Corporate training can invariably be split into two categories: internal and external. Clients have historically developed and implemented internal programs for corporate training that features induction, business process orientation and corporate procedures. However, clients outsource training where specific external skills or experience may be required. The balance between internal and external corporate training has shifted significantly towards external in recent times, as companies continue to downsize their human resource departments as part of their globalization strategy. Most large corporations now outsource approximately 80% of their entire corporate training requirements to specialist corporate training providers. This enables companies to benefit from a wide variety of specific knowledge, skills and experience, which would not otherwise be available to them.
The economic recovery is clearly here: spending on corporate training is soaring. The research is striking: US spending on corporate training grew by 15% during the last year to over USD$70 Billion in the US and over USD$130 Billion worldwide. This tremendous increase follows two years of accelerated spending in this area, illustrating how companies see tremendous skills gaps as we recover from the recession.
All of our research tells us that organizations today suffer from a skills supply chain challenge. Not only do more than 70% of organizations cite capability gaps as one of their top five challenges, but many companies also tell us that it takes 3-5 years to take a seasoned professional and make them fully productive.
A few key facts about corporate training spending:
As in prior years our research shows that the highest amount of spending on corporate training is management and leadership (35%). Our research shows that global leadership gaps continue to be the most pressing issues on the minds of business and HR leaders.
Companies which fall into our high performance categories spend significantly more on training than average. So companies that invest in a total corporate training strategy spend more per employee than those who are inconsistent. This really proves that corporate training investment is well worthwhile.
Our research demonstrates a significant growth in technology tools available now to train people. Global cloud servers, interactive software, video, online communication channels, and virtual learning are all growing rapidly as training tools. People still need formal classroom education, but this is now less than half the total hours people consume in training around the world. And among the highly advanced companies, as much as 18% of all training is now delivered through mobile devices.
We see significant growth in new virtual learning environments: many clients are extending their training budget to reach 3 times the audience through the use of easy to use training portals and virtual learning experiences. While most big companies still have a lot of work rationalizing their training spend, the adoption of technology in training has accelerated.
Among the many reasons people leave companies, one of the most prevalent is for a lack of opportunity. Our research clearly shows that organizations which invest more heavily in training, career development, and mobility outperform their peers in almost every industry. Management is one of the most important parts of any organization, and companies have to develop and support great leadership. Our research shows that people thrive through coaching, feedback, and opportunities to develop.
The business process market is also growing rapidly. We estimate that the market for business process improvement management systems is now over $2 billion and continues to be one of the fastest growing market segments within corporate training. This is exciting news. While skills gaps (we call it the “supply chain of skills”) continue to challenge companies, an increased investment in training is good for everyone: employees, businesses, and job seekers. This level of increase shows that businesses are aggressively expanding and companies need skilled workers to grow.
Today’s business climate is one of global skills gaps. New technology, shifting markets, and changing demographics mean that manufacturers, service providers, telecommunications companies, technology companies, healthcare providers, and many other industries succeed or fail by their skills. As companies globalize their businesses, the ability to build skills has become a deep competitive advantage.
The global economy may not be in full recovery, but the world of corporate training is. We believe this dramatic increase in spending demonstrates improved business confidence and the clear gaps in the workforce. Now is the time to revamp your corporate training organization, and Appleton Greene is here to help you.
Return on Investment
American businesses spend a staggering $125.9 billion on employee learning and development, according to the American Society of Training & Development’s industry report. While companies track every data point of an advertising campaign, they often ignore the return on investment with corporate training. While many companies collect data on the number of employees they train and the cost of training per person, most do not establish metrics that connect training sessions to the ultimate goals: improved sales, generating new customers and increased productivity.
Some say that the lack of performance measurement has more to do with the priorities of the training programs than anything else. Most trainers are focused on delivery of learning rather than on improved results. Nevertheless, these metrics matter a great deal to CEOs. In fact, 92 out of 96 Fortune 500 CEOs said that they are most interested in learning the business impact of their corporate training programs, but only 8% see that happening at their companies now. Companies that study returns on training investments end up improving their education programs and see the connection between corporate training and how it drives the bottom-line. If employers want engagement and commitment, they must invest in corporate training. Industry leaders create a culture of learning at their organization, which enables them to attract the best employees.
Appleton Greene & Co
All Appleton Greene programs incorporate knowledge transfer into tangible business processes. This is achieved by ensuring that project studies are all process-driven and that they enable employees to implement new business processes within local or international departments as an integral part of the program.
The consequence of this is that Appleton Greene programs all feature clear key performance indicators, which enable clients to monitor progress and program benefits easily.
Appleton Greene programs are also implemented over a sustainable period of time, enabling clients and their employees to implement each part of the business process before progressing onto the next stage. A typical program incorporating 24 daily workshops, would be implemented over a sustainable period of two years, equating to only one workshop each month, allowing ample time for successful implementation.
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