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Costs Continue to Drive Training Sessions to the Web

November 15, 2010

Recent television ads for Farmers Insurance Co. open with a long exterior shot of the University of Farmers complete with imposing stone gate and students scurrying across green lawns. Popular character actor J.K. Simmons of The Closer and Law and Order leads classes through deadpan discussions of coverage needed for various catastrophes.

Although Farmers chief learning officer Annette Thompson loves the idea of her corporate university as a competitive advantage, she admits the commercials are a spoof, right down to the stone buildings. In fact, employee learning and development at Agoura Hills, California-based Farmers takes place primarily online. In the past six years, the University of Farmers has reduced the share of classroom-based courses from 90 percent to less than 50 percent.

Online, informal, and social learning are increasingly part of the corporate training mix; their elements are often blended with traditional classroom sessions to create a lower-cost but often effective recipe for training. As a result, face-to-face learning has become rarer and is reserved for specialized, highly complex or contextual material.

“Twenty years ago, there was a trend toward bricks-and-mortar corporate universities,” says Stephen Burnett, professor of strategic management and associate dean of executive education at Northwestern University’s Kellogg School of Management. “Everyone wanted to emulate [GE’s] Crotonville [facility] until they found out what it cost.”

Belt-tightening during the recent recession seems to have fueled the trend. The percentage of learning hours delivered through technology at U.S. firms jumped to 36.5 percent in 2009 from 31.4 percent in 2008, according to research from the American Society for Training and Development professional group. The 2009 level was the highest since ASTD began tracking the statistic 14 years ago.

Costs spurred the move to online learning at Toshiba America Business Solutions Inc., says Terry Kristiansen, national education and development manager.

“Four years ago, our training delivery was trending more toward online. Two years ago, enter the new economy. All of a sudden, we had no money, no time and had to deliver training on the fly.”

How do companies decide what to move online? At Farmers, Thompson and her staff developed a simple formula.

“We decided that we would try to refrain from removing people from work just to impart knowledge, and that we would reserve instructor-led training for skill development,” says Art Dobrucki, director of learning strategy and performance at Farmers. Employees now generally pick up new information online.

Audience demographics and logistics inform delivery-channel decisions at Red Hat University, says Marc Ramos, director of the sales college at Red Hat Inc., a Raleigh, North Carolina-based software provider with 3,700 employees. “Context and business need are still the biggest drivers, but other considerations include scale—time, audience size, geography—as well as the level of compliance that’s required. E-learning is the most practical for assessment and tracking.”

It’s a similar story at Branch Banking and Trust Co., a Winston-Salem, North Carolina-based bank with 1,800 offices in 13 states and more than 30,000 employees. Three years ago, 86 percent of the training delivered at BB&T University was classroom-based. Now, it’s only 61 percent, says Debi Wayne, senior vice president.

BB&T still uses classrooms, but they may be virtual. Use of virtual instructor-led training at BB&T University has doubled in the past three years.

Its new Relationship Banker Fundamentals curriculum is an 18-day course combining self-study, self-directed online activities, contests, competitions and assessments with virtual, instructor-led sessions. The program, which is exclusively for BB&T employees, also includes a full day of role-playing and feedback.

“Participants do not meet with the instructor at all. The lack of a classroom structure gives us much more flexibility, and this program has had a huge impact,” Wayne says. Graduates of the virtual program outperformed graduates of the traditional classroom program in several key measures. Their overall sales were 15 percent higher.

Learner acceptance of online learning has been strong at many companies. “Sales managers are notoriously stingy with their time,” notes Toshiba’s Kristiansen. They are more likely to take advantage of learning that is available anytime, anywhere, he says.

Farmers measures its success through employee online learning engagements and tracks them quarterly. An engagement is defined as any completed learning activity; the average course length is 20 minutes. In 2009, engagements totaled 160,775. In 2010, that number is expected to top 208,000, Thompson says.

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