Training the workforce
In United States, small and medium firms alike agree that the basic skills of their employees leave much to be desired and that insufficient attention has been paid to the supply of many vocational craft skills such as fitters, joiners and plumbers. The US system provides good university graduates at the top of the educational line but is deficient in the provision of basic schooling and vocational training for the majority. Relatively low productivity in the United States compared with other advanced countries can be traced in part to these deficiencies (Bates, 1998). What is being questioned here is the need for specific measures in the case of small firms and the level of understanding of the impact of some general training measures, such as levy systems, upon SMEs.
There is no doubt that SMEs do carry out less training for employees and managers than large firms. Survey results vary according to sample composition and how questions are phrased, and in particular to how training is defined. Most small firms have some sort of training provision for new recruits, irrespective of firm size, but in only a minority of owner-managers in the smallest firms, and in only a bare majority in larger firms, do managers have training for themselves.
When we come to look at the evidence on firms’ experience with labor shortages we find that the incidence of problems increases rather than diminishes with firm size (Bates, 1998). Obviously the degree of recruitment problems varies cyclically, but these patterns appear to persist throughout the cycle. A survey conducted by Coopers & Lybrand LLP revealed a similar pattern, though it also found that in terms of incidence of shortfalls in the number and qualifications of applicants, the seriousness of the problems fell away with size (Bates, 1998). This can be interpreted as being the result of greater experience in managing recruitment (large firms inevitably recruit more frequently – and pay higher wages). However, even if the analysis is restricted to firms that have recruited recently, the strong tendency for smaller firms to complain more than large about workforce shortages remains.
The view that small firms significantly under-train is supported by the beliefs that they lose more employees through dissatisfaction with their job quality and rate of personal progress (have higher employee turnover), and that they tend to solve their skills problems by simply poaching trained and experienced people from other (larger) firms that do carry out training (Lorber, 2008). Yet, these beliefs are not justified by the facts. There is no evidence that employees in small firms are any less (or more) satisfied with their jobs than are employees in large firms, either in the United States or in other countries.
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