Job Training and Vocational Rehabilitation Services

SIC 8331

Companies in this industry

Industry report:

This category encompasses establishments primarily engaged in providing manpower training and vocational rehabilitation services for the unemployed, the underemployed, the disabled, and persons who have a job market disadvantage because of lack of education, job skills, or experience. Included in this industry are upgrading and job-development services, skill training, world-of-work orientation, and vocational rehabilitation counseling. This industry also includes offices of specialists providing rehabilitation and job counseling. Establishments primarily engaged in providing work experience for rehabilitates are also classified in this industry.

Industry Snapshot

American industry spends tens of billions of dollars to train its employees each year. As industry becomes increasingly global and technology becomes more sophisticated, employers demand that workers sharpen their analytical, decision-making, and communication skills. In order to remain competitive, businesses need to provide their employees with continuous training. Likewise, to become employed and remain employable, individuals must be, at the minimum, literate and skilled. For many individuals, including those with vocational disadvantages such as illiteracy, a criminal record, former substance abuse, or physical and mental disabilities, education and training is received through job training and vocational rehabilitation centers.

There were an estimated 12,000 job training and vocational establishments operating in the United States in 2006, with combined operating revenues of almost $10.7 billion for taxable and non-taxed firms. These establishments employed 233,930 workers. Estimates of the cost of private-sector training vary widely, due to differences in the methods used and the difficulty of collecting cost data.

Job rehabilitation and training were expected to remain an important component of industry as continued technological advances necessitated enhanced skills from new and current employees. Corporate downsizing and rapid technological change in the workplace promised to focus more attention on building and retaining a skilled workforce. Training was a key element in that process. In fact, the American Society for Training and Development estimated that nearly 50 million workers needed additional training just to perform their current jobs adequately. In 2006, over $109 billion was spent on employee training and development.

According to the U.S. Census Bureau, 7,560 job training and vocational establishments operating in the United States in 2008 with industry-wide employment of 325,437 workers. California led with 28,413 establishments followed by New York with 493 and Texas with 326.

According to the American Society for Training & Development (ASTD), $125.88 billion was spent on employee training and development in 2009. Almost two-thirds or $78.6 billion was directed for "internal learning function" or staff and payroll and $47.3 billion was allocated for outside learning such as workshops, seminars, etc.

According to D&B Sales & Marketing Solutions, job training and related services comprised 52 percent in industry share with 82,778 people working in this area, followed by job training services with 14 percent of the market employing 28,642 workers. Other industry sectors were vocational rehabilitation agencies with 9.7 percent in market share employing 43,899 workers; 795 skill training centers with 5.8 percent; 643 sheltered workshops captured 4.7 percent; 631 community service employment training programs held 4.6 percent; and 526 job counseling centers with 3.8 percent.

Organization and Structure

Nationally, the industry was composed of many small companies, a majority being non-profits and state-supported organizations. In 2002, the top 50 companies had revenues of $2.8 million. This figure represented approximately 25 percent of the entire industry's sales.

In 2006, there were nearly 12,000 establishments in operation. During the 1990s, however, there was a sharp decrease in the number of state-run vocational rehabilitation service centers. In 1997, the U.S. Census Bureau reported 2,549 centers, compared to 2,643 in 1992, which represented an elimination of 94 state centers. Speculation on the reasons for this was varied. Cutbacks in individual state spending and federal subsidies accounted for some of the decline. High technology in the workplace created a much more efficient system with which workers could be trained and/or retrained. That was a model employed by state-run programs as well as many rehabilitation services were offered over the Internet and accessible from any computer.

Background and Development

Traditionally, training programs had been implemented in response to specific problems or situations, and little regard was given to previous programs or to the implications for the future. In general, most of the money spent on training programs went to programs for professional and managerial staff, ignoring other workers whose skill development would mandate more expenditure.

