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Corporate Training Spending Training Up 12% In 2012, Study Finds | Wide World of Work

Corporate Training Spending Training Up 12% In 2012, Study Finds

Corporate training spending rose 12% on average in 2012, a sign that amidst greater financial stability, organizations are focused on reskilling their workforces, a new study found.

The fining is one of the results of human resources consulting firm Bersin by Deloitte’s new training industry study, “The Corporate LearningFactbook 2013: Benchmarks, Trends, and Analysis of the U.S. Training Market.”

“As the pace of innovation accelerates, and companies look to expand their operations, employees should acquire more specialized skills and adapt to a workplace that grows more transient, mobile and self-serving – what we call the ‘borderless workplace,’” said Karen O’Leonard, lead analyst, benchmarking, Deloitte Consulting LLP.

“Modern learning organizations are embracing these changes by rethinking how they operate to closely align with business needs,” O’Leonard said. “For U.S. organizations, that means committing more dollars to develop internal talent and to build the desired skills for competitive advantage.”

The research is based on a study of more than 300 corporate training organizations representing a broad cross-section of company sizes and industries.

Technology and manufacturing industries showed the biggest budget gains or training and development.

Both sectors showed 20% increases in training spending. These significant investments are backed by strong rationales.

Technology is a high-growth, fast-paced arena that demands almost constant change. U.S. manufacturing is undergoing major shifts to remain competitive at a global level.

For the first time, this year’s study breaks out metrics for organizations at different levels of learning and development (L&D) maturity.

Research shows that spending and resource allocations differ markedly, depending on the L&D organization’s focus and effectiveness, according to the study.

Among the training industry research’s additional findings:

Mature companies spend 34% more on corporate training.

In 2012, U.S. companies spent an average of $706 per learner.

However, organizations with mature, effective L&D functions (high-impact learning organizations) spent $867 per learner – 34% more than spending by companies at the lowest maturity level.

High-impact learning organizations focus on improving performance through training and other talent initiatives. These L&D functions help to build the required human capabilities within their organizations to meet business goals and respond to change.

Large businesses triple their spending on social learning.

Social learning is one catalyst for the transformation in L&D. In 2012, large U.S. companies spent more than $46,000 on average in 2012, nearly triple the spending of just two years ago.

Social learning can be extremely effective when incorporated into a more structured program, such as combining a formal course with a learner discussion forum.

In addition, high-impact organizations are becoming effective at creating employee networks, connecting novices to experts through expertise directories, and sharing knowledge through communities of practice.

Social learning, combined with formal programs, experiential learning and ongoing support and reinforcement, is part of a shift from blended corporate training programs to continuous learning environments.

The L&D footprint continues to shrink.

Although many corporate training teams added staff during the year, these additions were outpaced by faster growth in learning populations.

As a result, the overall “footprint,” or ratio of training staff relative to the learner population continued to decline in many companies.

This trend is one sign of the changing role of the L&D function, which no longer is “the place” for learning. Instead, the role of the L&D team is to facilitate and enable learning.

L&D teams should build skills in performance consulting, gain expertise in new technologies including social and mobile, and work to cultivate strong learning cultures within their organizations.

More spending on corporate training products and services.

U.S. companies spent on average 16% of their corporate training budgets on external learning services, up from 12% in 2009.

The types of services purchased have changed, with more money going to off-the-shelf content and less to custom instructor-led training, as many companies turn to less costly and more time-efficient learning solutions.

The research shows a different trend, however, among high-impact L&D organizations, which spend less on off-the-shelf content and more on instructor-led content development and delivery services.

They also invest more in assessment services, which help them to develop skills where needed. Many corporate training organizations start with standardized content, and then recognize the need for a more customized learning approach as they mature.

 

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