Results from the 2009 ASTD State of the Industry report reveal that workplace learning and performance have withstood the challenges of the difficult economy. Investment in employee learning and development remained steady through the end of 2008.
Although many organizations were forced to cut costs wherever possible, workplace learning and performance did not suffer significantly. Formal learning activities that fostered the acquisition of important knowledge and skills remained a fixture in the daily experiences of millions of professionals.
The 2009 State of the Industry report presents insightful, actionable findings on the strategic and operational activities of learning functions across the globe. This annual compendium provides a variety of data points against which organizations can benchmark their learning investments and practices. For learning executives and business leaders, obtaining accurate and actionable information about learning remains a critical aspect of sound decision making. The data in the current report includes responses from users of the WLP Scorecard, ASTD Benchmarking Forum organizations, and ASTD BEST Award winners. For more than a decade, ASTD's annual data collection has delivered timely results that communicate the value of learning.
Investment in learning remains stable
Despite the worst economic conditions in several decades, business leaders continued to allocate substantial resources to the learning functions in their organizations. ASTD estimates that U.S. organizations spent $134.07 billion (all values are in U.S. dollars) on employee learning and development in 2008. This amount reflects direct learning expenditures such as the learning function's staff salaries, administrative learning costs, and nonsalary delivery costs.
Nearly two-thirds of the U.S. total ($88.59 billion) was spent on the internal learning function, and the remainder ($45.48 billion) was allocated to external services. While many organizations were forced to cut expenses in all areas of the business, including training and development, others maintained a strong financial commitment to employee learning.
As the pressure to deal with global economic uncertainty mounted throughout 2008, organizations slightly reduced spending on learning on a per-employee basis. The average annual learning expenditure per employee fell from $1,110 in 2007 to $1,068 in 2008 - a decrease of 3.8 percent.
There were also drops in average spending per employee among the Forum organizations and the BEST Award winners. Trimming expenses was inevitable for most toward the end of 2008, but the reductions in workplace learning expenditures were not massive by any means. Of course, it will be interesting to see how the economy will affect spending on learning throughout 2009, because there was no clear rebound upon the publication date of this report.
A commitment to learning, continuing a trend from previous years, surfaced in the organizationwide benchmarking statistics tracked in the State of the Industry report. The consolidated figure for average learning expenditure as a percentage of payroll actually increased from 2.15 percent in 2007 to 2.24 percent in 2008. Although organizational payrolls have become more fluid in recent years, this metric has been very stable in ASTD's annual data. The percentage of learning expenditure relative to the organization's revenue has also been consistent in recent years. On average, direct learning expenditure accounted for 0.59 percent of revenue in 2008, up slightly from 0.56 percent in 2007.
Another consistent trend in recent annual data has involved outsourcing, or spending on external services such as consultants, workshops, and training sessions from outside providers. Since 2004, organizations have relied less on outsourcing each year. The average percentage of the learning budget allocated to external services was 22.0 percent in 2008, down from 25.2 percent the previous year.
Instead, organizations are relying on internal resources for their workplace learning and performance initiatives more than in the past. Many learning departments have become firmly established within organizations over the past two decades, often including a sophisticated management and operational plan. There is not a dire need to push out learning activities to external providers because the internal capability is often present.
Building a competent internal team of learning experts requires a solid commitment; the average percentage of learning expenditure dedicated to internal resources was 66.1 percent in 2008. Learning staff salaries account for the majority of internal expenses, as well as development and administrative costs. Although some organizations did reduce learning staff and then outsource, the general trend suggests that the economy has not yet affected the growing capacity of internal learning departments.
Efficient learning operations
Any cutbacks on resources for the learning function have had only minimal impact on 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 and delivery expenses.
Employees in the organizations surveyed accessed an average of 36.3 hours of formal learning content in 2008. Although the average dipped slightly from 2007, it still represents a meaningful amount of resources allocated to each employee for workplace learning and performance. Despite pressure to maximize work output in light of widespread financial strain, there is still an ongoing expectation for employees to participate in numerous learning activities each year.
Learning professionals successfully found ways to manage learning content while cutting costs in 2008. On average, there were 353 hours of formal learning content made available per WLP staff member. This figure was on the rise from 2007 and is close to the highest averages from prior years. Production gains were realized without breaking the bank; the consolidated average for cost per learning hour available decreased 8.0 percent, from $1,660 in 2007 to $1,528 in 2008.
Learning professionals were also able to facilitate consumption of formal content at a high rate again in 2008. The average number of hours used per learning staff member was 5,507, up slightly from 5,497 the previous year. Learning content usage was managed without incurring additional overhead. The consolidated average cost per learning hour used decreased 7.1 percent, from $56 in 2007 to $52 in 2008.
Learning professionals took on more responsibility in 2008 than in past years. After taking into account variations in the percentage of budgets spent on outsourcing, the average number of employees per learning staff member was 253 in 2008, up from 227 the previous year. This ratio indicates that the average learning department is serving a larger constituency than it did in the past. As internal capabilities have continued to advance, learning professionals have become more efficient in a constantly shifting business climate. The strained economy likely caused the loss of learning positions in some organizations, but the remaining learning professionals adapted and maintained volumes of work that were consistent with those from prior years.
No one needs to be reminded that both the private and public sectors are enduring some of the most difficult economic times in recent history. As the global economy began its downward spiral, learning professionals adapted and continued to deliver. Facing ongoing pressure to manage costs, they facilitated an impressive amount of learning and skills development for their organizations' workforces.
Although investment in workplace learning and performance was stable in 2008, organizations successfully contributed to their employees' development with more formal learning opportunities than in the past. Learning professionals also managed efficient operations with fewer resources and were still able to achieve positive outcomes.
In 2008, it was difficult to avoid the effects of the sputtering economy, but the learning profession was able to weather the early stages of the storm. Much of the success can be attributed to building a solid foundation for several decades. And, business leaders now understand that an ongoing financial and operational commitment is required to leverage human capital to the fullest, especially in difficult times.
As economic uncertainty persists, there is an opportunity for the learning function to play an important role in preparing for the recovery. Contemporary professionals are demanding as much learning content as they can get, and there are a host of new technologies available to deliver it to them formally and informally. The coming years will provide numerous opportunities for the learning profession to broaden its role within the workplace and set the stage for continued success. T+D