KRIVET Issue Brief People are Our Hope
On-the-Job Training (OJT) Enhancement (II): Company Awareness Survey
- Those who are participating or have participated in OJT stated that it contributed to the establishment of the education and training system and reduced the cost of new hire education.
- OJT was shown to effectively resolve the skill mismatch of new hires and improve the competency of trainees on site.
- To improve the retention rate of trainees, there is a need to: 1) expand the benefits of special military service to participating companies; and 2) propose a specific career development model that fosters trainees to become experts.
01 Need for Analysis and Data for Analysis
| Due to the nature of OJT, the corporate role has a significant impact on the system’s outcome. As such, the benefits of OJT, as well as the implications for the company, has been examined.
Since 2014, OJT programs have been implemented to support the transition from a credential-based to a merit-based society. These aim to resolve the labor mismatch with the industrial demand and reduce the youth unemployment rate.
Various organizations have participated in the OJT program. Of these, the role of businesses that provide work experience and on-site training to employees is critical.
Implications will be drawn based on the effects of OJT programs on participating companies.
| Data for analysis: Raw data from the Survey of Subjects Participating in On-the-Job Training Programs, by Human Resources Development Service of Korea, and Korea Research Institute for Vocational Education & Training (2019)
Subjects for analysis: 5,381 people
- Business owners (1,104 people); 2) field trainers (1,111); 3) HRD managers (1,145); 4) trainees (2,021).
<Table 1> 2019 Population and sampling size of subjects participating in OJT programs1
Subject Population Sample Size
1. Business owners 12,228 1,104
2. Field trainers 39,283 1,111
3. HRD Managers 13,568 1,145
4. Trainees 53,761 2,021
Total 118,840 5,381
Publisher: Young Sun Ra | Date of issue: August 24, 2020 | Issued by: Korea Research Institute for Vocational Education and Training (KRIVET)
2020 No.192
I Note I
For the population, only figures that accurately represent personal information in HRD.
NET were used with cooperation from the Korea Employment Information Service (KEIS).
I Footnote I
1) Due to space limitations, refer to detailed data collection methods in Sangho Kim et al. (2019). A study on the conditions of each participant in OJT programs. Human Resources Development Service of Korea and Korea Research Institute for Vocational Education &
Training 2019-15-5.
KRIVET Issue Brief
| Method of Analysis: Effects of OJT programs as perceived by participating company staff were analyzed using ten key indicators in five categories.
- The key indicators in selected categories were as follows: the establishment of a company’s education and training system, new labor supply, reduction of the cost related to new hires, increased retention rate of trainees, and increased job competency of trainees.
- The method of analysis used descriptive statistics based on the 2019 Survey of Subjects Participating in OJT Programs.
<Table 2> Key indicators by category and diagnostic method
Category Key Indicator
1. Establishment of education and
training system 1-1. Degree of contribution to the establishment of the companies education and training system
2. New labor supply 2-1. Degree of contribution to the recruitment of new hires 2-2. Degree of contribution to resolving job mismatches 3. Reduction of the cost related to new
hires 3-1. Degree of reduction of costs related to new hires
3-2. Degree of reduction of costs related to retraining new hires 4. Increased retention rate of trainees 4-1. State of trainees upon completion of the program
5. Increased job competency of trainees 5-1. Degree of the competency improvement of trainees compared to skilled workers 5-2. Degree of the competency improvement of trainees after OJT training
5-3. Degree of the competency improvement of trainees after Off-JT training
02 Survey Result
| Establishment of education and training system – OJT has been shown to contribute to establishing a company’s education and training system.
Evaluating the effects of an education and training system after adopting an OJT program, all respondents stated that it positively impacted each category: business owners gave 3.64 points, HRD managers 3.69 points, and field trainers 3.59 points.
- In particular, employers, field trainers, and HRD managers all answered that OJT had the greatest effect during “systematized training process preparation.” Alternatively, they perceived that OJT had a relatively small impact on “establishing educational facilities.”
[Figure 1] Perceived contribution of OJT to the establishment of the education and training system
| New labor supply – OJT has been shown to help improve the new labor supply and resolve skill mismatch.
On evaluating whether OJT programs effectively improved the new labor supply, 76.4% of business owners and 72.3% of HRD managers responded “Yes.”
- Considering that the main participants of OJT were small- and medium-sized businesses that often experience difficulties in hiring, this system is an effective means for OJT trainee recruitment.
[Figure 2] Perceived effects of OJT in improving new labor supply I Note I
Measured on a five-point scale (① Did not contribute at all ⑤ Contributed greatly)
Business owners (N=1,104) HRD managers (N=1,145) Field trainers (N=1,111)
'Yes' (76.4%)844 Business
owners (N=1,104)
'Yes' (72.3%)828 managers HRD
(N=1,145)
3.63 3.64 3.57
3.65 3.61 3.61
3.65 3.66
3.54
3.71 3.71 3.63
3.50 3.57
3.47
3.64 3.69
3.59 3.8
3.7 3.6 3.5 3.4
3.3
Total Creating a community of learners within the
company
Complete stock of job
training textbooks Establishment of systemized education
and training process
Establishment of independent educational
facilities
Training the training teacher within the
company [Score out of 5]
August 24, 2020
Evaluating the effectiveness of OJT in resolving skill mismatch, field trainers gave 3.62 points, and trainees gave 3.50 points.
