2014 Training Industry Report - Training Magazine [PDF]

2O14 TRAINING

INDUSTRY

REPORT ABOUT THIS STUDY Now in its 33rd year, The Industry Report is recognized as the training industry’s most trusted source of data on budgets, staffing, and programs. This year, the study was conducted by an outside research firm May-July 2014, when members from the Training magazine database were e-mailed an invitation to participate in an online survey. Only U.S.-based corporations and educational institutions with 100 or more employees were included in the analysis. Agencies of the state, local, and federal government were not included in the analysis. The data represents a cross-section of industries and company sizes.

28%

(100-999 employees)

Midsize

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SURVEY RESPONDENTS Small companies

Industrial Classifications Respondent profile by industry (weighted per Dun & Bradstreet).

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41%

(1,000-9,999 employees)

Large

31%

(10,000 or more employees)

Total respondents

998

About Survey Respondents: Note that the figures in this report are weighted by company size and industry according to a Dun & Bradstreet database available through Hoovers of U.S. companies. Since small companies dominate the U.S. market, in terms of sheer numbers, these organizations receive a heavier weighting, so that the data accurately reflects the U.S. market.

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NOVEMBER/DECEMBER 2014 training

tBSFNBOBHFSTPSBCPWFJOUIFPSHBOJ[BUJPO tBSFEFWFMPQFSTPSJOTUSVDUJPOBMEFTJHOFST tBSFNJEUPMPXMFWFM CBTFEPOUJUMFTFMFDUJPO BTTPDJBUFT tEFUFSNJOFUIFOFFEGPSQVSDIBTJOHQSPEVDUTBOETFSWJDFT tTFUUIFCVEHFU tNBOBHFSFRVFTUTGPSQSPQPTBMTCJET tSFDPNNFOEUIFQVSDIBTF tIBWFUIFmOBMQVSDIBTFEFDJTJPO

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TRAINING EXPENDITURES

Backed by an improving job market, a sharper focus on training to close skill gaps, and JODSFBTFENFSHFSTBOEBDRVJTJUJPOT activity leading to more midsize companies, total 2014 U.S. training expenditures—including payroll and spending on external products and services—jumped QFSDFOUUPCJMMJPO 5SBJOJOHQBZSPMMJODSFBTFE QFSDFOU GSPNCJMMJPOUP CJMMJPO XIJMFTQFOEJOHPO outside products and services rose QFSDFOUGSPNCJMMJPOUP CJMMJPO The training budget figure was calculated by projecting the average training budget to a weighted universe of companies, using a Dun & Bradstreet database available through Hoovers of U.S. organizations with more than 100 employees. It is interesting to note that although small companies have the smallest annual budgets, there are so many of them that they BDDPVOUGPSQFSDFOUPGUIFUPUBM budget for training expenditures.

Training Expenditures 2009-2014 "=B* 60

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DEFINITIONS Total training spending: All training-related expenditures for the year, including training budgets, technology spending, and staff salaries. Training staff payroll: The annual payroll for all staff personnel assigned to the training function. Outside products and services: Annual spending on external vendors and consultants, including all products, services, technologies, off-theshelf and custom content, and consulting services.

Average of Total Annual Budget Organization Type

&EVDBUJPO (PWFSONFOU.JMJUBSZ .BOVGBDUVSFS%JTUSJCVUPS /POQSPmU "TTPDJBUJPO 3FUBJM8IPMFTBMF 4FSWJDFT Avg. Across Sizes

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Large

Midsize

Small

Average

training NOVEMBER/DECEMBER 2014

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2014 TRAINING INDUSTRY REPORT TRAINING EXPENDITURES

Types of Training Products and Services Intended to Purchase Next Year 19%

Assessment & Analysis Testing

6%

Audience Response Systems

18%

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37%

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21%

Business Skills

23%

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33%

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20%

$POTVMUJOH

29%

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27%

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11%

Enterprise Learning Systems

8%

Games & Simulations

20%

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15%

Learning Management Systems

41%

Mobile Learning

23%

Online Learning Tools & Systems

44%

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17%

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27%

Talent Management Tools & Systems

18%

Training Management Administration

13%

Translation & Localization

7%

8FC

3% 0

10

Average training expenditures for large companies decreased TMJHIUMZGSPNNJMMJPOJOUPNJMMJPOJO XIJMFTNBMMDPNQBOJFTSFNBJOFECBTJDBMMZnBU JOWT JO

