Survey Says: Spending on Employee Development Rises Slightly

Today’s Advisor reports on the results of one major annual survey regarding employer expenditures on training year over year.

Employers continue to recognize the importance of investing in employee development, and instructor-led classroom training is still popular, according to a recent report.
The Association for Talent Development’s (ATD) 2014 State of the Industry report, which was released in December, found that, on average, employers spent $1,208 per employee on training and development initiatives during 2013, representing an increase of $13 from the average $1,195 spent per employee in 2012. The specific amount varies by company size and industry, according to the report.
“As the world’s economy continues to grow, developing the knowledge, skills, and abilities of the workforce plays a valuable role in organizations,” the ATD stated. “The report’s findings paint a stable and consistent picture of the talent development industry.”

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The most popular method of formal learning in 2013 was instructor-led classroom delivery. In fact, the survey found that the role of instructors remains strong—with close to 70 percent of training being led by an instructor. That includes nearly 55 percent of survey participants using instructor-led classroom training, more than 9 percent using instructor-led online training, and about 5 percent turning to instructor-led remote training, such as video and satellite.
In addition, the report found that 38 percent of training was technology-based. The top areas of training content were mandatory and compliance training (cited by 11.5 percent of respondents), managerial and supervisory training (also cited by 11.5 percent), profession- or industry-specific training (10.8 percent), and training on processes, procedures, and business practices (9.1 percent).

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Overall, surveyed organizations provided slightly more hours of training per learner—an average of 31.5 hours in 2013 compared to 30.3 hours in the previous year. On average, recipients of ATD’s BEST (Building talent, Enterprise-wide, Supported by the organization’s leaders, Thorough learning culture) Award provided 35.5 hours, but the ATD noted that that figure declined substantially from an all-time high of 57.7 hours per employee among BEST organizations in 2012. BEST Award recipients also spent more per employee on training and development initiatives in 2013 ($1,296) compared to the overall average of $1,208.
The ATD reported that direct expenditure as a percentage of profit increased from 5.9 percent to 7.5 percent in 2013 and that the average cost per learning hour dropped from $89 to $74. In addition, the study found that 63 percent of employers’ training expenditures were spent on internal services; 27 percent were spent on external services (e.g., outsourced activities); and 10 percent were attributable to tuition reimbursement.