Hence, it can be said that both respondent groups recognized OJT’s effectiveness in resolving skill mismatches.
[Figure 3] Perceived effects of the OJT in resolving skill mismatch
| New hire-related cost – The cost of new hires decreased by ￦ 370,000, while the cost of retraining decreased by ￦ 810,000. The total cost reduction equaled ￦ 1,180,000.
OJT programs reduced ￦180,000 job-posting and promotional expenses, ￦120,000 interview-related expenses (hiring an external interviewer, etc.), and ￦70,000 applicant assistance costs.
Retraining cost upon hiring was decreased by ￦810,000, from ￦1,860,000 to ￦1,050,000.
- Combining the survey results concerning new hire-related costs, it can be seen that OJT programs effectively reduced unnecessary expenses.
[Figure 4] Comparison of new hire and retraining expenses, before and after implementing an OJT program
| Trainee retention rate – upon completion of the OJT program, the retention rate was 62.7%.
Upon completing the OJT program, 62.7% continued to work as employees in the same company; 12.1% relocated to a different company in the same field; 9.4% relocated to a company in a different field.
- Considering the 48.6%2 turnover rate (<1 year since hire) of new hires, over half of the trainees working as employees in the same company can be deemed a positive effect.
[Figure 5] State of trainees upon program completion
Before participation After participation
I Note I
Survey target: HRD managers (N=1,145)
I Note I
Survey target: Those who completed the OJT program (N=1,122)
I Note I
Measured on a 5-point scale (① Did not contribute at all to ⑤ Contributed greatly)
Field trainers (N=1,111) Trainees (N=2,021) )
I Footnote I
2) Headline News (Jul. 30, 2019).
https://www.iheadline- news.
co.kr/news/articleV- iew.
html?idxno=40507. Accessed Jul. 29, 2020.
3.62 3.50
3.58 3.47
3.63 3.47
3.66 3.52 4.0
3.8 3.6 3.4 3.2
3.0
Total Relevant expertise Relevant skill Appropriate attitude
[Score out of 5]
97
56
30
186 369
79
44
23
105
251 200
150 100 50 0
400 300 200 100
0 Job posting and
promotional expense interview expense Total cost
Recruitment of new personnel
applicant assistance
cost retraining cost [unit: KRW (￦)]
(persons(%)) 703(62.7%) 136(12.1%)
108(9.6%) 106(9.4%) 32(2.9%) 8(0.7%)
29(2.6%)
Working as an employee in the same company Working in a different company in the same field Searching for a job Working in a different field Entered a school Founded a company Other
0 100 200 300 400 500 600 700 800
KRIVET Issue Brief
｜ KRIVET Social Policy Building, Sejong National Research Complex, 370, Sicheong-daero, Sejong-si, Republic of Korea ｜ Tel: 044-415-5000/5100 ｜ www.krivet.re.kr ｜
| Enhancement of trainee competency – OJT/Off-JT training process significantly enhanced the competency of trainees.
Upon investigating the perceived effectiveness of OJT on competency and setting a skilled worker’s competency as 100%, it was found that trainees’ competency increased by 31.0 percentage points, from 55.6% to 86.5%.
[Figure 6] Before/After comparison of trainee competency
Upon investigating the effect of the OJT training process on the enhancement of job competency, the average score obtained was 3.78.
- 7.3% answered “Not very effective + Not effective at all,” and 27.2% answered “Somewhat effective.” Hence, it can be considered that 65.5% of the trainees felt that the OJT training process positively affected their job competency.
Upon investigating the effect of the Off-JT training process on the enhancement of job competency, the average score obtained was 3.64.
- 11.0% answered “Not very effective + Not effective at all,” while 30.5% answered “Somewhat effective.” Hence it can be considered that 58.4% of trainees felt that the Off-JT training process positively affected their job competency.
[Figure 7] Perceived effects of OJT and Off-JT training processes on individual job competency
임.
임.
03 Implications
Participating companies have a generally positive perception of OJT programs. Policies should be developed to enhance the effect of OJT programs.
OJT was shown to establish the internal job training system effectively. It is necessary to review the measures to implement OJT in the companies that lack training facilities by providing facility support or allowing them to implement their OJT program in a different company.
Both corporate field trainers and trainees perceived that OJT was partly effective in resolving skill mismatches. However, to increase the effectiveness of an OJT program upon hiring, more systematic selection criteria and procedures should be established to match the job duties of the company and the competencies of the trainees.
Jeon, Seong-jun (Research Associate, KRIVET)
I Note I
1) Survey target: field trainers (N=1,111)
2) A skilled worker is defined as an employee who has been working in the same company for 3 years or longer.
I Note I
1) Survey target: Trainees (N=2,021)
2) Measured on a five-point scale (① Not effective at all to
⑤Very effective)
55.6%
GAP: 31.0%p 86.6%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
Beginning of the training Completion of the training
[OJT] [Off-JT]
468(23.2%) 401(19.8%)
855(42.3%) 780(38.6%)
550(27.2%)
Average: 3.78 Average: 3.64
617(30.5%)
89(4.4%) 151(7.5%)
59(2.9%) 72(3.6%)
Very effective Very effective
Effective Effective
Somewhat effective Somewhat effective
Not very effective Not very effective
Not effective at all Not effective at all
0 500 1000 0 500 1000