BOENJETJ[FDPNQBOJFT JODSFBTFEGSPNNJMMJPOUPNJMMJPO 4PNFQFSDFOUPGPSHBOJ[BUJPOTTBJEUIFZJODSFBTFETUBGG from the year before (up from 34 percent in 2013), while QFSDFOUTBJEUIFMFWFMSFNBJOFEUIFTBNF VQGSPN QFSDFOUJO 4PNFQFSDFOUTBJEJUXBTMPXFSWT percent in 2013. Large nonprofits and service organizations had the largest personnel costs. Across all organization types, larger companies spent about 10 times as much as midsize, and midsize companies spent about three times as much as small ones. The average payroll figure for large DPNQBOJFTXBTNJMMJPOGPSNJETJ[FPSHBOJ[BUJPOT JU

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30

40

50

XBT GPSTNBMMDPNQBOJFT JUXBT For those who reported an increase in their training staff, the average increase was four people, five less than in 2013. For those who reported a decrease in their staff, the average EFDSFBTFXBTQFPQMFVQGSPNMBTUZFBS 0UIFSUSBJOJOHFYQFOEJUVSFTSFCPVOEFEUIJTZFBSUP CJMMJPOGSPNCJMMJPOJO4VDIFYQFOEJUVSFT DBOJODMVEFUSBWFM USBJOJOHGBDJMJUJFT BOEFRVJQNFOU0O average, organizations spent 11 percent of their budget PS WT MBTUZFBS POMFBSOJOHUPPMT BOEUFDIOPMPHJFT-BSHFSFUBJMFSTXIPMFTBMFSTBOETNBMM education organizations spent the highest portion of their budgets on tools and technology (24 percent and 21 percent, respectively). Manufacturers across all sizes spent the greatest percentage of their budgets on training tools.

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Training Expenditures per Learner 2012-2014 Q Q; Q

$1,059 $881 $976

All Companies

$1,115 $1,092 $1,238

Small (100 to 999 employees)

Midsize (1,000 to 9,999 employees)

$1,104 $829 $819

Large (10,000 or

$864 $490

more employees)

$903 0

300

600

900

1,200

1,500

Hours of Training per Employee 2013-2014 Q; Q

37.5 40.7

All Companies Small (100 to 999

36.5

employees)

42.2

Midsize (1,000 to 9,999 employees)

38.8 41.6

Large (10,000 or

37.5 36.2

more employees) 0

10

20

30

40

-BSHFFEVDBUJPOPSHBOJ[BUJPOTBOETNBMMHPWFSONFOUNJMJUBSZ organizations spent the smallest percentage of their training budget on tools and technologies (1 percent and 4 percent, SFTQFDUJWFMZ -PPLJOHBIFBE UIFNPTUGSFRVFOUMZBOUJDJQBUFE purchases are online learning tools and systems (44 percent WTQFSDFOUMBTUZFBS BOEMFBSOJOHNBOBHFNFOUTZTUFNT QFSDFOUWTQFSDFOUMBTUZFBS 5IJTJTGPMMPXFECZ BVUIPSJOHUPPMTTZTUFNT QFSDFOUWTQFSDFOUMBTU year), classroom tools and systems (33 percent vs. 29 percent), and content development (29 percent vs. 30 percent last year). 0WFSBMM POBWFSBHF DPNQBOJFTTQFOUQFSMFBSOFS UIJTZFBSDPNQBSFEXJUIQFSMFBSOFSJO Manufacturers spent the most this year with an average PG 6OMJLFQBTUZFBST UIPVHI JUMPPLTMJLFMBSHF

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50

organizations have lost their edge on cost savings as midsize PSHBOJ[BUJPOTTQFOUMFTTUIBOMBSHFPOFTUIJTZFBS WT QFSMFBSOFS 0OBWFSBHF FNQMPZFFTSFDFJWFEIPVSTPGUSBJOJOH per year, three hours more than last year. In general, small companies tended to have more hours of training this year at 3FUBJMFSTXIPMFTBMFBOETFSWJDFTPSHBOJ[BUJPOTIBEUIF IJHIFTUBWFSBHFOVNCFSPGIPVSTPWFSBMM XJUIMBSHFSFUBJMFST wholesale organizations having the largest number of hours PGBOZPUIFSPSHBOJ[BUJPOUZQFPSTJ[F IPVST $PNQBOJFTDPOUJOVFEUPEFWPUFUIFCVMLPGUIFJSUSBJOJOH expenditures to training non-exempt employees (40 percent, down from 42 percent in 2013). Training for exempt nonNBOBHFSTEFDSFBTFEGSPNQFSDFOUUPQFSDFOUJO 2014.