The number of individuals who lacked marketable skills fueled the growth of the rehabilitative and vocational training industry. Firms in this industry were formed as a result of the lack of training available to individuals without a college degree. Many of these companies operated on the premise that people would derive greater benefits from training programs if they were able to help themselves. This idea was the genesis of Goodwill Industries of America.

Based on the educational background of the unemployed and labor-market projections, the U.S. Office of Technology Assessment (OTA) found that a large segment of the U.S. labor force was fast becoming more prepared for employment in an increasingly high-tech workplace. Yet other groups, including the immigrants who made up 26 percent of the labor force growth in the 1980s and early 1990s, still had a need for more job training.

Additionally, employers and post-secondary institutions found that a number of high school graduates and college students needed remedial work in grammar, mathematics, and basic problem-solving skills before they could be ready for employment or college. As a result, efforts redoubled throughout the 1990s to ensure academic accountability through minimum proficiency requirements students had to pass to graduate. However, for those who had already been through the system and whose educational skills remained sub-par, job training and vocational rehabilitation services were designed to address needs for education and skill development and provide rehabilitative help and training for students and workers with insufficient knowledge and skills.

Goodwill Industries was started in the early 1900s by Edgar J. Helms, a Methodist minister working in Boston. Helms began collecting unwanted household items and hiring poor men and women to repair them for resale, and he paid workers through the sale of the goods. Goodwill Industries served not only low income people but also those with other "barriers to employment including physical and mental disabilities, illiteracy, homelessness, inadequate education, and welfare dependency." Goodwill Industries offered training in many fields, which ranged from computer programming to janitorial positions.

The passage of the Americans with Disabilities Act (ADA), which removed many employment barriers faced by physically disabled individuals, was expected to increase the number of clients served by training centers. Implementation of the ADA met with some resistance from employers who feared that they would be required to meet hiring quotas, and by employees who believed that physically disabled workers would receive preferential treatment in the workplace. The training and development industry worked to resolve these issues by helping to create and sustain supportive work environments for all workers. Training was well received when the trainers were sensitive to employee attitudes and encouraged open discussion.

Passage of the ADA represented significant growth potential for the training industry. In addition to providing training to employees, professionals in this industry found a market in corporations making changes to meet the federal regulations and needing insights about hiring and training physically challenged employees.

In August 1996, Congress passed the Personal Responsibility and Work Opportunity Act of 1996, which President Clinton signed. The legislation ended a 61-year federal guarantee of aid to the poor, giving states the power to design their own welfare programs, imposing a five-year lifetime limit on receiving welfare, and requiring recipients to begin working within two years after receiving benefits. Childless, able-bodied people, aged 18 to 50, were limited to three months of welfare every three months. They were eligible to continue receiving food stamps on the condition that they secure a 20-hour per week job and participate in job training or volunteer programs. President Clinton promised to encourage companies to help welfare recipients find employment. In light of this welfare reform, businesses were increasingly focusing on the their roles in the education and training of adults, youth, and disadvantaged workers.

In 2003, New York City joined trends in job training and placement by creating a city program that responded to the needs of local businesses. According to a report in The New York Times, the city had not been taking advantage of money made available through the Workforce Investment Act of 1998, which rewarded state and local governments who combined job-training programs with unemployment offices. Boston, Seattle, and Austin, Texas, were named as cities that quickly created programs to guide unemployed people to where they were needed most. In New York, millions of dollars went unspent and some funds were lost, until mayor Michael Bloomberg reversed policies that had been set in place by previous administrations. There are now one-stop centers in Harlem, the Bronx, and Queens.

Corporate downsizing was an influence on the growth of the industry. As corporations continued to downsize their operations, they often demanded that remaining workers increase their performance and skill levels. More corporations required that job applicants possess high-level skills and that they cultivate these skills through on-going training. In manufacturing, for example, the tradition of using workers to perform routine, repetitive duties was being replaced by teaching employees a broader scope of skills and adding to their responsibilities. Companies were emphasizing teamwork and were cross-training their workers to make production more efficient.

