Economy Taking a Toll on Training, Studies Conclude

By Frauenheim, Ed | Workforce Management, February 16, 2009 | Go to article overview

Economy Taking a Toll on Training, Studies Conclude


Frauenheim, Ed, Workforce Management


TRAINING & DEVELOPMENT

The recession is leading organizations to slash spending on training, two recent studies show.

Average training expenditures per employee fell 11 percent in the past year, from $1,202 per learner in 2007 to $1,075 per learner in 2008, according to a report issued in late January by research firm Bersin & Associates.

Bersin said its figures include training budgets and payroll. Bersin also said the U.S. corporate training market shrank from $58.5 billion in 2007 to $56.2 billion in 2008, the greatest decline in more than 10 years.

Bersin's report echoes a November study by training services firm Expertus and research provider Training Industry. The survey of 84 corporate and government training professionals found that more than twice as many respondents expect training-budget decreases rather than increases for 2009.

Forty-eight percent expect their budgets to decrease in 2009, up from 41 percent in 2008. Only 17 percent expect their budgets to increase in 2009. In addition, since 2008 budgets were first approved, far more saw decreases (38 percent) than increases (11 percent).

Bersin president Josh Bersin said organizations funneled money and staff into traditional and "often nonstrategic" training programs in good years.

"When budgets became tight, organizations with a traditional training focus suffered most," Bersin said in a statement. "Today's business world demands a combination of formal and informal learning with an emphasis on collaboration, knowledge sharing, social networking, coaching and mentoring."

The reports confirm the theory that training is among the first things cut during hard times, which today include a U.S. economy estimated to have contracted at an annual rate of 3.

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Economy Taking a Toll on Training, Studies Conclude
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