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2014 TRAINING INDUSTRY REPORT TRAINING EXPENDITURES

Training Expenditure Allocations— Who Gets Trained?

Staff per 1,000 Learners

40%

40

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TRAINING BUDGET

What Happened to Your Training Budget This Year?

Budget status was almost evenly split, with 43 percent saying their training budget increased and 41 percent TBZJOHJUSFNBJOFEUIFTBNF4PNF percent reported a decrease in budget. Last year, 41 percent said their budget XFOUVQQFSDFOUTBJEJUSFNBJOFE UIFTBNFBOEQFSDFOUTBJEJUXFOU EPXO&EVDBUJPOBOEHPWFSONFOU military organizations showed the greatest tendency for training budget DVUT XIJMFSFUBJMFSTXIPMFTBMFSTBOE NBOVGBDUVSFSTEJTUSJCVUPSTTIPXFE the largest gains. Increases were not evenly distributed across organization sizes. Large companies (23 percent) showed more decreases than midsize (14 percent) and small (13 percent) companies. Most of the budget increases were NPEFTUMFTTUIBOQFSDFOU4PNF QFSDFOUTBXJODSFBTFTJOUIFUP QFSDFOUSBOHF XIJMFQFSDFOUPG organizations reported increases in the UPQFSDFOUSBOHF.PTUSFTQPOEFOUT .BOVGBDUVSFS%JTUSJCVUPS who reported an increase in their training budgets attributed it to the following reasons:

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Budget Change by Industry 9% 31% 13% 42% 45%

Services

t*ODSFBTFJOUIFTDPQFPGUIFJS USBJOJOHQSPHSBNT QFSDFOUWT percent last year) 3FUBJM8IPMFTBMF t"EEFEUSBJOJOHTUBGGBOENPSF MFBSOFSTTFSWFE QFSDFOUGPSCPUI vs. 49 percent and 40 percent, respectively last year) (PWFSONFOU.JMJUBSZ t1VSDIBTFEOFXUFDIOPMPHJFT FRVJQNFOU QFSDFOUWT percent last year)

13% 65% 22% 25% 42% 33% 28%

Education

Like last year, the majority (42 percent) of respondents reported budget EFDSFBTFTCFUXFFOBOEQFSDFOU Some 44 percent chose “other” as the reason for the decrease, citing “corporate mandate to cut expenses,” “LMS implemented,” “lowered priority by the organization,” and “Training department reorganized,” among others. This was followed by:

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60%

11% 61%

0% 0% Association 100% 22% Nonprofit

31% 47% 0

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2014 TRAINING INDUSTRY REPORT TRAINING BUDGETS

t4UBGGSFEVDUJPOT QFSDFOUEPXOGSPN How Much Did Your Training Budget Increase? QFSDFOU

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How Much Did Your Training Budget Decrease? 4+0 * 22%

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9%

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42%

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27% 0

10

20

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#0+0 * 0@

31%

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Why Did Your Budget Decrease? 40%

Reduced Training Staff Decreased Number of Learners Served Decreased Scope of Training Attended Fewer Outside Learning Events (conferences/seminars) Decreased Outside Trainer/Consultant Investment Budget Adjusted to Reflect Lower Costs Other

11% 22% 11% 18% 24% 44% 0

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2014 TRAINING INDUSTRY REPORT TRAINING BUDGETS

Projected Funding for Learning Areas Next Year Executive Development Management/Supervisory Training *OUFSQFSTPOBM4LJMMT FH DPNNVOJDBUJPO UFBNXPSL

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Onboarding

11%

60%

4%

26% 20%

6%

60%

15%

7%

61%

10%

7%

61%

20% 15%

3%

5%

63%

19%

4%

63% 20

40

16%

43%

72%

14%

13% 19%

6%

38

8%

17%

10% 58%

16%

0

25%

60%

4% 60

8%

19% 14%

80

100

Q 080*/C 0 Q4-,// #0 0*80*/C 0 Q8 **080*/C 0 Q4 T R A I N I N G D E L I V E RY Nearly 47 percent of training hours were delivered by a stand-and-deliver instructor in a classroom setting—up a bit from the 44 percent reported last year. tQFSDFOUPGIPVSTXFSFEFMJWFSFEXJUICMFOEFE MFBSOJOHUFDIOJRVFT VQBCJUGSPNQFSDFOUMBTUZFBS tQFSDFOUPGIPVSTXFSFEFMJWFSFEWJBPOMJOFPS DPNQVUFSCBTFEUFDIOPMPHJFT VQGSPNQFSDFOUMBTU ZFBS7JSUVBMDMBTTSPPN8FCDBTUBDDPVOUFEGPSOFBSMZ QFSDFOUPGIPVSTEFMJWFSFE EPXOGSPNQFSDFOUMBTU year. tQFSDFOUPGUSBJOJOHIPVSTXFSFEFMJWFSFEWJBNPCJMF

