With L&D budgets on the decline, organizations are looking for the best ways to allocate their precious dollars. Naturally, more money is going to the "necessities" – mandatory or compliance programs, or training that is very job-specific. Fully 21% of training dollars are now going to profession or industry-specific training programs. For example, accountants need training on new actuarial and tax rules. Employees in a manufacturing plant need training on new processes and safety procedures. And health care workers need updates on new regulations and medical devices. These are must-have programs, and with budgets tightening, a bigger piece of the budgetary pie is now going to this category of training.

Meanwhile, companies are cutting back in a number of areas. They are carefully scrutinizing programs and eliminating those that are low value, generic, or under-utilized. In certain areas, they are revamping their programs so that more can be done with less. This is particularly true with leadership development programs. As many of you know, leadership training can be expensive. Most often, it is delivered in the classroom and many companies bring in outside facilitators or consultants for delivery.

To reduce costs for leadership programs, more organizations are using internal executives and leaders to teach courses. Not only does this save the expense of external instructors, it brings more company-specific experience and knowledge to the training, and helps to build social connections within the organization.

Another way companies are reducing costs is through blended learning approaches. Rather than offering a fully classroom-based program, companies are using online methods as well as coaching, mentoring, and on-the-job components in conjunction with ILT.

A good example of this is Banner Health, a large hospital delivery system in the Southwest. The organization offers a comprehensive leadership development program using a "70-20-10" delivery model – 70 percent experiential learning; 20 percent coaching and mentoring; and 10 percent formal classroom instruction.

The senior management of the organization is very involved in setting the program’s agenda. Senior managers participate extensively in the classroom instruction as well as in the coaching and mentoring exercises, using the "leader as teacher" model. The experiential component is comprised of on-the-job learning and action-learning projects, to reinforce classroom learning with real-world business problems and experiences.

This is one good example of how organizations can leverage internal resources in a blended learning approach to effectively deliver training, but at a lower cost. For more examples, read our papers Global Learning & Talent Solutions (available at our research library) or Corporate Learning Factbook: Healthcare Edition (to be published at the end of this month).