The Impact of Structured Training on Workers’ Employability and Productivity - The CEI Exam

The Impact of Structured Training on Workers’ Employability and Productivity

Summary of: The Impact of Structured Training on Workers’ Employability and Productivity

Source: Manpower Research and Statistics Department, Ministry of Manpower, Singapore, in collaboration with the Singapore Centre for Applied and Policy Economics, National University of Singapore. (Paper No. 4/2006, December 2006).

Executive Summary: Key Findings at a Glance

  • Primary Beneficiaries: The study finds that relatively low-paid workers and those with 1 to 10 years of job tenure are the ones who benefit most from training.

  • Training Participation: Conversely, higher-educated individuals and workers with higher earnings are much more likely to participate in training programs.

  • Overall Impact: Most respondents reported positive outcomes, with the most common being that training helped them "do their jobs better" and "refreshed their knowledge and skills."

1. Introduction & Background

  • Objective: This study examines the impact of structured training on the Singapore labour market and investigates the factors that affect workers' participation.

  • Key Research Questions:

    1. Does structured training actually benefit those who have undergone it?

    2. What factors affect workers’ participation in structured training programs?

  • Data Source: The analysis uses microdata from the 2004 Labour Force Survey supplement on training.

2. Key Trends in the Singapore Context

  • As Singapore transitions to a knowledge-based economy, the demand for skilled workers is rising, creating a potential "skills gap."

  • In the 12 months to June 2005, 27% of the resident workforce participated in job-related training, a rebound from 2004 but lower than the peak of 34% in 2002.

  • Age and education level are strong predictors: older workers are less likely to train, while higher-educated workers are more likely to do so.

3. Factors Influencing Training Participation (Who Gets Trained?)

The study identifies two main groups of determinants:

A. Socio-Demographic Factors

  • Education: One of the most important determinants. Better-educated individuals are much more likely to participate.

  • Earnings: There is a positive relationship between a worker's earnings and their likelihood to train.

  • Age: Has a small positive impact for workers under 37, but turns negative for older workers.

  • Gender: Females are slightly more likely to participate, but the difference is not statistically significant.

  • Marital Status: Married workers are less likely to participate, likely due to higher opportunity costs (e.g., family responsibilities).

B. Employment-Related Factors

  • Occupation:

    • Most Likely to Participate: Production & related workers.

    • Least Likely to Participate: Working proprietors, Managers & Administrators, and Clerical workers (due to high direct and opportunity costs).

  • Industry:

    • Highest Participation: Education (64.5%), Public Administration & Defence (50.0%), Financial Services (45.1%).

    • Lowest Participation: Restaurants (7.5%), Wholesale Trade (12.1%), Retail Trade (15.3%).

  • Employment Status: Employees are most likely to train. Employers (with employees) are the least likely.

  • Job Tenure & Type: Temporary workers are less likely to participate. Tenure itself has no significant effect.

4. Impact of Training (What Are the Outcomes?)

The study analyzed six key outcomes:

1. Can Do Current Job Better

  • Most Likely to Report This: Lower-paid workers and those with 5 to 10 years of tenure.

  • Least Likely: Higher-earning workers.

2. Feel Employable in Other Jobs

  • Most Likely to Report This: Lower-paid workers, low-skilled occupations (e.g., labourers, cleaners), and temporary/part-time workers.

  • Education: Has a positive effect up to 14 years, then turns negative.

3. Get a Pay Rise/Promotion

  • Most Likely to Report This: Lower-paid workers and those with 1 to 10 years of tenure.

  • Least Likely: High-paid occupational groups (Managers, Professionals, etc.).

4. Get a New Job

  • Most Likely to Report This: Men, low-income workers, and temporary/part-time workers.

  • Note: The report cautions that this result may reflect these groups' higher job-seeking activity rather than the training's effect alone.

5. Refresh Knowledge and Skills

  • Most Likely to Report This: Workers in their late 30s and those in sectors requiring frequent updates (e.g., Public Administration, Health, Community Services).

  • Occupation: Production craftsmen and related workers are most likely to report this outcome.

6. Encouraged to Do Further Training

  • Most Likely to Report This: Younger trainees and production craftsmen.

  • Least Likely: The highest-paid occupational groups and workers in the Transport/Storage/Communications sector.

5. Policy Implications & Conclusion

  • Addressing the Participation Gap: Policy should focus on encouraging training among older, lower-educated, and lower-paid workers, as well as those in industries with low participation (e.g., retail, hospitality).

  • Targeting for Maximum Impact: Continued training support is critical for low-paid workers and those with 1 to 10 years of tenure, as they derive the most significant benefits.

  • Adapting Training Models: As labour markets become more flexible, employer-based training may be less effective for vulnerable groups. The findings reinforce the move towards more flexible, individual-based training systems and funding schemes.

Source: Ang Boon Heng, Park Cheolsung, Liu Haoming, Shandre M. Thangavelu, & James Wong. (2006). The Impact of Structured Training on Workers’ Employability and Productivity (Paper No. 4/2006). Singapore: Ministry of Manpower.

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