Despite a “sputtering” economy in 2008, U.S. organizations managed to avoid disproportionate cuts to corporate learning functions. Cumulatively, business leaders budgeted $134.07 billion for employee training and development, a modest drop from 2007’s $134.39 billion.
The training profession was not immune, however, to economic weakness. Organizations scrambled to deliver roughly the same volume of learning despite having fewer learning professionals, making efficiency more important than ever.
Those are among notable findings of the 2009 State of the Industry Report, an annual study by the American Society for Training & Development in Alexandria, Virginia. It examined 2008 investments, practices and trends in formal learning at more than 300 large organizations, including Fortune 500 companies and government agencies.
The report suggests 2008 was a year of stark contrasts. Increased investment in learning was evident early in the year, even as unemployment began to creep upward.
“Most of the learning cuts occurred in late 2008, when the bottom fell out of the economy,” says Andrew Paradise, the ASTD research analyst who authored the report.
It is not entirely known how the training profession has fared thus far in 2009, but Paradise says the worst of the cutbacks may be over.
As a percentage of payrolls, learning expenditures shaded upward to 2.24 percent in 2008, compared with 2.15 percent in 2007, according to ASTD. Nearly two-thirds of the spending, or $88.59 billion, went to internal learning functions, including staff salaries, administration and delivery costs. The remaining $45.48 billion was spent on purchases of external learning services.
The faltering economy forced organizations to curtail learning expenditures, at least on a per-employee basis. On average, companies devoted $1,068 per employee to training in 2008—a one-year decline of nearly 4 percent. Fewer staffers also meant a higher number of employees served per professional. On average, there was one learning staff member for every 253 employees in 2008, up from 227 the previous year.
Still, employees of the surveyed organizations accessed about 36 hours of formal learning content. Although that was down from 37.4 hours, it nevertheless signifies the continuing value that organizations place on employee learning, even in lean times, Paradise says.
“We are still seeing a commitment to learning. Companies expected their employees to allocate nearly one full workweek during the past year to participate in numerous learning activities,” regardless of mounting economic worries, Paradise says.
The breakdown of learning content showed little deviation from the pattern of past years. Profession- and industry-specific content remained most in demand, accounting for 16 percent of available formal learning hours. That represents a two-point gain from 2007.
Training in information technology was next, at 11.5 percent of learning hours, with processes/business procedures, compliance and managerial/supervisory skills each claiming 10 percent of learning hours.
The report also contains somewhat of a surprise, although it is perhaps nothing more than a blip. In 2008, 31.8 percent of formal learning hours were delivered via e-learning methods. That’s down from 32.1 percent in 2007. E-learning had been increasing steadily for several consecutive years, but the dip probably reflects postponed upgrades of e-learning systems as companies retrenched, Paradise says.
In a corresponding move, instructor-led classroom training rebounded after falling off for two years, accounting for nearly two-thirds of all learning hours used or made available. Since costs associated with in-person sessions are mostly fixed around instructors’ fees, companies likely encouraged more employees to attend in an effort to break even on their investments, Paradise says.
The findings suggest the learning function continued to be a worthwhile investment at most organizations in 2008.
But, as Paradise puts it, “That begs the question: What happened in 2009?”
It will be a year before ASTD reports on its findings for 2009, but according to another research report, done by Bersin & Associates, U.S. corporate learning and development spending dropped 11 percent this year.