U.S. organizations spent $125.88 billion on employee learning and development last year.
The ASTD BEST Awards program recognizes organizations that demonstrate enterprise-wide success as a result of employee learning and development. The winners “get it”: They create, support, and champion learning opportunities for results and a learning culture. The ASTD BEST Awards program started in 2003. [note to facilitator: BEST organizations represent the cream of the crop when it comes to learning practices. They are leading enterprises so should be a good point of reference for benchmarking] To identify the characteristics of the BEST learning organizations, quantitative and qualitative data from the past ASTD BEST award-winning organizations were reanalyzed. Commonalities in their learning strategies, practices, and performance outcomes were identified. ASTD also compared the BEST Award winners with BMS and Forum organizations on a number of key indicators including expenditure and delivery methods. The BEST acronym stands for: B uilding talent E nterprise-wide S upported by the organization’s leaders fostering a T horough learning culture The 2010 award winners were: featured in the October issue of T+D magazine Podcasts and article reprints available at: http://www.astd.org/TD/Archives/2010/TOC/1010OctTOC.htm
This slide details the characteristics of the BEST organizations. (This slide provides a good opportunity for discussion and interaction with the audience. You may want to prompt them to talk about these characteristics and if the organizations they work for [or their clients] have some of these in common.) Investment: In general the BEST winner spend more, but many spend less than the norm. Measurement: The BEST winners demonstrate effectiveness by monitoring individual and organizational performance indicators and linking changes in performance to learning and non-training activities. The BEST winners demonstrate the efficiency of the learning organization by monitoring time, usage, and cost indicators and linking decreases to changes in the processes and practices of the learning function. Efficiency: The BEST maximize the efficiency of the learning function by balancing centralized and decentralized aspects of the learning function, internal process improvement, use of technology, and strategic outsourcing. Effectiveness: The BEST winners maximize the effectiveness of learning by aligning learning activities with business needs, and providing timely access to relevant learning opportunities. Alignment: The BEST have formal processes to align business strategies with learning and performance initiatives and priorities. The BEST winners map learning resources to competencies, individual development plans, jobs, and corporate goals. Learning Opportunities: The BEST winners provide a broad range of internal and external, formal, and work-based learning opportunities, including knowledge sharing systems, coaching, and conference attendance. C-Level Involvement: Most of the BEST winners have visible support from senior executives, and involve leaders as teachers. Non-training Solutions: The BEST devote a large portion of their resources to non-learning performance improvement activities particularly organizational development, process improvement, and talent management. These characteristics are also included on page 20 of the 2010 State of the Industry Report.
Before we dive into the data, let’s set context for the State of the Industry Report. No one needs to be reminded that we are going through some of the most difficult economic times in modern history. As the global economy began its downward spiral, workplace learning and performance adapted and continued to deliver. Facing constant pressure to closely manage costs, learning professionals persevered and facilitated an impressive amount of knowledge exchange for their colleagues. Although investment in workplace learning and performance was stable in 2009, organizations successfully contributed to their employees’ professional development. Learning professionals also managed efficient operations with greater reliance on technology-based learning. Results from the 2010 State of the Industry report reveal workplace learning and performance has withstood the challenges of the difficult economy. Investment in employee learning and development remained increased slightly through the end of 2009. Although many organizations were forced to cut costs wherever possible, workplace learning and performance did not suffer, relative to the smaller workforce size. Formal learning activities that fostered the acquisition of important knowledge and skills remained a fixture in the daily experiences of millions of professionals. After increasing steadily for five years, the average percentage of learning hours available via technology decreased slightly in 2008, but rebounded in 2009, reaching its highest level since ASTD began collecting data on the use of technology for this report fourteen years ago. Technology-based learning solutions have become popular for many reasons, such as centralization, flexibility, reach, and efficiency. Furthermore, the use of technology-based solutions for informal learning is occurring at an unprecedented rate. Evidence from other surveys indicate that professionals have incorporated e-learning for their own self-directed activities on a massive scale. Emerging technologies such as Web 2.0 are transforming the way that people communicate through secure information sharing, interoperability, and collaboration on networked platforms. Learning experts understand the power of the new technologies and have predicted a much more prominent role for them in the near future, for both formal and informal learning. Along those lines, ASTD estimates that U.S. organizations spent $125.88 billion on employee learning and development in 2009, with nearly two thirds ($78.61 billion) spent on the internal learning function, and the remainder ($47.27 billion) spent on external services. Any cutbacks on resources for the learning function have minimally impacted its output. Learners are able to consume learning content at high levels, and learning departments are still releasing and managing content in efficient ways. Furthermore, organizations are achieving these outcomes after reducing average production expenses. Employees in the organizations surveyed accessed an average of 31.9 hours of formal learning content in 2009. Although the number of hours of learning decreased, the amount of still demonstrates that organizations expect employees to allocate a meaningful amount of time to formal learning and development activities. Learning professionals successfully found ways to manage learning content while cutting costs in 2009. On average, there were 264 hours of formal learning content made available per learning staff member. This figure decreased from 2008 because learning functions were serving a smaller workforce. The consolidated average for cost per learning hour available decreased 8.5 percent from $1,528 in 2008 to $1,398 in 2009. Learning professionals were also able to facilitate consumption of formal content at a high rate again in 2009. The average number of hours used per learning staff member was 5,350, down slightly from 5,506 the previous year. Any questions or comments about the context for the report and what was just covered? Now we’ll dive into highlights of the data.
