Why Does Learning Matter?

What questions should presidents and chief learning officers be asking about the current state of training and organizational learning in their companies?

How Much Are We Spending on Training, and What Is Our Return?
Industry studies show that companies are spending $2,000 per employee annually on training. For a relatively small company, this represents a multimillion-dollar investment. For a Fortune 500 firm, it may reach a quarter of a billion dollars. In many corporations, training has surpassed all other areas of HR spending, and executives are demanding an equal level of attention to managing costs.

An astonishing number of companies today cannot even quantify, with any confidence, what they spend on training--let alone where, why and how effectively it is being spent. Many are undertaking benchmarking projects to document current training costs and practices, as a means of credibly explaining what they are investing in training and the value achieved.

Because training is so decentralized, the accountability for spending is broadly distributed and hard to control. Processes for budgeting, capturing and recovering costs vary widely. Companies rely heavily on outside providers—committing 25 percent to 75 percent of their budgets to third-party vendors—and with the recent influx of technology and service providers for training, an already fragmented supply chain continues to mushroom and splinter. Even if executives have not yet quantified the opportunity, most understand that the current system is costly and inefficient.

Is Training Getting to the Right Places and People?
While U.S. companies continue to focus growth strategies globally, studies show that employees outside North America receive only 15 percent to 25 percent of the training opportunities available to employees within the United States. This should be an important goal for U.S.-based multinationals: Increase by a factor of five to 10 the availability of training to non-North American populations.