US training organizations grew their spending by 12% in 2012 with similar growth rates expected in 2013.
This is the highest growth rate in the last 8 years.
Why the high growth? Companies realize that despite the high levels of unemployment in some locations, skills are hard to find. Jobs have become more specialized and even highly skilled professionals must continuously reinvent themselves. Plus, as recent research from McKinsey points out, educational institutions are not developing graduates who are immediately ready for work.
We have been studying the corporate training industry for over a decade, and it continues to change and evolve. Businesses spend more than $62 billion on training in the US alone, and more than 50% of all dollars go into technology, tools, coaching, and other "non-instructor led" solutions. (Globally we estimate the market at around $135 billion.)
The e-learning industry is over $2 billion and growing, but has changed dramatically. Today employees want their training to include video, games, and a whole next generation experience. Much of our research shows that modern best-practice research focuses heavily on the "learner experience," and is highly tailored to the working environment of the employee. Training for sales people, for example, is integrated with the CRM system. Training for new hires is often delivered on mobile devices or integrated into social networks.
The explosion of Massive Open Online Courses (MOOCs) is further expanding the market. Organizations like EdX, Coursera, Udemy, and Academic Partnerships are delivering free training and education materials (charging for academic credit), further expanding opportunities for corporate training.
High-Impact Organizations spend More
Most companies struggle to understand where and how to spend training dollars. Are you spending enough money on training? And is it being spent in the right way?
Our research shows that while underfunding training is a problem, the use of "average spending" benchmarks can be misleading. While the US "average" spending on corporate training is around $706 per year, actual spending levels vary from $200 to over $3,000 per year depending on industry. You, as a training leader, should benchmark yourself against similar organizations in your industry.
Retailers, which have high levels of turnover and employ lower wage workers, for example, spend less per employee but actually deliver more hours. Training is typically delivered by store managers and local programs, supplemented with many online programs. Professional services organizations (consulting firms, for example), spend as much as ten times retailers, and programs must include many hands-on exercises and activities to develop strong client management
Our research also shows that organizations with highly mature L&D functions (we call them High-Impact Learning Organizations) spend 34% more than others. This shows that spending more money on training pays off when it's done well.
Most organizations find it easy to cut the training budget. But over time these decisions reduce workforce productivity, and there's nothing more expensive than employees who do not have the skills to do their jobs well. And remember that training is also an engagement and retention tool: it brings people together into a common culture.
This is why we spend so much time advising companies on best-practices in organization, governance, technology, standards, and processes within L&D. A world-class training organization is truly a sight to behold. It adds huge amounts of value and creates sustainable competitive advantage.
It's exciting to see businesses invest in capability development again. This is a predictor of business confidence and future economic growth. And of course if you're in the workforce looking for a job, it means employers want to invest more in you.
To learn more, read the Corporate Learning Factbook or download the WhatWorks brief.
Add to del.icio.us Digg ThisDZone it!