Much of the government funding for training in the mid-2000s focused on help with job searches rather than job training. According to The New York Times, "The problem is that someone laid off by a carmaker won't necessarily have the skills to work at a semiconductor factory, or even at a more advanced auto plant." Further, in 2006, the Manhattan Institute reported that 35 percent of boys do not graduate from high school and that many of these dropouts would have stayed in school if vocational training had been available. The long-running Job Corps, begun by President Johnson, also stepped up its goals, hoping to train its students for better paying positions with more secure industries.

The continued need for job training was seen across organizations in varied industries; over $109 billion was spent by organizations on training and development for their current employees, according to the American Society for Training and Development. In 2006, the 11,947 job training and related services establishments earned $10.7 billion in revenue.

Current Conditions

Since Goodwill Industries International, Inc. launched in 1999, its online auction of 5.6 million donated goods to support job-training and rehabilitation programs has generated $100 million by 2010. Additionally, has provided 33,000 individuals the training needed to land that job. The online auction has grown to 576,000 registered users in 50 states as well as many other countries. On average, there are more than 30,000 items posted for sale from about 169 categories. A few exclusive items sold were a Mercedes, a Picasso etching, and a watercolor painting by Frank Weston Benson for $165,002. Through its 2,400 retail store fronts and online auction site, the company had more than 66 million donors.

Goodwill Industries called on Congress and the new Administration to reauthorize both the Workforce Investment Act (WIA) and the Vocational Rehabilitation Act in 2009 following one of the worst economic downturns in U.S. history. As many as 180,000 people were directed to Goodwill Industries in 2007 as federal funding shortfalls had been on the rise. The company serviced a record 1.9 million people in 2009, up 28 percent compared to 2008. "In this time of economic uncertainty, Goodwill is seeing increased demand for its job training services," according to Jim Gibbons, president and CEO of Goodwill Industries International,

Thus, the American Recovery and Reinvestment Act of 2009 allocated $4 billion in funding for the Department of Labor for training and employment services. Goodwill industries received two rehabilitation grants under the American Recovery and Reinvestment Act (ARRA) in August 2009. The first, totaling more than $251 was expected to be directed in the area of green technology. The second, totaled nearly $54 million would go towards job coaching and job development services to individuals with disabilities.

Industry Leaders

Goodwill Industries International was one of the world's largest leaders in the industry. Goodwill Industries is a nonprofit corporation that served more than 846,730 clients in 2005, consisting of 166 organizations with full membership in the United States and a total of 207 Goodwill establishments in 24 countries. Goodwill receives clients through referrals, more than 50 percent of which are provided by the state vocational rehabilitation system and the public welfare system. In 2005, Goodwill placed 129,899 of these clients in competitive employment. Salaries and wages earned by clients in that year totaled $1.9 billion.

Goodwill's largest client group included people with such vocational disadvantages as illiteracy, past substance abuse, a record of criminal behavior, physical and mental disabilities, and a lack of work experience. People with mental retardation made up the second-largest group of Goodwill's clients. Goodwill Industries divided its vocational services into four categories: vocational evaluation, vocational adjustment, job-seeking skills and placement, and sheltered employment for those who could not realistically expect to succeed in a competitive environment. Goodwill also assisted clients with social adjustment training, and many of its facilities provided rehabilitation for persons with industrial injuries. In late 1999, The U.S. Department of Labor awarded Goodwill Industries International Inc. a $20 million grant to provide training and support to place men and women on welfare in career-building Census 2000 jobs. The grant was the result of Goodwill's partnership with the Census Bureau, with a goal to recruit and hire 850,000 employees to conduct the census, and to place Goodwill graduates in jobs.

