Job training provision by employers – an institutional analysis of employees in Hong Kong

Abstract

The institutional approach to job training emphasizes the ways institutional factors affect employees' chances of receiving job training from employers. Most empirical studies that apply institutional theories are about European countries; non-European cases are relatively understudied. We extended the application of one of the institutional theories, namely, the employment regimes theory to the Hong Kong case, in its context of the post-1997 Handover to China, to examine the provision of job training by employers. Analyses of primary survey data show that among the institutional factors highlighted by the theory, while firm size, public and private sector distinction and the presence of unions significantly affected employees' job training chances, contract and part-time employees did not differ significantly from full-time permanent employees. With regard to the specificity and intensity of the training provided to private sector employees, we argued that due to the institutional relationships between employers, a generally unorganized labour and the passive role of the government, employers' training provision to employees is both minimal and marginal to the overall business operation. The pattern of job training provision in Hong Kong is also in stark contrast with the normative values which Confucianism prescribes for employers. We concluded the study by discussing the theoretical and policy implications of our study.

Keywords:

• employment relations
• Hong Kong
• institutional theory
• job training
• labour movement
• state-organized labour relations

Notes

 1. Drawing on different datasets, Gallie (2007a, 23, 2007b, 92) noted that the incident rate of training participation among the working population in European countries ranged from 30% in Germany to 64% in Sweden. Dieckhoff and her associates (2007, 89) recorded that the incident rates ranged from 57.5% in Finland in 1994 to 7.5% in France in 2000. However, it is not clear whether these rates are about training supported by employers or arranged by employees themselves. It is, therefore, not possible to put Hong Kong into a comparative perspective.

 2. Most previous studies about job training participation do not distinguish employer-provided training from training that employees arrange for themselves (OECD 2003). These two types of training involve different determinants: whether employers provide their employees with training or not and which types of employees are being trained are affected by both capability and features of the employer as well as characteristics of the employee. The type of training which employees arrange for themselves and the consideration underlying their participation decisions are shaped by factors that are unrelated to employers, for example, job values and career-building strategies of the employee. In this study, we focus on training provided by the employers (regardless of whether the employees take up the training or not) and deal with self-arranged training in another study. Previous studies have also distinguished the two types of training, see Altonji and Spletzer (1991), Barrett and O'Connell (2001), Knoke and Kalleberg (1994), and Hoque and Bacon (2008).

 3. In the literature of social stratification, professionals and managers are considered as members of the service class, and skilled and unskilled manual employees are classified as the working class.

 4. See ‘Board Scraps “Frozen” Labour Laws Passed by Former Legislative Council,’ South China Morning Post, 16 August 1997 and ‘EXCO Decides to Scrap Two out of Five Pre-Handover Labour Laws,’ South China Morning Post, 1 October 1997.

 5. For detailed discussion of these institutional factors that shape the post-Handover employment relations systems, see Chiu, Tam and So (2008).

 6. For a review and an evaluation of some of these training support and measures, see Tang and Cheung (2007). In 2001, the government set up the ‘Continuing Education Fund’ to provide financial support to non-degree holders to pursue training programmes. The eligibility criteria was relaxed in 2003 to offer support to degree holders as well. The extent to which the government will develop a set of comprehensive training policies is still an open issue.

 7. Studies in the USA and Europe have noted consistently that firm size is positively associated with employees' access to job training provided by employers (Hoque and Bacon 2006; Knoke and Kalleberg 1994; Dieckhoff et al. 2007). Economies of scale mean that large firms are more likely to provide employees with job training at much lower costs, whether in the form of financial subsidies, in-house training or study leave, compared with small firms. Large corporations are also more likely to have formal human resources functions organized by a human resources department or specialists to develop human capital, which are more tailored to the firms' needs and to develop internal labour market (Knoke and Kalleberg 1994).

 8. A 2007 Training Needs Survey that covered mainly large corporations (100 or more employees) found that on average, these corporations set a training budget at 2.8% of the total annual base salary; and larger corporations (with more than 500 employees) have a higher budget (3.0%) than small (with less than 100 employees) and medium-sized (with 100–499 employees) firms (2.7% and 2.5% respectively). Among all responding firms, most budgets fell inbetween 1% and 1.9% (Hong Kong Institute of Human Resource Management 2006).

 9. A recent incident exemplifies the influence of staff associations in large corporations. On 15 July 2008, the staff association of Cathay Pacific, the Hong Kong airline, successfully negotiated with management to postpone the retirement age of flight attendants from 45 to 50.

10. See Kamoche (2003) for a discussion of the different ways Hong Kong corporations responded to the Asian Financial Crisis.

11. For details of the survey, see Chiu, So and Tam (2008).

12. For a discussion of measurement of informal job training, see Barron, Berger and Black (1997).

13. The survey also asked respondents whether they had ever joined unions. The membership rate is higher among public sector employees than among small- and large-workplace employees: the rates for the three sectors were 51.3%, 11% and 15.7% respectively.

14. The number of cases in some subgroups is too small to make multivariate analysis for the private sector feasible, for example, in the large workplace sample, there were only eight part-timers. This small N problem also makes it statistically infeasible to include interaction terms between size and other independent variable in the logistic regression.

15. Our findings regarding the way large employers selected trainees according to the employee's occupational classes is also noted in surveys of large corporations conducted by Hong Kong Institute of Human Resource Management. The Institute has been conducting annual training needs surveys among its members, who were mainly human resource management personnel from large corporations. In both the 2006 and 2007 surveys, it was found that in corporations with 100 or more employees, senior management personnel were more likely to be given training, compared with frontline workers (Hong Kong Institute of Human Resource Management 2006, 2007).

16. Owing to time constraints in our survey, we were not able to ask trainees about the types of training courses they had taken in order to further assess the specificity of these courses.

17. In Europe, the average duration of training per trainee ranged from 41 hours in Denmark to 26 hours in the UK (Gallie 2007b, 92). However, whether the data refer to employer-provided training or training employees arranged for themselves is not clear.

18. In the 2000 government survey of employees, the median duration was 20 hours; by the 2003 survey, the duration dropped to 16 hours (Census and Statistics Department 2000b, 2003). A recent survey of large corporations (more than 50 employees) found that the average duration was 3.1 days, and most corporations provided training which lasted for less than three days (Hong Kong Institute of Human Resource Management 2007).

19. Findings from the 2000 government survey of private establishments are in line with the above analyses. Of all establishments that had experienced changes in their business environment, over 70% of them did not plan to increase employee training. Surveys of large private corporations conducted by the Hong Kong Institute of Human Resources Management in 2001 and 2004 show that a considerable proportion of corporations adopted traditional and short-term human resource management methods rather than strategic methods in which formal planning and staff career development is closely linked to business planning (Hong Kong Institute of Human Resource Management 2001, 2004). That staff training and development were the most frequently outsourced human resources functions as noted by these two surveys further indicates that management do not regard employee training as an integral part of the firm's business or product development.