Workforce Development Trends
Reflecting the Importance of Continuing Education
and Lifelong Learning

According to the University Continuing Education Association (UCEA), employers have begun to recognize that money spent on training employees is more realistically an investment rather than a cost. A more skilled workforce results in increased economic productivity. So, organizational spending on workforce education and training is on an upward path.

A workforce with higher skill levels is more productive.
Increasingly, education and skills are seen as important determinants of the employ-ability and income potential of the worker. The productivity of labor—the output produced per hour of work—is becoming more and more a function of what the employee knows and can do. As the economy shifts to one in which the value of strong minds increases relative to that of strong backs, employers seek skilled and educated workers. The demand for education thus increases.

In 1948, men who had finished less than 12 years of formal education completed 60 percent of the hours worked by men. By 1997, this figure had dropped to 12 percent. Women with less than 12 years of formal education accounted for 50 percent of hours worked by women in 1948 and only 9 percent in 1997.

In 1999, the Bureau of Labor Statistics attempted to compute the contribution of increased worker skill to increased productivity. They estimated that in the period 1973-79, increased worker skill accounted for only 2 percent of overall increased productivity. In the period 1990-1997, 32 percent of increased workforce productivity was estimated to be due to increased knowledge and skill. This underscores the changing nature of the U.S. and global economies and stresses the increasing importance of knowledge and skills to economic productivity.

Continuing education helps employers retain employees and stay competitive.
Employers are using opportunities for education and training to attract and retain the best employees. Employers sponsor in-house training as well as underwrite the costs of education away from the workplace. Fifty-five percent of the companies ranked by Fortune Magazine as the "100 Best Companies to Work For" paid for between 21 and 40 hours of training per employee in 2001. Another 34 percent paid for 41 to 80 hours of training, and 8 percent paid for more than 80 hours of training per employee per year. In addition to training, many companies offer tuition reimbursement, college planning assistance and paid or unpaid sabbaticals.

A variety of other benefits offered to employees can positively affect an employee's ability to pursue continuing education or training. Flex-time, reduced hour employment, telecommuting and onsite childcare can all make the pursuit of higher education more easily attainable for working people.

Training of employees is an investment in two distinct ways. First, a more educated employee tends to be more productive. Second, training can be seen as a way to attract and retain talented employees.

Employers often outsource design and delivery of training.
Organizations use a wide variety of sources for training. Traditional colleges and universities are among the most commonly hired to provide training. Training Magazine estimates that 40 percent of all training received by employees is designed by outside sources.

Though outsourcing of training expenses remains strong, the proportion of training dollars spent outside any given organization has declined in the past three years. There has been a roughly corresponding increase in spending on wages and salaries of training staff. Cutbacks as a result of the recession forced organizations to curtail outside training expenditures in 2000.

Institutions of higher education are clearly a valuable source of workforce training. Those institutions that are best able to customize their learning products, keep pace with changing technologies, develop training content quickly and provide training on a flexible schedule are the ones most likely to be successful and grow their share of the workforce training market.

Copyright protected by University Continuing Education Association, Lifelong Learning Trends, Building a Quality Workplace, 2002. www.ucea.edu

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Authored by: Gina Mauller, Business & Government Educational Development, MU Extension
Source: Creating Quality Newsletter, Volume 11, Number 12, December 2002

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