Magazine article Talent Development

Commitment to Learning Continues: Despite the Increasing Use of Technology to Deliver Training, There's Still a High Use of Traditional Classroom-Based Training across Organizations

Magazine article Talent Development

Commitment to Learning Continues: Despite the Increasing Use of Technology to Deliver Training, There's Still a High Use of Traditional Classroom-Based Training across Organizations

Article excerpt

The Association for Talent Development's 2015 State of the Industry report found that organizations continued to show their commitment to talent development in 2014, making healthy investments in learning programs. A total of 336 organizations across a wide range of industries and locations submitted their efficiencies and expenditures data.

Spending per employee continues to rise

On average, organizations had a direct learning expenditure of $1,229 per employee, according to the 2015 report, which is sponsored by Capella University. This represents a slightly more than 1.7 percent increase from 2013, when the average spent per employee was $1,208. The average number of learning hours used per employee also saw an upward shift, reaching 32.4 hours in 2014 compared with 31.5 hours in 2013. This is the second year in a row that an increase has been seen in both the average direct learning expenditure and the average number of learning hours used per employee (see Figure 1).

Confirming organizations' commitment to spending on learning activities, the increase in direct learning expenditure outpaces the average inflation rate of slightly below 1.4 percent calculated by the International Monetary Fund (IMF) for advanced economies in 2014. Of the participating organizations, eight in 10 were headquartered in advanced economies. In emerging and developing economies, the inflation rate was 5.1 percent.

Economic conditions play a major role in determining organizations' hiring patterns and revenues, which in turn influence spending on learning. In 2014, the United States and Canada saw healthy growth, accompanied by improvement in labor markets. However, IMF data show that growth was weaker than expected in Europe and modest in Latin America. Investments in China also slowed, and Japan's economy saw no growth.

However, broad measures of economic activity do not tell the full story behind the expenditures and efficiencies statistics. The 2015 ATD report Global Trends in Talent Development found that closing skills gaps was one of the top priorities for talent development functions across all countries. A skills gap occurs when there is a mismatch between the skills of the workforce (which comprises both the employed and job seekers) and the skills an organization demands. One way organizations may attempt to address skills gaps is by investing in the skills, knowledge, and abilities of their employees.

Learning efficiencies

The commitment to investment in learning in 2014 was coupled with efficient distribution of learning content to employees. The cost per learning hour available across all organizations was $1,752, down from $1,798 in 2013. However, the cost per hour available ranged from $1,398 to $1,660 in the years between 2007 and 2011, so investment in 2014 in each hour of learning was still relatively high. New content, or content recently adapted for a new delivery method, often carries high costs per hour available because of up-front development expenditures.

The average cost per learning hour used (if a one-hour class was offered twice a year and five employees took the class each time, then one hour was available, but 10 hours were used) was $84, up from 2013's value of $74, but lower than the $89 average in 2012 and the $85 average in 2011. The reuse ratio, or the number of learning hours used per hour available, rose to 48.3 in 2014, higher than the values seen in the previous two years.

Together, these figures suggest that organizations are able to distribute content and offerings effectively and efficiently to employees.

The extent to which organizations outsource learning activities remained steady. In 2014, for the average organization, 27 percent of direct learning expenditure went to outsourced or external activities (which include consulting services, external content development and licenses, and workshops and training programs delivered by external providers), similar to previous years. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.