Goodwill Industries funded its job training programs through store, salvage, and contract sales; rehabilitation fees and grants; and public support funds. This revenue went directly to job-training services, vocational rehabilitation, and equipment required by people with disabilities and other special needs. An average of 84 percent of all revenue raised by Goodwill Industries from the sale of donated goods, both in stores and at the online auction site, supported job-training and rehabilitation programs. The other 16 percent went toward overhead costs.

The U.S. Department of Labor's Employment and Training Administration awarded $100,000 Green Capacity Grant to Goodwill Industries in 2009, under the American Recovery and Reinvestment Act of 2009. During 2009 more than 1.9 million individuals benefited from Goodwill career services with 155,000 people placed in jobs. The company had revenues of $3.7 billion in 2009.

Another industry giant was Lions World Services for the Blind (LWSB), sponsored by various Lions Clubs. LWSB was formed to teach independent living skills or job training skills to people who are blind or visually-impaired. In the United States, 1.3 million Americans age 25 and older have severe visual impairments, causing them to make adjustments in areas of careers and everyday living situations. Since its founding in Little Rock, Arkansas, in 1947 until the end of 2006, LWSB has served more than 9,000 individuals in the United States and 57 other countries.

LWSB offers a variety of vocational training programs to prepare individuals who are blind or visually impaired for careers in both white and blue-collar jobs. By the beginning of the twenty-first century, LWSB offered 13 vocational programs, which included several courses that train students to work for the Internal Revenue Service. LWSB also provided a variety of other services, including a college preparatory program to prepare people for college work, job-seeking skills training, employer education workshops, job placement assistance on a selected basis, and in-service training for rehabilitation professionals.


In 2006, 233,930 people were employed by job training and related services establishments. The U.S. Census Bureau reported 325,437 people employed within the industry who earned annual wages of nearly $5.5 billion. The total number of employees climbed to 325,437 in 2008. According to the U.S. Census Bureau, the salary difference between non-supervisory workers in this industry and in all private industry was significant. In 2002, they earned an average of $10.34 per hour or $305 per week, compared to the average of $14.95 per hour or $506 per week in all private industries.

The industry relied on various instructors and workers to provide job training assistance to its diverse client base. Teachers and instructors in vocational education programs comprised a significant percentage of this industry's workforce, but other workers included counselors, social workers, and secretaries.

According to the U.S. Department of Labor, employment in this industry was expected to increase significantly by 2008. In 2002, the vocational rehabilitation services industry accounted for about 376,400 non-government workers, and a 49 percent increase was expected by 2012. When the twentieth century ended, job training programs began to require more workers, as the U.S. economy continued to grow at an unprecedented rate. Companies changed their mode of production more frequently, thus more workers needed to be retrained.

America and the World

In addition to simply making corporations more efficient, job training is key to keeping the United States competitive in world markets. Skills training enables U.S. companies to exploit the benefits of available technology. Enhanced skills will be necessary to run advanced computers, including interactive software. Training will help close the gap between non-skilled workers and sophisticated technology.

With the exception of Goodwill Industries and Lions World Services for the Blind, most companies in this industry do not operate internationally. In general, training needs for vocational jobs vary widely from country to country. Many other countries have advanced systems of job training and apprenticeship. The United States relies heavily on on-the-job training, while European countries, particularly Germany, have more focused, post-secondary education programs. Industry analysts expect that the United States will begin to follow Europe's example by establishing job-training programs in high schools and instituting a nationwide program of youth apprenticeship. Despite the attractiveness of a U.S. higher education to foreign students, the competitiveness of U.S. workers has declined compared with workers in some Asian and European countries because of weaker support for training and vocational education. These countries have used better-trained workers to shorten the production cycle and make incremental improvements in existing products, giving them a competitive edge over the United States.

Research and Technology

The industry did not rely on technology to function, but rather trained its clients to make use of existing technology. Advances in computer software and systems quickly became a primary focus of the job training industry, as corporations demanded that their employees improve their computer literacy.

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