The data is presented in three slices against which workplace learning professionals can benchmark learning investments and practices in their organizations. Presented first, the consolidated responses include all of the organizations that submitted data for a particular year. Although the slides only look at data from 2004 onwards, the report includes data from 2002 to 2009. From 2001 to 2003, the consolidated responses include data from the ASTD Forum (Forum) and Benchmarking Service (BMS) samples. Starting with 2004, data from ASTD-BEST-Award-winning organizations was included. Consolidated data was not available for 2005 because of the transition of data collection to the new ASTD WLP Scorecard®, but the 2006 to 2009 data includes responses from WLP Scorecard® users, the Forum organizations, and the BEST Award winners. The first item we’ll look at – learning expenditure per employee – is the standard measure of the efficiency of the learning function. It’s the most fundamental and most widely-used benchmark by organizations. It’s best not to look at these numbers and think they are the “optimal scores,” but instead use them for benchmarking. For example, some companies may spend much more while some spend much less, and the investment may be just what that company should be doing – it’s very individualized. And, a lower-than-average expenditure does not necessarily mean bad, nor does it mean that the learning function is efficient. Similarly, a higher-than-average expenditure does not mean better, nor does it mean inefficient. In the face of economic uncertainty during 2009, many organizations revealed a continued dedication to workplace learning and development. Business leadership continued to dedicate substantial resources to employee learning. The average annual learning expenditure per employee for all companies surveyed increased from $1,068 in 2008 to $1,081 in 2009—an increase of 1.2 percent. Although overall spending on employee learning and development decreased slightly in 2009, on average, learning functions were serving a smaller workforce; therefore the annual learning expenditure per employee increased slightly. The data is showing us that leading enterprises are not afraid to allocate funds to learning even with troubling economic times. Despite pressure to trim expenses, business leaders still committed significant resources to the learning function. Additionally, this demonstrates the increasing value that organizations see with employee learning and development, and therefore treat l earning and development expenditures as key investments for organizations regardless of the economic climate. This is encouraging for the profession and emphasizes the value senior executives place on learning, especially during tough economic times.
The next measure we’ll look at – learning hours used per employee – is another standard measure of the learning function, and one that is widely benchmarked. Learning hours per employee is one measure of the volume of training that organizations provide to their employees each year. In 2009, the average number of learning hours used (i.e., received) was 31.9, down from 36.3 in 2008. Although the number of hours of learning decreased, the amount still demonstrates that organizations expect employees to allocate a meaningful amount of time to formal learning and development activities. The average number of learning hours used among BEST organizations increased in 2009, rising from 40.6 hours to 47.0 hours. Employees in Forum organizations used an average of 36.1 learning hours in 2009, down from 44.5 hours in 2008.
A helpful analogy: Making learning hours available is like books in a library. Using learning hours is like the number of times the books are checked out. The used ratio is larger than the available ratio because multiple employees can receive the same content that is provided. For example, if a 2-hour course is prepared, then the hours made available (or produced) is 2. If 7 people take the class, then the hours used is 7 x 2 = 14. The consolidated average number of learning hours used per learning staff member decreased in 2009. This metric indicates that on average, each organization had 5,350 learning hours used by employees for each learning professional on staff. This is due to employees The ratio of learning hours used per learning staff member was even larger among Forum organizations at 7,514 to 1. For the BEST Award-winning organizations, the average number of hours used per learning staff member was 6,793 in 2008, the highest value on record. Although some of these results decreased in 2009, they demonstrate that the average learning staff member contributed to an operation where employees consume a substantial number of learning hours each year. There was also a reduction in the availability and output of learning content. The production of learning content decreased in 2009 for all the groups surveyed. The average number of hours made available per learning staff member in the consolidated sample was 264 in 2009, down from 353 in 2008. After a sharp increase in 2008, Forum organizations’ learning hours made available per learning staff member decreased to 333 in 2009, down from 396 in 2008. For the BEST Award-winning organizations, the average number of hours made available per learning staff member was 288 in 2009, down from 349 in 2008. This overall decline suggests that the economic downturn led organizations to scale back the amount of learning content they created. Although there were decreases in some of the metrics in 2009, they results still indicate that the average learning staff member contributes to an operation where employees consume a substantial amount of learning content each year.