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Training Delivery Methods by Company Size 2014 Small UPFNQMPZFFT

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T R A I N I N G D E L I V E RY

learning management systems (LMSs), both with 74 percent. Last year, virtual held the lead at 78 percent, followed by LMSs with 74 percent. t3BQJEFMFBSOJOHUPPM QFSDFOU EPXOGSPNQFSDFOU last year) t"QQMJDBUJPOTJNVMBUJPOUPPM QFSDFOU EPXOGSPN percent)

methods (35.9 percent vs. an average of 26.5 percent for small and midsize companies). Mandatory or compliance training continued to be done mostly online, with 72 percent of organizations doing at least some of it online and 20 percent entirely online (down from 21 percent last year). Online training also often is used for desktop application training (56 percent, the same as last year) and IT/systems application training (54 percent, down from 58 percent last year). Online training was least used for executive development (40 percent had no online training for it), onboarding (35 percent had no online training for it), and interpersonal skills and customer service (31 percent had no online training for either one). Of the learning technologies presented, the most often used included:

The delivery methods least often used for training remained the same as last year: t1PEDBTUJOHBUQFSDFOU EPXOGSPNQFSDFOUMBTUZFBS

t-FBSOJOHDPOUFOUNBOBHFNFOUTZTUFN -$.4 BU percent (down from 26 percent) t0OMJOFQFSGPSNBODFTVQQPSU &144 PSLOPXMFEHF management system at 21 percent (down from 25 percent)

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Online Method Use for Types of Training &YFDVUJWF%FWFMPQNFOU Management/Supervisory Training

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2014 TRAINING INDUSTRY REPORT T R A I N I N G D E L I V E RY

Learning Technologies Current Usage4+0 * Podcasting Online Performance Support or Knowledge Management System Rapid E-Learning Tool (PowerPoint conversion tool) Application Simulation Tool Virtual Classroom/Webcasting/Video Broadcasting Learning Content Management System (LCMS) Learning Management System (LMS) Mobile Applications

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TRAINING OUTSOURCING

2014 saw a sizeable increase in the average expenditure GPSUSBJOJOHPVUTPVSDJOH VQGSPN JO -BSHFDPNQBOJFTPOBWFSBHFTQFOUNJMMJPOWT GPSNJETJ[FDPNQBOJFTBOE GPSTNBMM POFT"OBWFSBHFPGQFSDFOUPGUIFUPUBMUSBJOJOHCVEHFU was spent on outsourcing in 2014, the same as in 2013. On average, 29 percent of companies completely PVUTPVSDFE-.4PQFSBUJPOTIPTUJOH WTQFSDFOUMBTU year). Learner support, however, was mostly handled inIPVTF QFSDFOU -.4BENJOJTUSBUJPO QFSDFOU MBSHFMZ was handled in-house, as well. *OTUSVDUJPOGBDJMJUBUJPOXBTIBOEMFEBCPVUFRVBMMZJO house and outsourced. Across all the topic areas, large companies outsourced more than midsize ones, and midsize organizations outsourced more than small companies. This FGGFDUXBTNPTUTUSJLJOHGPSDVTUPNDPOUFOUEFWFMPQNFOU

QFSDFOUTPNFPSDPNQMFUFMZPVUTPVSDFEGPSMBSHFDPNQBOJFT QFSDFOUGPSNJETJ[FPOFTBOEQFSDFOUGPSTNBMM organizations. The level of outsourcing is expected to stay relatively steady JOTPNFQFSDFOUPGPSHBOJ[BUJPOTTBJEUIFZFYQFDU to stay the same in the outsourcing area. The percentage of companies expecting to decrease use (11 percent) is slightly higher than those expecting to use outsourcing more QFSDFOU 5IFSFBSFFYDFQUJPOTGPSJOEJWJEVBMGVODUJPOT though. In learner support, twice as many companies said they will be doing less than those that said they will be doing more. There aren’t many differences between the outsourcing changes by company size. One thing that stands out: Large companies will outsource less custom content development.

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