In a rapidly changing economy, the skills workers bring to their jobs need constant updating. Employer-sponsored training—the investment companies make in developing their employees' capabilities—plays a crucial role in maintaining workforce competitiveness, supporting career advancement, and addressing skills gaps. Yet employer investment in training varies widely, with some workers receiving substantial development opportunities while others receive little or none. Understanding patterns of employer-sponsored training, its benefits and limitations, and the policy questions it raises helps workers navigate career development and informs debates about workforce development policy.
What Is Employer-Sponsored Training?
Forms of Training
Employer-sponsored training takes many forms. Formal training programs include courses, workshops, seminars, and certification programs—either delivered internally or through external providers. On-the-job training involves learning through work itself, often with guidance from supervisors or experienced colleagues. Mentoring and coaching provide individualized development support. Job rotation exposes employees to different roles and departments. Educational assistance programs help employees pursue degrees or credentials at educational institutions.
Who Provides It
Larger employers generally offer more training than smaller ones—they have resources to develop training programs and economies of scale that make training cost-effective. Certain industries invest more heavily in training, particularly those requiring specialized skills or facing rapid technological change. Unionized workplaces often have training provisions negotiated into collective agreements. But overall, employer investment in training varies enormously across Canadian workplaces.
Benefits of Training
For Employers
Employers invest in training expecting returns. Training can increase productivity as workers gain skills relevant to their jobs. It can improve quality and reduce errors. It can enable adoption of new technologies and processes. Training may improve employee retention—workers who feel invested in may be more loyal. It can fill skills gaps when external hiring is difficult or expensive. Strategic training builds organizational capability for competitive advantage.
For Workers
Training benefits workers by building skills that enhance job performance, increase employability, and support career advancement. Trained workers may earn higher wages, both immediately and over time. Training can make work more engaging and satisfying. Portable credentials obtained through employer-sponsored programs can facilitate job mobility. Access to training opportunities is often a valued aspect of employment beyond direct compensation.
For the Economy
Employer-sponsored training contributes to human capital development, supporting productivity growth and economic competitiveness. Training helps the workforce adapt to technological change and shifting skill requirements. Widespread training can reduce skills mismatches that constrain economic performance. The aggregate effect of employer training decisions shapes the Canadian economy's capacity to compete and innovate.
Patterns and Disparities
Who Gets Trained
Access to employer-sponsored training is unequal. Higher-educated workers receive more training than less-educated workers—those who already have more skills get opportunities to develop more. Younger workers may receive more training than older workers, despite older workers facing pressing needs to update skills. Full-time permanent employees receive more training than part-time or temporary workers. Managers and professionals receive more than frontline workers. Women may receive less training than men in some contexts.
Industry Variation
Training investment varies across industries. Knowledge-intensive industries like technology, finance, and professional services tend to invest heavily in employee development. Industries with lower-skilled workforces, including retail, hospitality, and some manufacturing, often invest less. This pattern can perpetuate inequality—workers in already disadvantaged positions receive fewer opportunities to develop.
Employer Size
Small and medium enterprises (SMEs) typically provide less training than large employers. They lack dedicated training staff, economies of scale, and sometimes awareness of training options. Yet SMEs employ a large share of Canadian workers. This gap means many workers have limited access to employer-sponsored development regardless of their potential or desire to learn.
Challenges and Limitations
Underinvestment
Many observers argue that Canadian employers underinvest in training compared to international competitors. Short-term financial pressures may discourage investments whose returns accrue over time. Fear of trained workers leaving for competitors—"poaching"—can reduce incentives to train. The costs of training are immediate and certain while benefits are future and uncertain. These factors may lead to systematic underinvestment in workforce development.
Relevance and Quality
Not all training is equally valuable. Some employer-sponsored training is narrowly job-specific, building skills useful only in the current position without transferability. Some is outdated or poorly designed. Training quality varies enormously. Workers may have limited information about whether training opportunities offered are genuinely valuable for their development.
Time and Access
Even when training is available, workers may struggle to access it. Training during work hours may be difficult when workloads are heavy. Training outside work hours competes with family responsibilities and personal time. Geographic distance from training locations creates barriers. Not all workers have equal ability to take advantage of training opportunities even when nominally offered.
Precarious Workers
Those in precarious employment—temporary, part-time, contract, or gig workers—typically receive little employer-sponsored training. Their employers have limited incentive to invest in workers who may not remain. Yet precarious workers may have the greatest need for skill development to improve their employment prospects. The growth of precarious work creates a training gap that traditional employer-based models do not address.
Policy Questions
Incentivizing Employer Training
Should government provide incentives—tax credits, grants, or subsidies—to encourage employer training investment? Such policies exist in various forms across jurisdictions. Proponents argue they address market failures that lead to underinvestment. Critics question whether public money should subsidize what employers might do anyway, or whether such incentives effectively target workers who most need development.
Training Levies
Some countries require employers to invest a minimum amount in training or pay an equivalent levy. Quebec's training levy, for example, requires employers above a certain size to spend one percent of payroll on training or contribute to a provincial training fund. Such policies ensure minimum training investment but may not target training where it is most needed.
Portability and Standards
When employer-sponsored training leads to recognized credentials that are portable across employers, workers benefit more than from firm-specific training. Policy can encourage use of industry-recognized credentials, support development of training standards, and promote transparency about training quality. Making training portable may also increase employers' willingness to invest, knowing that high-quality training attracts and retains workers.
Supporting Workers Directly
Rather than working through employers, some policies support workers' training directly—through individual learning accounts, tax credits for education expenses, or expanded access to public education. Such approaches may better serve precarious workers and those in small firms without training programs. They shift decisions to workers but may require guidance to navigate options effectively.
The Future of Employer Training
Technological Change
Rapid technological change—automation, artificial intelligence, digitalization—increases pressure for continuous skill development. Workers will need to learn throughout careers, not just at the beginning. How employers respond to this pressure, and whether employer-sponsored training adapts to changing skill needs, will shape workforce outcomes in coming decades.
Changing Employment Relationships
The traditional model of long-term employment with a single employer is becoming less common. If workers move more frequently between employers, who is responsible for their development? The decline of stable employment may require rethinking how training is funded and delivered—perhaps with greater roles for industry associations, public institutions, or portable individual accounts.
Questions for Further Discussion
- How can employer-sponsored training be extended to workers currently left out—those in small firms, precarious employment, or low-training industries?
- What role should government play in encouraging, requiring, or directly providing workforce training?
- How can training systems ensure quality and relevance as skill requirements rapidly evolve?
- Should training credentials be more standardized and portable across employers, and how might this be achieved?
- How should responsibility for worker development be shared between employers, workers, educational institutions, and government?