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New Research Shows Corporate Training Budgets Are Misaligned

Although 64% of Learning Executives Believe Informal Learning Approaches Have Higher Impact, More Than Two-Thirds of Corporate Training Budgets Are Spent on Traditional Formal Training

Oakland, CA – August 19, 2009 – Over the past year, corporate spending for training and development has declined by 11%, reflecting the across-the-board cuts most companies have had to take to weather the recession. However, new research finds that companies are not making best use of remaining training budget dollars. While two-thirds of training budgets continue to go to traditional and costly formal training programs, such as structured online courses and leader-led classes, 64% of business leaders believe it is informal learning programs which drive the greatest business value.

The misaligned spending leaves limited dollars for informal learning, such as coaching programs, knowledge sharing, social learning, and mentoring – all of which have significantly higher business value and are much more cost-efficient to employ. Research also shows that organizations which adopt informal learning generate higher operational business performance and also have greater adoption of training. These findings are detailed in the recent research study, High-Impact Learning Practices: An Operating Guide for the Modern Training Function, published by Bersin & Associates, a research and advisory firm specializing in enterprise learning and talent management.

“We believe the disconnect in spending is based on several primary factors,” said Josh Bersin, president. “Most learning organizations haven’t yet developed the skills required to fully implement and leverage the various types of informal learning.

“The shift from traditional training to informal learning requires organizations to retool and develop new skills, add new technologies, and reorganize resources. Our research shows that learning organizations with expertise and skills in areas such as knowledge management, information architecture, community management, and performance consulting outperform those still focused on traditional training solutions.”

“In order to stay relevant to business, learning organizations must make this shift as quickly and efficiently as possible. Yet, most learning organizations are just beginning to react and have a long way to go,” said David Mallon, primary analyst for the just-published study. “Learning organizations have to arm their staff with new skills, reprioritize investments, and educate business unit management. In many cases, they must change the very definition of learning within the enterprise.”

The Bersin & Associates study, which took more than 18 months to complete, is designed to provide training managers with a detailed guide to modernizing and transforming programs, practices, and tools. Based on 798 qualified surveys and almost 50 interviews, as well as survey and interview data from other recent research, High-Impact Learning Practices includes a wide range of valuable resources for HR and L&D professionals:

  • The Modern Enterprise Learning Index. This set of 10 indicators provides executives with a way to evaluate the readiness of their organizations to transition to the next-generation of corporate learning. The indicators focus on operational abilities, as well as on the outputs and relationships with business units served.
  • The Enterprise Learning Framework. This graphical tool illustrates how the elements of any learning initiative interrelate. Elements depicted (with examples) include learning programs, approaches, disciplines, tools and technologies, and culture. The framework is accompanied by a detailed discussion of the modern corporate learning architecture, guidelines for creating a well-defined and cost-efficient architecture, and real-world examples.
  • The Training Investment Model. A tool for prioritizing training investments and resources.

Readers will find case studies and examples of modern best practices from companies such as Symantec, Nationwide, Credit Suisse, Summa Health, British Telecom, Accenture, Bell Canada, and many more. The study also includes a special section on how to handle the most common obstacles to the shift toward informal learning, along with practical recommendations for addressing them.

The 300-plus page study, as well as a wide variety of tools, case studies, and advisory services, is available at no charge to all Bersin & Associates research members. Non-members can purchase the study for $995. Those interested in learning more can download an audio overview and complimentary executive summary.

About Bersin & Associates

Bersin & Associates is the only research and advisory firm focused solely on research in enterprise learning, talent management, and talent acquisition. The company’s WhatWorks® membership program offers actionable guidance, improves operational effectiveness, and delivers business impact to companies in all industry segments.

Bersin & Associates research members gain access to a comprehensive library of best practices, case studies, benchmarks, and in-depth market analyses designed to assist professionals in making fast and confident decisions. Members also have direct access to analysts and a wide range of tested tools and models to address both strategic and day-to-day challenges.

More than 5,000 organizations worldwide have used Bersin & Associates’ research and advisory services to guide talent and corporate learning strategies. Research areas include planning and strategy, learning programs and delivery, talent management, leadership development and succession planning, talent acquisition, technology and infrastructure, informal learning, social networking, measurement and analytics.

For more information, go to www.bersin.com or call 561 455 0622, extension 223.