Measures of training costs in Australia

Abstract

Purpose

To evaluate past and recent research on the costs of training human resources in Australia and to compare the merits of different research methods used to measure these costs. The discussion is situated in a general context of low employer contribution to training provision in Australia and acute policy debates on public training provision.

Design/methodology/approach

The article presents the aggregate results of two recent quantitative surveys of training costs in Australian organizations. Both surveys adopt an economic definition of the costs and concentrate on firm‐specific skills acquired up until new recruits reach average productivity.

Findings

Survey results suggest that the informal costs of training human resources outstrip direct training expenditure and average training costs are much larger than commonly assumed in the policy debate in Australia.

Research limitations/implications

Ideally, the surveys reported upon should be extended to include continuing training costs and a measure of the degree of employer‐provided general training.

Practical implications

Official surveys largely underestimate the cost of employer‐provided training in Australia, contributing to (mistaken?) perceptions of private sector disengagement. Existing measures of the costs should adopt a more comprehensive approach, including the use of economic concepts.

Originality/value

This research stresses, both to HR practitioners and policy makers, the value of measuring opportunity costs in training processes, and contributes to its quantification.

Citation

Freyens, B. (2006), "Measures of training costs in Australia", Management Research News, Vol. 29 No. 8, pp. 495-511. https://doi.org/10.1108/01409170610692815