Downturn Prompts a Change in Learning Initiatives

Faced with shrinking budgets and deep cuts of their training staffs, companies in 2009 continue to scrutinize employee training offerings more carefully. Despite the short-term pain, this should help companies by strengthening their competitive positions once the economy brightens.

"A lot of good can come out of this recession if companies become more efficient by focusing on high-value learning programs. That's the silver lining in the clouds," says Karen O'Leonard, a principal analyst with Bersin & Associates and author of a recent report.

Gone are massive course libraries and unfettered open enrollment. They are being replaced with a more prescriptive approach that seeks to match high-potential employees with development initiatives that tackle strategic business issues. O'Leonard says companies are more selective about which employees will participate in development programs. Employees on average received 13 hours of formal training in 2009, down from 17.2 in 2008 and nearly half the 25 hours offered to employees two years ago.

On an optimistic note, it appears companies have begun preparing for life after recession. Leadership development consumed 24 percent of training dollars in 2009, an increase from 17 percent of training dollars in 2008. That indicates companies are beginning to look ahead and getting beyond the "crisis management" stage, O'Leonard says. Bersin estimates that approximately $10 billion is spent on leadership development annually.

Another good sign was the use of online training. Roughly one-third of formal learning was delivered online, up from 24 percent in 2008. Twenty percent of learning occurred via online self-study, up from 16 percent in 2008.

Meanwhile, companies slowly are adapting newer technologies for skills development. In 2009, 13 percent of formal training was delivered through "virtual" classrooms, including technology that enables instructors to present coursework using live remote broadcasts or video. By contrast, 8 percent of formal learning was delivered using virtual classrooms in 2008. The virtual tools can help companies better manage travel and associated costs.

Despite the uptick in online delivery, nearly 60 percent of employee learning took place in traditional instructor-led physical classrooms in 2009. That is down from 67 percent in 2008 but nonetheless remains the dominant training method, O'Leonard says.

Several learning technology trends also bear continued watching. O'Leonard says more and more companies are turning to collaborative online tools, particularly for project work and knowledge sharing across dispersed workforces. Sometimes known as rapid e-learning tools, the collaborative technologies enable subject-matter experts and other knowledgeable workers to produce learning material that can be easily shared and disseminated at relatively low cost. "Collaborative tools that facilitate learning have really taken off. It's the hottest thing in learning and development," O'Leonard says.

Wikis and blogs are gaining traction as learning tools, with each being used by 14 percent of the surveyed organizations. Similarly, nearly one-quarter of companies report using "communities of practice" to promote collaborative learning and knowledge sharing.

Many turned to outside vendors to supply their needs as they dispensed with in-house training staff. Nearly two-thirds of organizations used outside professionals for instruction, and 51 percent did so for course development.

Still, with economic conditions bleak for the near term, companies were selective about how they spent their available training dollars. Among small businesses, use of learning management systems fell to its lowest level since 2007 as revenue-constrained companies canceled service contracts. Conversely, nearly four in 10 large companies outsourced learning-support functions to compensate for staff cuts, representing a substantial increase from the 23 percent that outsourced those functions in 2008.

Source: Workforce Management Magazine, Garry Kranz, 11/2009