Overview of Employers Utilizing the Workforce Development Training Fund

Occasional Paper No. 3

Workforce Development Training Fund Evaluation at the Macro

and Micro Levels

This portion of the Workforce Development Training Fund (WDTF) evaluation provides the context in which program participants work. The results present a descriptive overview of employers utilizing the WDTF.

Research results are based on all employers who received funds from the WDTF at any time prior to the end of third quarter 2003 (2003Q3) and appeared in the Wage Records database in that quarter (2003Q3). Employment is defined as individuals who worked at any time during 2003Q3, which includes job switching and multiple job holding. Industry classifications were assigned using the North American Industry Classification System (NAICS) codes (Office of Management and Budget, 2002).

Data from the Quarterly Census of Employment and Wages (QCEW; Brennan, 2003; U.S. Department of Labor, 2003) and Unemployment Insurance mainframe programs were used to visually inspect the Unemployment Insurance account numbers provided in the Workforce Development Training Fund database (Wyoming Department of Workforce Services, 2004), as some difficulty arose in the matching process due to incorrect account numbers.¹

The information contained in the tables and figures does not describe a causal relationship between any employer descriptive attributes (e.g., turnover) and program utilization. Although the narrative contained herein focuses on the figures, readers may access additional and/or detailed information by viewing the tables.

Results in Brief

Wyoming employers participating in the Workforce Development Training Fund (WDTF) generally possessed the following traits in 2003Q3:

    l Large size (i.e., 50 or more workers)
    l Established firms (i.e., two-thirds had eight or more years experience in the state)
    l High pay (WDTF firms paid an average of 46.4% more per worker than firms statewide)
    l Disproportionately concentrated in certain industries (Health Care, Manufacturing, Retail Trade)
    l Low turnover
    l Relatively low proportions of workers 24 years of age or less

Results in Detail

Figure 1 displays the distribution of WDTF and all Wyoming employers in 2003Q3. The chart indicates that the proportions of WDTF participating employers in Manufacturing (11.8%), Retail Trade (15.2%), Information (3.3%), and Health Care & Social Assistance (18.2%) were higher than the distribution of all employers (3.3%, 12.2%, 1.6%, and 7.3%, respectively). Conversely, industries where the opposite was true included Natural Resources & Mining, Construction, Leisure & Hospitality, and Other Services. Table 1 indicates that 1.9 percent of firms operating in 2003Q3 had used the WDTF.

Figure 2 shows that while more than 70 percent of firms statewide employed fewer than 10 workers, only 25.8 percent of WDTF firms employed fewer than 10 workers. In contrast, 34.0 percent of WDTF employers had 50 or more workers, compared to the statewide average of 5.4 percent. The size difference for participating employers is further highlighted when analyzing the distribution of workers shown in Figure 3. More than three-fourths of workers attached to WDTF firms worked for employers of 100 or more employees, while only 1.4 percent worked in firms with fewer than 10 employees. At the same time, 14.4 percent of workers statewide were employed in firms of fewer than 10 workers, while 45.6 percent of workers statewide worked in firms of 100 or more employees. Following the results in Figure 3, the average size (number of workers) of employers participating in the WDTF was considerably higher than all employers. The differences were particularly large in Natural Resources & Mining (394 compared to 23), Wholesale Trade, Transportation & Utilities (137 compared to 12), Financial Activities (81 compared to 8), and Education Services (262 compared to 152; see Figure 4). Overall, WDTF employers averaged 92 workers compared to 17 for employers statewide in 2003Q3.

The differences in worker age between WDTF employers and all employers (see Figure 5) were less than the differences in employer size (see Figure 4). Wyoming employers generally had higher proportions of workers under age 25 (18.8% compared to 12.7%) than WDTF employers.² However, 58.3 percent of workers in WDTF firms were 35 years of age or older compared to 51.2 percent statewide.

Figure 6 shows that the proportional difference between men and women in WDTF firms (1.5%) was smaller than in the general population (2.8%). We were able to identify the gender of people working for WDTF employers more often than workers for all statewide firms because a greater percent was found in our administrative records (from which we draw demographics). Therefore, we conclude that workers attached to WDTF employers had a great likelihood of state residency than employers in general.

