Economic Impact on Training Investments

Key Investment Areas
CLOs continue to use their training dollars efficiently, spending most on important areas that offer fast and visible results. The clear first choice is developing in-house training options. This reflects a cost-savings attitude and recognition that relevance of instruction is critical to its value.

Enterprises are also continuing to invest in e-learning –— again, reflecting pressures to deliver more training content to the widest possible audience. Informal learning and leadership and executive development are also investment priorities. Compared with the priorities from previous years, performance management has fallen in importance to the middle of the list of options. This may suggest that the other options represent a shorter, more visible return on investment, though the long-term value for performance management remains high.

One-quarter of companies expect to decrease investment in training facilities and equipment and in tuition paid out to colleges and universities. With community college and advanced degree program enrollment up, it is likely this reflects a reduction in employee benefits as opposed to an indication of a decrease in the perceived value of advanced degrees. Two other areas of investment decreases are expected to be in training and development personnel and payments to external learning services suppliers. Both of these priorities reflect the ongoing scrutiny of budgets and spending throughout the organization.

• Design and development of in-house training: Organizations build and develop training content for their unique requirements. These are typically related to unique knowledge or processes within the enterprise. As organizations focus on their core operations, in-house knowledge and the use of internal experts will increase.
• E-learning: E-learning offers many advantages, among them flexibility and convenience, and as such, this area continues to be a key investment priority for CLOs.
• Informal learning: Not the oxymoron that it appears to be, investing in the tools that support informal learning, such as social networking technologies or expert locators, can be beneficial to facilitating organizational development.
• Leadership and executive development: The core of executive development is leadership training, which continues to be a priority for large companies. As boomers retire, training and development professionals must prepare the next generation of executives that will replace retiring leaders. Combined with mentors and job rotations, leadership development increases retention rates among mid- and senior-level executives and helps enterprises ensure the talent and experience they require will be available when it’s needed.