How Much Do Businesses Spend on Employee Training?
The most recent Training magazine survey of the United States training industry shows how much of a shift COVID-19 and the Great Resignation have had on training expenditures, budgets, and delivery methods.
The shift to virtual learning and leveraging training as an employee well-being and retention tool resulted in a nearly 12 percent increase in U.S. training expenditures to $92.3 billion in 2020-2021. According to the survey, the amount spent on training staff will increase to $68.7 billion in 2021, up from $42.4 billion in 2020.
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Training per Employee in the U.S.
The survey discovered that large companies with more than 10,000 employees and small companies with 100 to 999 employees spent less on training per employee in 2021 than in 2020. Spending by midsize businesses with 1,000 to 9,999 employees increased by more than 55%.
In terms of how much money they spend per employee, large companies spent $1,678 per learner in 2020, compared to $1,433 in 2021. Medium businesses spent $581 per learner in 2020, compared to $924 in 2021, and small businesses spent $924 per learner in 2020, compared to $722 in 2021.
Budgets for Training
When it concerns the overall employee training budgets, manufacturers, service organizations, retail/wholesale, and government/military organizations have mostly increased or maintained their budgets.
The survey found that for the companies that did increase their budgets, the majority increased their budgets by 6 to 15%. Only small businesses had a significant number of respondents who increased their budgets by more than 25%.
Training Delivery in the United States
Given the number of employees unable to travel to their offices or training facilities, it is no surprise that remote training has increased to 31%, up from 19% the previous year. While many people appreciated the convenience and benefits of online training, 56 percent of respondents said they intend to return to some classroom training while keeping some of the remote learning introduced during COVID-19.
In terms of delivery methods, small and medium-sized businesses used blended learning the most in 2021. Blended learning is the delivery of a course using a combination of methods such as instructor-led classroom, virtual classroom, or webcast where an instructor is in a distant location, and online or computer-based where no instructor is present.
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According to the survey, blended learning techniques were used to deliver 43 percent of hours, up from 33 percent the previous year.
- Virtual classroom/Webcasting accounted for 37% of delivered hours, while online or computer-based technologies accounted for 34% of delivered hours.
- An instructor delivered 30% of the training hours in a classroom setting.
- Surprisingly, 15% of respondents use blended learning exclusively or primarily.
Comparing with Responses in the UK
The Chartered Institute of Personnel and Development (CIPD) in the United Kingdom also conducts an annual survey that looks at current practices and trends in learning and development. According to the most recent (CIPD) survey, which was released in May 2021, 58 percent of respondents said their learning and development (L&D) budget remained constant, while 31 percent said their L&D budget decreased in the previous year. Only 11% of respondents reported a budget increase.
In aspects of headcount, 50 percent reported that their L&D headcount remained constant, 32 percent reported a decrease, and 18 percent reported an increase.
Learning Delivery in the UK
Based on the survey, 70% increased their use of digital learning solutions in the previous year, while 36% increased their investment in learning technologies.
Often these organizations agreed or strongly agreed that they were using learning technologies successfully and innovating in their use.
In contexts of modalities, 47 percent said they had organized or funded webinars or virtual classrooms in the previous 12 months; 41 percent offered digital e-learning or online courses; 35 percent used digital content, and 17 percent provided blended learning opportunities.
Even before looking at the digital technologies that organizations are currently using to support content delivery and collaboration within their workforce, webinars/virtual classrooms saw the most growth in 2021, increasing by 51 percent in 2021 compared to 36 percent in 2022.
Other digital technologies that are currently being utilized to support content delivery and workforce collaboration include:
- System for management learning (28 percent)
- Social education (28 percent)
- Programs for online education (23 percent)
- Coaching and mentoring are aided by digital tools (21 percent)
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Trying to take on L&D Challenges
The above surveys did not go into detail about the challenges that employees and L&D departments face with their learning programs. According to a recent Oracle survey of 600 people in the United States, the main training challenges include not enough time for training, not enough training, and training that isn’t relevant.
According to the study’s authors, the lack of relevant and tailored training can be explained in part by the time it takes an average L&D team to create one training course. According to their survey of 2,310 HR decision-makers who use a learning platform, the majority said it took a day or more to create one course, and many said it took a month or more!
A startling 51% did not use any learning platforms for course creation, which is both a disadvantage and an opportunity for L&D programs, regardless of industry or the size of the L&D team.
The authors also pointed out that employers were not providing enough training in ‘on the go’ format, such as a mobile app or a video that could be viewed on a smartphone. Offering bite-sized training chunks (i.e., microlearning) makes it easier for employees to find time to take courses or revisit content that they want to review again.
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