Turnover rates (Glover & Leonard, 2003) were considerably lower for workers in WDTF firms than for workers statewide as shown in Figures 7, 8, and 9. Figure 7 shows that the overall turnover rate for WDTF employers was 14.9 percent, compared to the turnover rate for workers statewide of 25.5 percent.³ The differences in turnover rates were particularly large in Natural Resources & Mining (18.3% compared to 6.8%) and Professional & Business Services (35.5% compared to 18.4%). Turnover rates were higher for WDTF employers than for employers statewide in the following three industries: Information (17.7% compared to 16.1%), Education Services (30.8% compared to 12.9%), and Other Services (30.7% compared to 20.1%). Age group results in Figure 8 show a similar pattern. While turnover rates among workers less than 20 years of age were comparable (50.1% for employers statewide compared to 49.1% for WDTF), differences were more pronounced in other age groups. For workers between 45 and 54 years of age, turnover rates for employers statewide were more than twice that of participating employers. Figure 9 shows that the turnover rates for men and women statewide were nearly equal (21.9% compared to 21.7%). Turnover rates for both men and women were lower in WDTF firms (11.5% and 13.9%) than statewide.

WDTF employers paid their workers 46.4 percent more on average than employers statewide (see Figure 10, All Industries). While the difference in wages paid between WDTF-participating and non-participating firms were smaller in Construction, Manufacturing, Financial Activities, and Health Care, substantial differences were observed in Natural Resources & Mining and Professional & Business Services. The scenario repeats in Figure 11, where men working for WDTF firms earned 47.7 percent more than men statewide, and women working for WDTF firms earned 45.4 percent more than women statewide.

Program utilization tends to vary by the amount of operating experience firms have in Wyoming. Figure 12 shows that more than two-thirds (67.0%) of employers participating in the WDTF had operated in Wyoming eight or more years since 1992Q1, compared to 52.8 percent statewide. WDTF participation was lower than statewide in businesses with fewer than two years of experience (6.7% compared to 16.8%, respectively).

Conclusion

Employers utilizing the WDTF pay higher wages, have more operating experience, have lower turnover, and have a higher proportion of men than do employers statewide. In addition, employers participating in WDTF programs are much larger on average than the average employer statewide. This could be due to a variety of factors. First, larger and more established firms may be more likely to have a dedicated human resource department that can manage WDTF reporting requirements, thereby making it easier for them to participate. Second, larger firms may be better positioned to provide stable, long-term employment opportunities than do smaller firms regardless of program participation. Third, firms in certain industries may be more likely to form associations in which program information may be disseminated more easily than through program personnel contact. The substantial differences between participating and non-participating employers poses interesting questions for future research which may be able to explain whether or not program participation leads to changes in attributes.

Notes

¹The QCEW program produces a comprehensive tabulation of employment and wage information for workers covered by state unemployment insurance (UI) laws and federal workers covered by the Unemployment Compensation for Federal Employees (UCFE) program (Bureau of Labor Statistics, 2003).

²Worker demographics (age and gender) were developed using Wyoming driver’s license data (Wyoming Department of Transportation, 2003). Some data were imputed using methods developed by Research & Planning (Glover, 2001a and b).

³Two columns are shown in Tables 11, 12, and 13 for each employer participation status: stable and turnover. Stable indicates the number or proportion of workers attached to an employer during the prior quarter (2003Q2), the current quarter (2003Q3) and the subsequent quarter 2003Q4). Turnover indicates workers who terminated employment during the current quarter (2003Q3) and did not reattach to the same employer until at least 2004Q2.

References

Brennan, N. (2003). [Quarterly Census of Employment and Wages]. Unpublished raw data.

Glover, T. (2001a, April). Enhancing the quality of wage records through imputation: Part one. Wyoming Labor Force Trends. Retrieved February 11, 2005, from http://doe.state.wy.us/LMI/0401/a2.htm

Glover, T. (2001b, June). Enhancing the quality of wage records through imputation: Part two. Wyoming Labor Force Trends. Retrieved February 11, 2005, from http://doe.state.wy.us/LMI/0601/a1.htm

Glover, T. & Leonard, D. (2003, December). Your firm's employee turnover: How to calculate it and how it compares. Wyoming Labor Force Trends. Retrieved March 9, 2005, from http://doe.state.wy.us/lmi/1203/a1.htm

Office of Management and Budget. (2002). North American Industry Classification System. (PB2002-101430). Springfield, VA: National Technical Information Service.

U.S. Department of Labor, Bureau of Labor Statistics (2003, December). Quarterly Census of Employment and Wages (ES-202) Program. Retrieved February 2, 2005, from http://www.bls.gov/cew/cewover.htm

Wyoming Department of Transportation. (2003). [Wyoming Driver’s License Database]. Unpublished raw data.

Wyoming Department of Workforce Services. (2004). [Workforce Development Training Fund Database]. Unpublished raw data.