Small Employers May Not Be Taking Full Advantage of Training Programs

Small employers are less likely to use available training programs and resources—especially federally sponsored training programs—than are larger employers, according to the extremely limited quantitative data available. Institutional barriers may limit small employer participation in programs because they may discourage or disqualify small employers from accessing the programs. Employers told us that this assistance was critical because it helped to reduce the time needed to complete the paperwork and comply with other administrative requirements. The state training fund programs also emphasize technical assistance to help individual small employers that were not involved with consortia reduce economic barriers to participation. The case studies focused on (1) program goals and operations, (2) characteristics of the specific barriers faced by small employers for participation, and (3) whether any methods had been developed to address the barriers and foster small employer participation. Program officials acknowledged that the amount and detailed nature of the information required may discourage small employers from participating in the program because they may not want to spend the time necessary to apply for the funding, even though they may recoup their costs in the end. They noted that they did not need to train workers now because all of their workers were trained and skilled. Consortia Minimized Barriers Associated With Costs of Finding and Training Employees

Participating employers we interviewed said that TMA and EBA reduced many of the economic costs associated with finding qualified employees or training employees.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed small business employers' participation in federal training programs, focusing on: (1) the extent of their participation; (2) barriers that limit their participation; and (3) options for overcoming those barriers.

What GAO Found

GAO found that: (1) small businesses are less likely to use training programs than larger employers because of the prohibitive costs associated with training programs, the time needed to comply with administrative requirements, the reduced productivity of workers during training, and high attrition rates associated with newly trained employees; (2) training programs' institutional requirements may discourage or disqualify small employers from participation; (3) small employers' limited knowledge of the training programs and their needs may further prevent their participation; (4) while a reduction of institutional barriers may require fundamental changes to training programs, alliances among small employers have helped to reduce economic and informational barriers to their participation; and (5) technical assistance from training programs helped reduce economic barriers to participation for small employers that did not want to become involved with alliances or had no access to alliances.