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Companies Continue to Invest in Training –- and Evaluate the ROI

April 24, 2002
Related Topics: Behavioral Training, Basic Skills Training, Training Technology, Featured Article
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Spending on training and development will increase or stay the same for 2002,say 65 percent of the respondents to the Workforce 2002 HR Trends Survey. Why?The investment in good employees pays off.

Focused, well-placed training provides a return on investment (ROI). That’swhy 86 percent of respondents to the Workforce survey say they formally orinformally measure the ROI on training:

  • Informally measure or evaluate the ROI of training 47 percent
  • Formally measure the ROI of training 9 percent
  • Plan to more formally measure the ROI of training in the next 18 months 30 percent

What Are the Training Priorities?
Here is the training that HR is doing, according to the survey:

  • Leadership/Management Training 81 percent
  • Technical Training (e.g., computers, software) 73 percent
  • Custom-Designed Training for Specific Needs 69 percent
  • Teamwork and Team Problem-Solving 55 percent
  • Diversity Training 43 percent
  • Workplace Security/Safety Training 42 percent
  • Sexual Harassment Prevention 40 percent
  • Conflict Resolution Training 34 percent
  • Quality Control/Quality Management 25 percent
  • Basic Skills (e.g., math, reading) 15 percent
  • Other 26 percent

2002 Spending Is Increasing
Of the 65 percent of Workforce survey respondents who are increasing orkeeping their spending levels the same:

  • 38 percent are increasing their spending on training and development
  • 27 percent are keeping their spending on training and development the same

The 2002 spending follows on the heels of a strong 2001, according to thesurvey.

For 2001, 65 percent of those surveyed by Workforce kept or increased theirlevel of spending. Of those:

  • 10 percent increased their training budget based on need
  • 36 percent spent their training and development budgets as planned
  • 19 percent put training expenditures temporarily on hold and eventuallyspent them

Explains one respondent from a company with 500 to 2,499 employees, "Wehave experienced an increase in training responsibilities and our goals are nowtied into the company goals."

"In my company," says an HR professional from 100- to 499-person company,training "is growing and people are beginning to see the great need for moreknowledge."

Spending Responsibility for Training Involves the HR Department
Who has responsibility for training? In most organizations, HR is involvedand sometimes with overlapping responsibilities, according to results from theWorkforce survey.

In two-thirds of the organizations (or 68 percent), HR is involved intraining:

  • HR generalists manage training : 11 percent
  • Training specialists within the HR department manage training: 32 percent
  • Training specialists in a separate training department reporting to HRmanage training: 25 percent

In one-third of the organizations (34 percent), the training departments isseparate from HR, and in a quarter (26 percent) of the organizations some typesof training are managed outside of either HR or the training function.

What has happened to the training function in the last 18 months? Almost halfof the Workforce survey respondents (49 percent) report the status quo: nochange in the number of staff involved in training.

In some organizations, there’s been a change in the number of specializedtrainers. Almost a quarter (25 percent) report a decrease in the number ofspecialized trainers. Conversely, 19 percent report an increase in the number ofspecialized trainers.

E-Learning Training Technology Represents Cost Savings for Some
Anecdotally, some of those HR professionals surveyed saw technology ande-learning options as a way to save money.

"Our training department budget was severely diminished in 2001 resultingin video, web-conferencing and conference calls," said one respondent from anorganization in the 500-to-2,999 employee range.

Added another respondent from similar size organization: "We are leaningmore toward e-learning and less toward leader-led classes. We also placeemphasis on self-study and provide our employees with the materials needed tocomplete various self-study projects through our on-site library."

A respondent from an organization with 5,000 to 24,999 employee says, "Wehave concentrated more of our efforts on distance-based training and CBT[computer-based training] activities."

"We have seen the appetite for leader-led training fade," said an HRrespondent from a company with 5,000 to 24,999 employees. "We are convertingseveral courses to a Web-based format to save on coasts and reach a wideremployee base."

As with everything dot-com, training on the Internet works best as a part ofa mix of offerings. "We will employ a blended solution. There are times whenface-to-face is still best," said this same respondent.

A respondent in an organization with more than 25,000 employees says thecompany was doing "a transition toward a blended approach, i.e., traditionalplus e-learning to get further reach and larger volumes for similar dollars."

"We are also adopting an e-learning culture. Twenty (20) online courseslast year, 12-plus this year," said a respondent in a 100 to 499-employeeorganization.

Training Focuses on a Variety of Skills
The pending economic recovery will lag unless there are qualified employeesin place to make it happen, experts say. Now is the time to gear up, somerespondents said.

‘We are not ‘waiting’ around doing nothing. We are looking for ways toadd value by providing change management and workforce re-engagement/retentiontools and consulting," said one Workforce survey respondent.

  • Management/Leadership Training: As the Baby Boom generation begins toretire, HR needs to be prepared to fill these open management positions. Eightin 10 survey respondents said management and leadership training is targeted for2002.

    There are "more requests for leadership development and soft skillstraining," said a respondent from a company with more than 25,000 employees.There is an emphasis on "training the ‘whole person’ and a focus onrelationships, communications, self development."

  • Technical Training: 73 percent of the Workforce survey respondentsindicated that technical training will be provided by their organizations in2002.

    Technically skilled employees are needed in every industry. The lines areblurring between manual labor, technical skills and professional requirements.

  • Team & Problem-solving Training: 55 percent of those in the Workforcesurvey target teamwork and team problem-solving training. As companies look tore-engineer, the ideas and solutions will come from the workforce itself.

  • Custom-Designed Training: 69 percent plan to do custom-designed trainingfor specific needs, such as industry-specific skills or special organizationalneeds. Also, downsizing and succession planning make cross-training more vitalthan ever.

    "We are formally cross-training individuals in various production areas,"said one respondent from a 500 to 2,999-employee organization. "This was donesomewhat haphazardly before."

    The tragic events of Sept. 11 pointed out the reality of "suddensuccession." HR realized then, if it hadn’t before, that succession planningwas not a luxury, but a necessity and not just for a few key executives, but forall positions.

    Successful succession planning relies on skills assessment followed by skillstraining to ensure that the company is preparing and training its employeesadequately.

    "We are expecting many retirement between now and 2010," said onerespondent from a company of more than 25,000 employees. "Perhaps a third ofall people now in the organization will retire by then.

    "We will have to find ways to helping new people learn what the retireesknow. Formal training? Sure. But I expect that expert systems and knowledgemanagement will meet some of this need as well."

  • Diversity Training: Of those responding to the Workforce survey, 43 percentare planning to do diversity training.

  • Safety Training: HR continues to face OSHA requirements and internalsafety standards. That’s why 42 percent of the survey respondents indicatethey are planning to conduct workplace security/safety training.

  • Sexual Harassment Prevention: As the tensions and uncertainties of men andwomen together in the workplace continue to become more complex, the need forsexual harassment prevention training is cited by 40 percent of the companies.

    A respondent from a company with less than 100 employees noted an "increasedemphasis on prevention of harassment. When the economy is bad and layoffsprevail, there are more suits. Managers need to be trained on how to avoid andprevent employment litigation."

  • Conflict Resolution Training: There’s increased personal tension –tempers are shorter, nerves are frayed, and employees are suspicious. Thus,one-third of the survey respondents – or 34 percent – put conflictresolution training on their list for 2002. Employers need to head off issuesbefore they become significant problems.

Workforce Online, May 2002 -- Register Now!

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