possibly less sensitive than non-training companies to having employees leave them for other companies after receiving initial or continuing vocational training. For greater certainty, larger datasets would be needed plus a more nuanced set of questions which would also enable a more reliable assessment of the causality of a possible effect.

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Literature

  • KÄPPLINGER, B.; MORAAL, D.; SCHÖNFELD, G.: Ergebnisse der europäischen Betriebsbefragung Continuing Vocational Training Survey 3 (CVTS3). In: BIBB (Ed.): Datenreport zum Berufsbildungsbericht 2009. Bonn 2009, pp. 247-252

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footnotes:

1 This figure cannot be directly compared with the rate that was determined for enterprises in Germany in the European Continuing Vocational Training Survey (CVTS). Apart from the fact that the CVTS was conducted at an earlier point in time, it must be noted that the questions used in the CVTS questionnaire were much more nuanced and the CVTS involved a different parent population (see Käpplinger/Moraal/Schönfeld 2009).

2 This figure roughly corresponds to the direct costs of €237 per employee which were determined in connection with the CVTS (KÄPPLINGER/ MORAAL/SCHÖNFELD 2009). When the cost of lost working hours is taken into account, the CVTS figure more than doubles.

Last modified on: June 15, 2011

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Publisher: Federal Institute for Vocational Training (BIBB)
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