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Study: Organizations Spending More on Employee Development
Oakland, Calif. — Jan. 16Bersin & Associates, a research and consulting firm, announced new research that shows spending on employee development rose 9.5 percent to an average of $800 per learner in 2011, as organizations moved to combat the skills gap in the labor market. The findings appear in “The Corporate Learning Factbook 2012: Benchmarks, Trends and Analysis of the U.S. Training Market,” which is part of Bersin & Associates’ series of factbooks.The research found U.S. training organizations continuing on the road to recovery, following double-digit spending cuts in 2008 and 2009 with a slight uptick of 2 percent in 2010. The research also found that large business investment in social learning tools in 2011 nearly doubled to $40,000 on average.“U.S. companies are now reinvesting in training to address a major skills gap, which we identified in the market more than a year ago,” said Josh Bersin, Bersin & Associates’ president and CEO. He added that the doubling of investment by large businesses on social media shows social learning is no longer considered an experiment.The research is based on a study of about 600 companies and includes in-depth interviews with about a dozen learning and development leaders.The study also found that employees received more development in 2011, with learners averaging 15.3 hours, up from 12.8 hours in 2010. However, much of the focus is outside of the formal learning event. L&D organizations have realized that these formal learning events must be reinforced to provide lasting benefits. As a result, these organizations are focusing more on getting employees to internalize the knowledge and apply the skills through continuous, reinforced learning environments. These efforts include manager coaching, collaborative tools and experiential exercises.The study also found that:• High-impact learning organizations commit more time and financial resources but fewer staff members to achieve results. Organizations that are more efficient, effective and aligned with the business spend $1,021 per learner on training — significantly more than the national average. They also deliver more training — 20 hours per learner annually.
These organizations deliver their services with 4.3 L&D staff per 1,000 learners — a significantly lower ratio than the U.S. average of 5.2. How do they achieve all this? By using staff effectively, pushing more delivery to local resources, and building informal learning environments to develop and support learners. Most importantly, these organizations outsource more learning services — allocating 20 percent of their training budgets to external providers, vs. a U.S. average of 14 percent.• L&D teams are extending their reach through non-training professionals, such as subject matter experts and managers. Although L&D teams added staff this year, the additional headcount has been far outpaced by faster growth in learning populations. As a result, the overall ratio of training staff relative to the employee population has declined to 5.2 L&D staff per 1,000 learners in 2011 from 6.7 L&D staff in 2006.
• The shift to online training and social learning has changed the mix of competencies needed on the L&D team. Most traditional classroom instructors now find themselves spending much of their time outside of a physical classroom to deliver more training online and in one-on-one sessions with learners. In addition, L&D organizations are moving out of the mode of “order taking” to build consulting skills and to provide effective recommendations and solutions to business partners.Source: Bersin & Associates
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