2009 Corporate Learning Factbook Reveals 11% Decline in Corporate Training Spending
Trend Data Shows More Focus on Compliance, Job-Specific, and Industry-Specific Training; Coaching and Informal Learning; and Increase in Outsourcing
Economic constraints have taken a toll on corporate training budgets. Bersin & Associates' just-published 2009 Corporate Learning Factbook shows that over the last year, companies have cut training spending and staffing; changed training program priorities; moved to coaching, informal learning, collaborative activities, and other less costly training methods; and increased reliance on outsourcing.
The U.S. corporate training market shrunk from $58.5 billion in 2007 to $56.2 billion in 2008, the greatest decline in more than 10 years Average training expenditures per employee (which include training budgets and payroll) fell 11 percent over the past year - from $1,202 per learner in 2007 to $1,075 per learner in 2008. Staff resources also took a hit. In 2008, large companies employed 3.4 training staffers per 1,000 learners, down from 5.1 per 1,000 in 2007; mid-sized companies employed 4.9 staffers per 1,000 learners in 2008, compared to 7.0 staffers per 1,000 in 2007.
According to President Josh Bersin, the numbers tell a story bigger than these and other numbers might indicate. "As the saying goes, only when the tide goes out can you see who's swimming naked. In good years, training organizations continued to funnel dollars and staff into traditional and often non-strategic training programs. When budgets became tight, organizations with a traditional training focus suffered most."
"Today's business world demands a combination of formal and informal learning with an emphasis on collaboration, knowledge sharing, social networking, coaching, and mentoring. While formal, instructor-led training is not going away, it is becoming a smaller and smaller percentage of training budgets. Business, HR, and learning leaders must think differently about corporate training and focus on those informal and collaborative strategies that will save money and increase the breadth of organizational learning."The study is based on data collected through an August 2008 survey conducted in partnership with Training Magazine.
The Factbook offers corporate training executives baseline metrics which can be used to assess the efficiencies, spending, and practices of their own corporate training initiatives. Findings are broken down by company size and industry sector, so executives can compare their own metrics with those from comparable organizations.
The average number of formal training hours dropped from 25 hours per learner in 2007 to 17.2 hours in 2008. Training consumption dropped most substantially among small and midsize businesses, with learners taking 33 percent fewer training hours, on average, than in 2007
Although instructor-led classroom training remained steady (at 67 percent of all training hours), the proportion of e-learning decreased for the first time ever in 2008. Companies also reduced their use of virtual classroom training, so that (combined with self-study e-learning) the total amount of online training dropped from 30 percent of training hours in 2007 to 24 percent in 2008. This shift illustrates the industry's steady move toward informal learning and social networking.
As companies downsized their training staffs, many turned to external providers to fill the resource gaps. Large businesses, in particular, outsourced more functions to third-party providers in 2008, as their staffing numbers were hardest hit.
via PR News Wire