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ATD Reviews the State of Learning

Bob Little 

February 12, 2016

According to the latest annual State of the Industry Report from the Association for Talent Development (ATD), the average direct learning expenditure per employee increased by 1.7 percent in 2014. The number of learning hours used per employee also increased by more than two percent.

Compared with previous years, the “average” organization delivered a higher percentage of learning hours through technology. And it delivered a lower percentage via traditional live, instructor-led classroom programs.

The report, sponsored by Capella University and covering 336 organizations, stresses that it contains averaged data. It adds that different organizations face different circumstances and challenges, and that readers “should aim not to replicate the numbers provided in this report, but rather use the data as a benchmark so they can better understand their own learning expenditures and activities and those of their peers.”

Learning Expenditure

The report states that, in 2014, organizations spent an average of $1,229 on learning per employee. This represents an increase of some 1.7 percent from 2013, when the average was $1,208.

However, this figure disguises the economies of scale that large organizations can enjoy where learning delivery is concerned. Large organizations can often offer identical learning experiences – in terms of length and quality of program – at a lower per-employee cost than smaller organizations can.

Consequently, small organizations with fewer than 500 workers spent $1,716 on average per employee on L&D. Organizations with 500 to 9,999 employees spent $911, and large organizations, with 10,000 or more workers, spent $868. Compared with 2013 figures, small organizations saw their L&D expenditure fall by nine percent, while medium and large organizations experienced increases of nine and four percent, respectively.

Number of Learning Hours

Meanwhile, employees at large organizations engaged in 35.5 learning hours per year on average. This compares with 28.7 hours per employee at midsize organizations, and 33.8 hours in small organizations.

This produces an overall average figure of some 32.4 hours per employee – an increase on 2013’s 31.5 hours. So, the report reveals that there was an increase in both the average direct learning expenditure and the average number of learning hours per employee for the second year in a row.

It’s important to note that, where “learning hours” are concerned, the report doesn’t take account of any learning activities that take place informally, during “normal work activities.”

Industry and Economic Variations

Not surprisingly, there are differences between industries in terms of L&D activity. While software publishers spent $1,884 on average per employee on direct learning expenditure, management consulting firms spent $1,830, and manufacturing firms spent $745.

The increase in direct learning expenditure in 2014 outpaces the average inflation rate seen in advanced economies, of slightly under 1.4 percent. According to the International Monetary Fund, the inflation rate in emerging and developing economies over this period was 5.1 percent – but some 80 percent of the organizations in the survey are based in advanced economies.

The report states that “Economic conditions play a major role in determining organizations’ hiring patterns and revenues, which, in turn, influence spending on learning.” However, it also adds that “broad measures of economic activity do not tell the full story behind the expenditures and efficiencies statistics.”

It goes on to reveal that the overall cost per learning hour available fell to $1,752 from $1,798 in 2013. However, it makes the point that “new content, or content recently adapted for a new delivery method, often carries high costs per hour available because of upfront development expenses.”

In terms of the overall cost per learning hour used, the average was $84 – a rise of $10 compared with the 2013 figure, but still lower than the 2012 figure of $89. For the average organization, 60 percent of direct learning expenditure in 2014 went to internal services, 27 percent was spent on external services, and 13 percent went to tuition reimbursement. These are similar to the percentages from previous years, says the report.

The report explains the difference between the “hours available” and “hours used” as follows: a one-hour class offered twice a year, involving five employees each time, would mean that one hour was available, but ten hours were used.

It adds that the “reuse ratio” – the number of learning hours used per hour available – rose to 48.3 in 2014, which was higher than the values seen over the previous two years. The report’s authors conclude that these figures suggest organizations are now able to distribute content more effectively and efficiently to employees.

The three content areas with the largest shares of the learning portfolio are: managerial and supervisory, profession- or industry-specific, and mandatory and compliance. According to the report, these areas combine to make up 34 percent of all content. However, it adds that some areas are more heavily regulated than others, so there are sharp differences across industry groups.

Learning Delivery Methods

The report notes that 41 percent of learning hours were delivered using technology-based methods in 2014, compared with 38 percent in 2013. It is quick to point out, however, that the traditional instructor-led live face-to-face classroom was still the delivery mechanism for the majority of learning hours in 2014. It acknowledges, though, that this number has fallen compared with the previous year – and that this continues a trend identified in recent years.

Among the technology-based learning delivery methods, the report states that self-paced online learning accounted for 19 percent of the hours in 2014 – a rise of three percent compared with 2013 – while mobile learning accounted for only slightly over two percent of learning hours. Again, though, its authors note that, although this figure is still low, it represents an increase from 2013, when only 1.2 percent of hours were delivered via mobile devices.

In terms of the industries that favor mobile learning as a learning delivery mechanism, software publishers lead the way – delivering 10 percent of all their workers’ learning this way.

Employees at software publishers are also more likely to consume learning delivered using other technologies. On average 56 percent of learning hours within the software publishing sector were delivered via technology – while the average for manufacturing firms was 34 percent and, for oil, gas and utilities organizations, it was a mere 25 percent.

The full report (ISBN-10: 1-56286-986-8, ISBN-13: 978-1-56286-986-1, e-ISBN: 978-1-60728-169-6) can be purchased from ATD’s website or by calling +1 800.628.2783 or +1 703.683.8100.

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