The Daily, Monday, February 19, 2001. Workplace and Employee Survey

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Workplace and Employee Survey

Nearly one-quarter of all workplaces, accounting for more than one-third of paid employees, made a significant investment in new computer technology in 1999, according to data from a new survey. These major investments in computer technology were not associated with either higher employee layoff rates or slower employment growth, at least in the short run, but rather with a burst of computer-related training.

In the 12 months prior to March 1999, an estimated 24% of all establishments accounting for 37% of paid employees implemented a major new software application or hardware installation. These numbers exclude upgrades to existing software applications and hardware installations.

Not surprisingly, workplaces that adopted computer technology provided more computer-related training than did other establishments. However, other data in the survey indicated that employees most often turned to self-learning and on-the-job training to acquire skills applying to specific hardware or software.

While some speculate that the adoption of computer technologies may result in job losses or gains, establishments that adopted technologies had about the same rates of both permanent layoffs and employment growth as other establishments, at least during the year the technology was adopted.

These are initial findings of the 1999 Workplace and Employee Survey, a new survey of 6,300 workplaces and 24,600 of their employees. It will follow workplaces for at least four years and employees for two years, supporting research on both employer and employee outcomes.

Close link between computer technology and training

The association between training and adopting computer technology is obvious: employees need to learn how to use new systems and software. But for employers, the question is how to provide enough training to reap the gains of new technologies without overspending. The survey found that computer technology adoptions generally were associated with substantially higher levels of computer-related training. However, formal training comprised only a small part of overall computer learning activities.

Note to readers

Data in this release come from the new Workplace and Employee Survey (WES), conducted by Statistics Canada with the support of Human Resources Development Canada and the Policy Research Initiative. It is designed to provide an integrated view of the activities of employers and their employees. The survey will enable researchers to link business policies, practices and outcomes with employee characteristics, activities and outcomes.

The WES is a dual survey, with both employer and employee components. Employers are sampled by physical locations. Employees are then sampled from employer-provided lists within each location. The survey covers technology adoption, innovation, human resource practices, labour turnover and business strategies of employers, as well as wages, training, technology use, working hours and other workplace activities of employees.

The WES was conducted for the first time in the summer and fall of 1999. Just over 6,300 workplaces and about 24,600 employees responded to the survey, representing response rates of 94% and 83%, respectively. Beginning with this initial cycle, the survey will follow workplaces for at least four years and employees for two years. This longitudinal aspect will allow researchers to study both employer and employee outcomes over time.

This report focuses on computer technology adopters. A workplace was considered to have adopted computer technology if it had implemented a major new software application and/or hardware installation, excluding hardware or software upgrades, between April 1, 1998 and March 31, 1999. In either case, the implementations would affect at least half of the users in the workplace or a department within the workplace. The per-capita cost of the hardware or software implementations was calculated by adding the cost of the two most expensive implementations and dividing by the total number of employees in the location.

Fifty-one percent of workplaces that adopted computer technology provided formal or informal computer-related training in 1999, almost three times the rate of about 18% among those that did not adopt such technology. However, the intensity of the training efforts of employers can vary substantially, so it is important to look at the proportion of employees who received training. Twenty-three percent of employees of hardware/software adopters received computer-related training, 1.4 times as many as the 14% of employees of other establishments.

The incidence of training increased with the per-capita cost of the hardware and/or software implemented. Thirty-two percent of employees in establishments that paid on average $2,500 or more per employee for this new technology received training, compared with 19% of employees in workplaces that spent up to $699.

The training rates of computer technology adopters may have been elevated simply because they had more computer users. Two-thirds of the employees in implementing establishments use computers, compared with 56% in non-implementing workplaces. But the same result persisted when looking only at computer users: those in technology-adopting workplaces were 38% more likely to receive computer-related training than were computer users in other establishments.

The training boost associated with computer technology implementation was also confirmed with a statistical analysis that controlled for such factors as establishment size, industry, unionization rate and occupational structure.

Despite the strong relationship between hardware or software purchases and computer-related training, computer technology implementations do not seem to have spillover effects into other forms of training. Employees in workplaces that invest in computer technology are no more likely to receive other types of formal or informal training than are their counterparts in other establishments.

Computer users most likely to rely on themselves or co-workers for training

Employees' computer-related learning activities go beyond the formal and informal training provided by their employers. In fact, when asked how they acquired their job-specific computing skills, 45% of employees said they taught themselves using materials such as manuals, books and on-line tutorials.

About the same proportion, 44%, stated that they received on-the-job training provided by co-workers, supervisors, resource people, and so on, while 23% cited employer-paid formal training. Much smaller numbers of employees reported learning their main computer application through college or university courses (7%) or through other self-paid formal training (3%).

This tendency to rely heavily on informal training methods to acquire the skills needed to use computer applications applied equally to employees of computer technology adopters and those of non-adopters.

Thus, establishments adopting computer technologies typically incur not only the direct costs of the hardware and software, but also the elevated formal training costs associated with the implementation. And formal training activities represent only a part of all training activities related to computer applications. Time spent by employees on informal training activities also bear consideration.

Few computer implementations have an immediate impact on employment

Whether computer technology implementations actually displace workers has been much debated. According to the short-run evidence from the survey, jobs are generally no less secure in establishments adopting computer technology than they are in other establishments.

Permanent layoff rates tended to be somewhat lower among computer technology implementers (3.4%) than among other establishments (5.1%). Furthermore, layoff rates did not increase with the size of the investment in computer technologies, something one might expect if these technologies were displacing labour in the short-run. A more comprehensive statistical analysis - accounting for possible differences in size, industry, unionization rate and other factors - showed no significant difference in the layoff rates of implementers compared with non-implementers.

The story was much the same for employment growth. Computer technology implementers had a similar rate of growth (4.4%) to non-implementers (4.1%), but further analysis showed that the difference was not significant after controlling for other factors.

Employers corroborated the minimal impact of their computer technology implementations on employment. Among workplaces whose computer implementation was their most expensive technology purchase, 92% reported no impact on non-management employment and 95% reported no impact on management employment.

However, averages can be somewhat misleading. In any year, some workplaces contract, others grow. Overall, there was more employment volatility among establishments adopting technologies. The survey found that 29% of workplaces that implemented new hardware or software expanded their work force during the same year, compared with 19% of workplaces with no major computer technology purchases.

About 11% of technology adopters saw their work force shrink, compared with 8% of non-adopting establishments. Further analysis confirmed that computer technology implementers were more likely than other establishments to either expand or contract, when factors such as industry, size, unionization and occupational structure are controlled for.

It is important to note that these results pertain to a single year. The impact of computer implementations on employment may accumulate over time. As well, the most significant employment effects may have occurred when establishments were first adopting the technologies. Computer use is now widespread, as the survey shows. This issue will be revisited as the Workplace and Employee Survey follows its panel of employers over the next few years.

Other issues that will be examined in forthcoming studies include an overview of workplace practices in Canadian companies, including "family-friendly" practices; the effect of foreign competition on the productivity-enhancing behavior of companies; a study of job vacancies; and the link between the education level of an establishment's work force and its technology adoption and innovation practices.

For more information on this release, contact Ted Wannell (613-951-3546), Business and Labour Market Analysis Division. For information on the Workplace and Employee Survey, or to enquire about the concepts, methods or data quality of the survey, contact Howard Krebs (613 951-4090; fax: 613-951-4087; labour@statcan.gc.ca), Labour Statistics Division.