Finally, Good News: Training Budgets Up Over 9 Percent, Survey Says

Each year Bersin & Associates surveys the training landscape, asking companies how much they’re spending on training, and distills the results into its annual Corporate Learning Factbook (an executive summary is available for free download here).

The resulting report holds a mirror up to the industry, reflecting, for example, the extreme cost pressures faced by learning and development organizations during the recession — and its gloomy aftermath over the last few years, as budgets were either cut or grew only anemically. But finally, this year, despite not exactly experiencing the sort of recovery that makes everyone break out the champagne and party hats, there is at least reason to crack a smile.

Training Budgets Rising

The training market may not be frothy with optimism, but at least training budgets are starting to rise again, climbing 9.5 percent in 2011 to an average of $800 per learner. That adds up to a total of $67 billion spent by U.S. corporate training groups in 2011. Besides slightly improved economic tidings, the causes of this uptick seems to include a growing sense among organizations that they can’t simply sit around and wait for someone else to solve the skills gap problems that keep them from hiring enough trained employees.

The debate may rage over whether companies are doing enough (i.e. spending enough) to help themselves create the kind of workers they need, but as the discussion continues, it seems companies are quietly getting their immediately available workforce up to necessary levels of competence.

“With a scarcity of skilled talent in the labor market, companies realize they cannot solve their skills shortages externally,” according to the Bersin & Associates report. “To achieve competitive advantage, they must commit to developing the right skills internally.”

… But These Still Aren’t Boom Times

The report may be sweetened with a healthy dollop of optimism, but training professionals shouldn’t go overboard expecting organizations to start throwing tons of resources at learning and development departments.

“Across the board, from industry to industry, learning organizations are looking for better ways to scale their training efforts, and provide more efficient and far-reaching results for every dollar spent,” the report concludes. Purse strings might be loosening a bit, but companies still want the maximum bang for their training buck.

And this often means virtual or informal learning. By looking to these more efficient or cost-effective ways to deliver training, companies reduced the cost per training hour to $52 in 2011. That’s the lowest in the last six years. It’s also meant a decrease in the ratio of learning pros to employees. In 2006 there were 6.7 learning and development professionals per 1,000 learners. Now there are 5.2.

“This is partly driven by increased scaling provided by technology-based training, as well as the move to informal and collaborative learning, for which coworkers and subject matter experts (SMEs) assume some responsibilities once held solely by L&D staff,” the report explains. Increasingly, non-training staff are empowered by companies to train their colleagues in skills they’ve mastered.

For more on the findings, including information on the rise of social learning and ways some organizations manage to deliver more learning with fewer staff, check out the complete report.

What are your predictions for training in 2012?

Image used under Creative Commons by Flickr user Mr Wabu.

London-based Jessica Stillman blogs about generational issues and trends in the workforce for Inc.com, GigaOM and Brazen Careerist.

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