Surge Continues in Learning and Development Spending

Bersin by Deloitte, a leading provider of research-based membership programs in human resources (HR), talent, and learning, found that overall spending on training rose 12 percent on average in 2012  a sign that amidst greater financial stability, organizations are focused on reskilling their workforces. 
 
Detailed findings are included in Bersin by Deloitte's The Corporate LearningFactbook® 2013: Benchmarks, Trends, and Analysis of the US Training Market study, which is available to Bersin by Deloitte WhatWorks® members via BersinInsights, the personalized and integrated member information platform, and for sale to nonmembers. Summarized in Bersin by Deloitte's complimentary WhatWorks brief, the research provides data, including trends in metrics over time, and guidance to help learning and development executives make valuable investment decisions. 
 
"As the pace of innovation accelerates and companies look to expand their operations, employees should acquire more specialized skills and adapt to a workplace that grows more transient, mobile, and self-serving  what we call the 'borderless workplace,'" said Bersin by Deloitte's Karen O'Leonard, lead analyst, benchmarking, Deloitte Consulting LLP. "Modern learning organizations are embracing these changes by rethinking how they operate to closely align with business needs. For US organizations, that means committing more dollars to develop internal talent and to build the desired skills for competitive advantage."
 
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  both sectors showed 20 percent upticks in training spending. These significant investments are each backed by strong rationales. Technology is a high-growth, fast-paced arena that demands almost constant change. US 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 (L&D) maturity. This is important because the research shows that spending and resource allocations differ markedly, depending on the L&D organization's focus and effectiveness.
 
Among the research study's additional findings:
  • Mature companies spend 34 percent more. In 2012, US companies spent an average of $706 per learner. However, organizations with mature, effective L&D functions (high-impact learning organizations) spent $867 per learner  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 L&D functions help to build the required human capabilities within their organizations to meet business goals and respond to change. 
  • Large businesses triple their spending on social learning. Social learning is one catalyst for the transformation in L&D. In 2012, large US companies spent just over $46,000 on average in 2012, nearly triple the spending of just two years ago. Social learning can be extremely effective when incorporated into a more structured program, such as combining a formal course with a learner discussion forum. 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 way, 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 L&D 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 L&D function, which no longer is "the place" for learning. Instead, the role of the L&D team is to facilitate and enable learning. L&D teams should build skills in performance consulting, gain expertise in new technologies including social and mobile, and work to cultivate strong learning cultures within their organizations.
  • More spending on products and services. US companies spent on average 16 percent of their training budgets on external learning services, up from 12 percent in 2009. The types of services purchased have 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 solutions. The research shows a different trend, however, among high-impact L&D organizations, which 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. 
The full report is available for $795 for a PDF and $925 for a print copy. For more details, go to http://www.bersin.com/clf-us. In addition, Bersin by Deloitte research members may be able to attain custom benchmarking results for their organization. Bersin by Deloitte's scorecards, assessments, and services help organizations assess and consistently improve their training and organizational learning strategies. 
 
Those interested in learning more about Bersin by Deloitte or its WhatWorks membership may e- mail info@bersin.com or call (510) 251-4400.
 

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