The Big Business of Employee Education

January 9, 1981

Report Outline
Scope of Employee Training
College Credit Programs
Relearning the Basics
Special Focus

Scope of Employee Training

Billions Being Spent to Instruct Millions

Employee education has become a big and growing business within American industry. Large and medium-sized companies across the country underwrite or actively sponsor a vast range of programs, from formal on-the-job training to reimbursement of employees for college tuition. Corporate employers willingly do so in the belief that better trained and educated workers tend to be happier — and more productive. There is another important reason, too. Rapid changes in such highly technical fields as computerization, information processing and telecommunications have all but forced competing businesses to help their employees stay abreast of the latest advances.

“The whole thing is wanting … employees to understand our business better, and consequently be more productive, be more helpful, answer the needs of our customers,” said James C. Donohue, Xerox Corp.'s manager of education research and development. “As our business became more sophisticated, it became absolutely clear to us that if we were going to be successful, we had to train our people to do the kind of job we wanted them to do.” There also is criticism, by others in industry, that young men and women often come out of the American school system quite unprepared in such basics as reading, writing and arithmetic — and thus need remedial courses.

Because businesses have kept few records on their employee education activities, it is extremely difficult to determine the number of workers involved in educational programs and the amount of money businesses nationwide spend on them. What is known is that businesses are spending billions of dollars on employee education today and that millions of workers are taking advantage of the programs. The American Society for Training and Development, in Washington, D.C., estimates that private and public employers in this country spend about $30 billion to $40 billion annually on employee education. Alan P. Wagner, a professor of consumer sciences and retailing at Purdue University, comes up with a somewhat lower figure, about $10 billion, based on data from the National Center for Education Statistics, the U.S. Bureau of the Census and elsewhere. Although such estimates are “best guesses,” Wagner said, he nevertheless felt confident that employer-sponsored, off-the-job education programs — excluding tuition aid — would train 12.7 million individuals in the private sector in 1980.

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