The State of the Industry report provides a glimpse of how much e-learning is actually occurring in organizations. After increasing steadily for five years, the average percentage of learning hours available via technology decreased slightly in 2008, but rebounded in 2009, reaching 36.5 percent, its highest level since ASTD began collecting data on the use of technology for this report fourteen years ago. Technology-based delivery methods also accounted for a larger share of formal learning hours made available in BEST organizations (34.2 percent). While Forum organization’s bucked the trend and saw a decrease in 2009, from 34.1 percent to 32.5 percent.
Let’s take a closer look at the specific methods of technology-based delivery. Self-paced online learning increased in 2009 and continues to be the most frequently provided type of e-learning for all groups. The average for self-paced online delivery for the consolidated sample was 22.1 percent in 2009. Forum members relied on self-paced online delivery more than other organizations surveyed: 26.3 percent in 2009, up from 25.2 percent in 2008. BEST Award winners (20.6 percent) and Forum organizations (26.3 percent) relied on self-paced online delivery to similar extents as other organizations surveyed. None of the other e-learning delivery methods displayed much variation from the previous year. These findings indicate that organizations remain committed to implementing and sustaining e-learning platforms that are accessed and controlled by the learner. Self-paced online reflects learning that is happening at the workstation/workplace. This is also pointing to the fact that learning is not a discrete event, but a distributed event that happens at work and at the pace of the worker . Examples of self-paced non-network include CD’s or podcasts—anything not interacting with a network during the training. Examples of instructor-led remote include video classes that are not delivered through a computer network or an instructor-led session done via conference call. Examples of instructor-led online include webcasts and training sessions conducted via the web. Examples of non-computer technology include books and paper manuals.
Here’s another important slide. Everyone always wants to know: how much does it cost to produce one hour of learning? This is one of the most fundamental metrics in the learning and development field. Every learning professional needs to know this in their organization and be able to communicate the information to executives outside of the learning function. These numbers refer to the cost of providing learning content through a variety of means including classes, workshops, seminars, online courses, video, and print. Despite the rising costs for learning content usage, the cost of making learning content available to employees decreased compared to 2008. The consolidated average for cost per learning hour available decreased 8.5 percent, from $1,528 in 2008 to $1,398 in 2009. Likewise, the average cost per learning hour made available for 2010 BEST Award-winning organizations was $1,140, the lowest figure on record. However, Forum organizations actually experienced an increase in average cost per learning hour available. The 2009 figure for Forum organizations was $1,675 was an increase from the 2008 average of $1,445. These findings indicate that many organizations found ways to control costs associated with learning content production and consumption in the face of economic difficulty.
Now that we’ve looked at cost per learning hour received and cost per learning hour provided, we’re ready to talk a very important metric – the reuse ratio. It shows us the degree to which learning content is being used over & over again by an organization. The average reuse ratio for 2008 was 59.4 (indicating that on average each hour of learning content was being used 59.4 times). Although the reuse ratio decreased slightly in 2009 to 56.3, it was much higher than the 2007 pre-recession average of 44.8. The overall rise in the reuse ratio shows that learning functions have been making significant strides in operational efficiencies with e-learning, and they are creating more widely applicable content. Learning functions have been making significant strides in operational efficiencies that have allowed for much higher degrees of content reuse than just a few years ago. In fact, Forum organizations had a higher average reuse ratio in 2009, at 43.3, than in 2008. On the other hand, BEST Award-winning organizations reported a decline in average reuse ratio, falling from 65.1 in 2008 to 43.3 in 2009. What is this data telling us? It’s more evidence of the efficiency in the learning function aided by BOTH technology and better management of the learning function.