Friday, August 02, 2013 04:49
Pingback from blogs.2elearning.com
The Next “Best Practices” for Corporate Soft Skills Training by Bryan Austin - Elearning! Magazine BLOG
Posted by blogs.2elearning.com
Tuesday, August 13, 2013 18:35
Pingback from techtings.co.uk
Paying attention? New online training tech keeps an eye on employees ← techtings
Posted by techtings.co.uk
Tuesday, August 13, 2013 18:44
Pingback from gigaom.com
Paying attention? New online training tech keeps an eye on employees — Tech News and Analysis
Posted by gigaom.com
Tuesday, August 13, 2013 19:05
Pingback from educationhelp24.com
Paying attention? New online training tech keeps an eye on employees | Education Help
Posted by educationhelp24.com
Tuesday, August 13, 2013 19:10
Pingback from thecapitals.com
The Capitalsâ„¢ – Capitalists' Magazine | è³‡æœ¬å®¶æœè¨˜ | Paying attention? New online training tech keeps an eye on employees
Posted by thecapitals.com
Tuesday, August 13, 2013 19:24
Pingback from 8ballbilliard.com
Paying attention? New online training tech keeps an eye on employees | 8ballbilliard
Posted by 8ballbilliard.com
Tuesday, August 13, 2013 19:44
Pingback from goeducation.net
Paying attention? New online training tech keeps an eye on employees | Go Education
Posted by goeducation.net
Tuesday, August 13, 2013 19:54
Pingback from distantlearningblog.com
Paying attention? New online training tech keeps an eye on employees | Distant Learning Blog
Posted by distantlearningblog.com
Tuesday, August 13, 2013 21:15
Pingback from topedublog.com
Paying attention? New online training tech keeps an eye on employees | topedublog.com
Posted by topedublog.com
Tuesday, August 13, 2013 22:04
Pingback from introeducation.com
Paying attention? New online training tech keeps an eye on employees | Intro Education
Posted by introeducation.com
Tuesday, August 13, 2013 23:16
Pingback from eduhelpguide.net
Paying attention? New online training tech keeps an eye on employees | Edu Help Guide
Posted by eduhelpguide.net
Wednesday, August 14, 2013 01:21
Pingback from onlinevideos.beststrategies.info
All About Online Videos » Blog Archive » Paying attention? New online training tech keeps an eye on employees
Posted by onlinevideos.beststrategies.info
Wednesday, August 14, 2013 03:41
Pingback from topuniversityintheworld.net
Paying attention? New online training tech keeps an eye on employees | Find the top university!
Posted by topuniversityintheworld.net
Wednesday, August 14, 2013 14:14
Pingback from homelearningadvice.com
Paying attention? New online training tech keeps an eye on employees | Get Your Higher Education At Home!
Posted by homelearningadvice.com
Wednesday, August 14, 2013 16:02
Pingback from learning-to-study.com
Paying attention? New online training tech keeps an eye on employees | Home learning advice
Posted by learning-to-study.com
Wednesday, August 14, 2013 20:11
Pingback from computers-solution.com
Having to pay attention? New online training tech keeps track of employees » computer solution
Posted by computers-solution.com
Saturday, September 07, 2013 00:11
Pingback from ardentlearning.com
Despite benefits, e-learning investments are lacking |
Posted by ardentlearning.com
Saturday, September 07, 2013 07:15
Pingback from 18.104.22.168
Despite benefits, e-learning investments are lacking |
Posted by 22.214.171.124
Monday, September 30, 2013 10:46
Just as the importance of training is recognized in US, it needs to be recognized in all countries where performance improvement is a priority. In fact the in house training of the employees must always be complemented by the trainers specializing in verbal communications.
Posted by Satish Kakri
Tuesday, October 15, 2013 21:13
Pingback from triciaboland.com
Tricia Boland » $2 Billion and Growing
Posted by triciaboland.com
Monday, March 10, 2014 13:40
Pingback from theindieconsultant.com
The â€œKnowing-Doingâ€ Gap - The Indie Consultant
Posted by theindieconsultant.com
Thursday, June 12, 2014 08:24
Pingback from infoscape.com
What The Growth Of Edtech Means For Your Business | infoscape.com
Posted by infoscape.com
Tuesday, June 17, 2014 11:57
Pingback from larryrhart.com
Continuous Learning Is Important for Leaders Too | Larry Hart
Posted by larryrhart.com
Thursday, February 19, 2015 17:08
Pingback from news.money.ca
Braidio Emerges From Stealth Mode, Launches Cloud-Based Platform for $135 Billion Talent Development Market*
Posted by news.money.ca
Josh Bersin writes on the ever-changing landscape of business-driven learning, HR and talent management.
His favorite topics include strategic talent management, creating high-impact learning organizations,
and how organizations drive business change and competitive advantage through talent strategy and technology.
We would like your feedback on our website. Please send comments, questions or report problems to us at:» firstname.lastname@example.org