Study Reports 12% Increase in Training Spending by US Companies Last Year, But Can Companies Keep Up the Pace?

A new study released last week shows an increase in spending on training in 2012 by US companies.  The study, by Bersin by Deloitte, reported that learning and development spending rose 12 percent on average last year.

According a press release by Bersin, the research is based on a study of more than 300 training organizations, representing a broad cross-section of company sizes and industries.  The technology and manufacturing industries showed the biggest budgetary gains – both sectors showed 20 percent upticks in training spending.  These significant investments are each backed by strong rationales.  Technology is a high-growth, fast paced arena that demands almost constant change.  U.S. manufacturing is undergoing major shifts to remain competitive at a global level.

Karen O’Leonard, lead analyst, benchmarking at Bersin by Deloitte, said that “as the pace of innovation accelerates, and companies look to expand their operations, employees should acquire more specialized skills and adapt to a workplace that grows more transient, mobile and self-serving…Modern learning organizations embracing these changes by rethinking how they operate to closely align with business need.  For U.S. organizations, that means committing to more dollars to develop internal talent and to build the desired skills for competitive advantage.”

The news here is encouraging, and at the same time not surprising.  As the economy has slowly improved, and with technology always developing at a breathtaking pace, businesses are always looking to train new employees, and reskill their veteran employees.  And there is a clear recognition of the importance of learning in overall company efficiency and success, as evidenced by the increasing amount of money spent.  The companies – correctly so – realize that good, well-funded training directly contributes to their present and future competitiveness and growth. So that’s a great sign.

Yet I also could not help to wonder – is there a tipping point somewhere?   The press release notes that “although many training teams added staff during the year, these additions were outpaced by faster growth in learning populations.” In other words, companies are hiring more workers than trainers have traditionally been assigned to.  And this isn’t mentioning the retraining of existing employees, as an organization will adopt new software, or their activities evolve, a reality in today’s rapidly changing workplace environment.  So traditional training models cannot realistically keep up.  The supply (trainers) likely will not be able to keep up with the demand for constant training and retraining.

Bersin notes the “changing role of the L&D function…which is [now] to facilitate and enable learning.” That’s true.  Yet I think in the coming years, companies will increasingly look for more innovative and less traditional training models, like social learning as one example, in order to reduce costs.

One of the keys is that training managers shouldn’t look at training as the start of something new, but rather look for ways to enable employees to constantly be able to train themselves, as they continue to work.  It’s not a process of 1) hiring a new employee, 2) orientation and training period and 3) work at full speed.  It’s an adjusted cycle of giving an employee the necessary ability to be able to answer their own questions and to complete the necessary task as they continue to work on a daily basis.  Training as part of their normal routine.  There are many ways to do this, including implementing onscreen intuitive instructions (like WalkMe, for example), encouraging employees to be active in social learning forums, gamification techniques, and so on.

Overall, I think the news of increased spending on training is encouraging, yet companies will surely look for ways to continue to give have high-skilled workers in the future, while managing their training budgets.

What do you think?

Jason Silberman
Jason is the former Lead Author & Editor of TrainingStation Blog
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