The recession led to minor fluctuations in the distribution of formal learning content by topic area. The content mix remained virtually the same in 2009 compared to recent years. Most organizations focused on providing learning content that was critical to managing their talent and to executing the strategies of their business, and the content mix from 2009 reflected that focus. Profession- or industry-specific content continued to be the most-needed, accounting for 17.2 percent of formal learning hours made available. Managerial and supervisory training was the second-largest content area in 2009, at 10.4 percent of the total amount of learning made available. Despite a slight decrease in the percentage of technology-orientated learning content, the IT and systems category accounted for 9.3 percent of formal learning hours made available. Other content areas which organizations provided substantial amounts in 2009 include: Processes, procedures, and business practices (9.2 percent) and mandatory and compliance training (7.8 percent). The top three content areas accounting for 38 percent of learning content made available in 2009 were (Consolidated content coverage). - profession- or industry-specific content - managerial and supervisory training - IT and systems skills. The three areas for which the least content was provided were - executive development - basic skills - sales. These proportions are based on the types of materials consumed, not the money spent. (Note to facilitator: Other could refer to ad-hoc training, one-time compliance training, new product orientation, quality testing, etc.) What’s important to note about this slide is that both specialized and general content are getting the largest amounts of attention … large numbers of employees need both kinds of content to ramp-up for their jobs.
Conclusions: Even in the midst of a very challenging economic climate, organizations sustained their investment in learning demonstrating the increasing value to organizations of employee learning and development. This change is noteworthy as learning and development expenditures are treated as key investments for organizations regardless of the economic climate. This is encouraging for the profession and emphasizes the value senior executives place on learning, especially during tough economic times. Although learning functions had to manage costs and adapt in many cases to smaller budgets, they continued to receive support in 2009, one of the most challenging years for organizations in over a decade. Executives and business leaders demonstrated through their learning investments that employee learning and development is key to survival, recovery, and future growth.
San diego State of Industry presentation
State of the Industry: The Local Economy & Employment Trends Presented by: Dr. Kella B. Price, SPHR, CPLP National Advisors for Chapters, ASTD CEO, HR and Training Consultant, Price Consulting Group www.thepriceconsultinggroup.com 252.622.8119 Are you tweeting this presentation? @ASTDSanDiego #ASTD #ASTDchapters
Topics of discussion <ul><li>Trends as reported in the 2010 State of the Industry Report </li></ul><ul><li>ASTD Forum and BEST Award Winners: showcasing ways to build talent </li></ul><ul><li>Learning expenditures, and training hours delivered </li></ul><ul><li>How does technology impact learning? </li></ul>
ASTD BEST Award Winners <ul><ul><li>Podcasts and article reprints available at: </li></ul></ul><ul><ul><li>http://tinyurl.com/ASTDBEST2010 </li></ul></ul>
Characteristics of the BEST Investment Alignment Measurement Learning Opportunities Efficiency C-Level Involvement Effectiveness Non-training Solutions
Context of the 2010 Report <ul><li>Estimated $125.88 billion spent by U.S. organizations on employee learning and development annually </li></ul><ul><ul><li>$78.61 billion on internal learning function </li></ul></ul><ul><ul><li>$47.27 billion on external services </li></ul></ul><ul><li>Positive trends included continued financial commitment to the learning function and increased use of technology-based learning </li></ul><ul><li>Success in managing learning while controlling costs per-learning hour </li></ul>
Learning Expenditure per Employee * Fig. 1 on p. 8 of SOIR * Amount in U.S. Dollars
Learning Hours Used per Employee Fig. 2 on p. 8 of SOIR
Learning Hours Available and Used per WLP Staff Member (Consolidated) Fig. 8 & 9 on p. 10 of SOIR
Percent of Learning Hours Provided via Technology (Consolidated) Fig. 14 on p. 17 of SOIR
Percentage of Formal Learning Hours Available Via E-Learning Delivery (Consolidated) Table 4 on p. 15 of SOIR How does your organization compare to the trends represented here?
Cost per Learning Hour Available * Fig. 11 on p. 11 of SOIR * Amount in U.S. Dollars
Reuse Ratio * Fig. 12 on p. 11 of SOIR * Ratio of learning hours used to learning hours available How can you increase the reuse ratio in your organization?
Distribution of Learning Content by Content Area Fig. 13 on p. 14 of SOIR
For more on ASTD Research: www.astd.org/content/research
Thank you! What are your questions? Presented by: Dr. Kella B. Price, SPHR, CPLP National Advisors for Chapters, ASTD CEO, HR and Training Consultant, Price Consulting Group www.thepriceconsultinggroup.com 252.622.8119