Study: L&D Spending on the Rise

Oakland, Calif. — Jan. 22

Money spent on training rose 12 percent on average in 2012, according to a study by human resources research firm Bersin by Deloitte, a sign that, amid greater financial stability, firms are focused on the development of their workforces.

The detailed findings are included in Bersin by Deloitte’s new study, “The Corporate Learning Factbook 2013: Benchmarks, Trends, and Analysis of the U.S. Training Market.” The research is based on a study of more than 300 training organizations representing a broad cross-section of company sizes and industries.

The technology and manufacturing industries showed the biggest budgetary gains as both sectors showed 20 percent upticks in training spending. These investments are each backed by strong rationales, according to the study. 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 maturity. The research showed that spending and resource allocations differ markedly, depending on the learning organization’s focus and effectiveness.

Among the research study’s additional findings:

Mature companies spend 34 percent more, according to the study. In 2012, U.S. companies spent an average of $706 per learner. However, organizations with mature, effective learning functions — or “high-impact” learning organizations — spent $867 per learner. That’s 34 percent 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 learning functions help to build the required human capabilities within their organizations to meet business goals and respond to change.

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

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. In this vein, social learning, combined with formal programs, experiential learning and ongoing support and reinforcement, is facilitating a shift from blended training programs to continuous learning environments, the study suggests.

The learning footprint continues to shrink. Although many 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 learning function, which no longer is “the place” for learning.

U.S. companies spent on average 16 percent of their training budgets on external learning services, up from 12 percent in 2009, according to the study.

The types of services purchased have also 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 services.

The research showed a different trend, however, among high-impact learning organizations. They 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 training organizations start with standardized content and then recognize the need for a more customized learning approach as they mature.

Source: Bersin by Deloitte