I’m analyzing the latest Corporate Learning Factbook data, and like most economic news today, it’s pretty depressing. With the U.S. economy in a downward spiral, organizations are cutting training spending and staffing.

My phone interviews with training executives confirmed these findings. As one example, I talked with a large, global company that had cut over 20% of its training headcount. The remaining training personnel are now taking on a larger scope of responsibility. Rather than managing training for a single business unit, they now cover multiple business units. Of course, this means that they are delivering less training overall, but the programs they are delivering are higher value to the company.

Even if your training organization hasn’t come under the budget axe, you need to be vigilant about spending. The first step is measuring and tracking where your training dollars are going (a task that may be easier said than done.) The second step is assessing the value of these programs and initiatives – and eliminating those that are relatively low value to the company.

Scorecards are becoming a popular means for tracking costs and metrics. One pharmaceuticals company I interviewed has applied an exceptional level of rigor to monitoring costs through the use of scorecards. The L&D scorecard provides a monthly snapshot of talent, productivity, and financial metrics. Some of these metrics include the following:

• Total Voluntary Turnover (goal: <15%)
• Retention of High Performers (goal: 97%)
• Promotions (goal: 25% higher than prior year)
• Cost per Learning Activity (goal: <$7.00 per activity)
• Expense Reduction (goal: reduce expenses by 1.5%)
• Infrastructure Costs (technology, facilities) (goal: <45% of training budget)
• Total Training Spending as % of Company Revenue (goal: <.5%)
• Cost for New Hire Training (goal: <$250 per new hire)

At the beginning of the fiscal year, these metrics are reviewed by a group of executives and modified, as appropriate, based on budgets and financial planning. In addition, the group looks at past years’ data to understand the historical costs and metrics to determine achievable goals.

Then, each month, a member of the L&D group gathers data from the company’s LMS and ERP system to calculate the metrics and produce a report in the form of a scorecard. The typical green/yellow/red color codes are used to identify successes and areas requiring attention.

The company’s director of L&D stated that the scorecard has been an invaluable tool in helping stakeholders understand the costs associated with specific initiatives, and, as a result, the team has been able to reduce costs significantly in certain areas. As one example, the cost for new hire training at one time exceeded $300 per learner; now the costs are under $250 per learner. Monthly reporting ensures that the L&D organization continues to keep a watchful eye on spending and take prompt action on any problem areas.

This is something every training executive should look at seriously. With no economic recovery in sight, you may shortly be called upon to justify your training costs and impact to the company.

If your organization uses some type of scorecard for tracking key metrics that you would like to share with the other training professionals, please let us know by replying to this blog or emailing me at karen@bersin.com. We can all learn from each other’s successes. And if you want more ideas on how to control costs, read our recently published research report Global Learning & Talent Solutions:Best Practices across North America, Europe and Asia available at www.bersin.com.