Despite current economic challenges, senior executives
continue to invest in developing their employees and understand
that a highly skilled workforce is a strategic differentiator. Data
from more than 400 organizations across all major industries
demonstrate that learning and development is critical to drive
growth and sustain a competitive advantage.
The findings of ASTD's 2011 State of the Industry Report show that
organizations are just as committed as ever to learning and
development (L&D). ASTD estimates that U.S. organizations spent
about $171.5 billion on employee L&D in 2010. This amount
includes direct learning expenditures such as the learning
functions staff salaries, administrative learning costs, and
nonsalary delivery costs. Sixty percent ($103 billion) of total
expenditures were spent on internal expenses and the remaining 40
percent ($68.5 billion) contributed to external expenses.
The 2011 State of the Industry Report data from more than 400
responding organizations across all major industries show that,
overall, organizations continue to be committed to the delivery of
knowledge and the development of employees at every level. As
evidence, they're investing more in learning and development per
employee, maintaining the same number of learning hours, and
increasing their expenditure on tuition reimbursement.
Efficiencies and expenditures
Financial commitment to learning remained strong as evidenced by
increased direct expenditure per employee. The average direct
expenditure per employee increased from $1,081 ($1,098 inflation
adjusted) in 2009 to $1,228 in 2010. Overall, that represents
nearly a 13 percent (11.83 percent inflation adjusted) increase in
the amount spent per employee on L&D activities and
infrastructure. This year's average expenditure represents the
largest consolidated direct expenditure per employee since ASTD
began collecting the data.
Despite the fact that the direct expenditure per employee increased
in 2010, learning hours used per employee remained stable in 2010
at 32 hours of formal learning content delivered per
employee—revealing that organizations paid more for each hour of
learning content used per employee. BEST Award winners historically
deliver more learning content to employees than the organizations
in the consolidated sample. The 2011 BEST organizations—comprised of
this year's 32 BEST Award winners—delivered 24 more hours than the
consolidated group, and registered the highest average volume of
learning hours (56 hours per employee) since ASTD began collecting data
for this group. The previous high average volume of learning hours
was 47 hours in 2009, also achieved by the BEST group.
The direct expenditure on learning as a percentage of payroll has
remained stable in recent years, and 2010 was no exception. For the
consolidated group, this measure increased from 2.2 percent in 2009
to 2.7 percent in 2010. The BEST organizations average direct
expenditure as a percentage of payroll increased by more than 1
percent, from 2.2 percent in 2009 to 3.3 percent in 2010.
Although the learning hours used by organizations remained stable
in 2010, the associated cost per learning hour used increased by
14.2 percent, from $63 in 2009 to nearly $72 in 2010. In addition,
the cost per learning hour available increased by 1.2 percent, from
$1,399 in 2009 to $1,415 in 2010. The third data set—Fortune Global
500 companies (G500)—registered the lowest costs for these measures
at $35 per learning hour used and $1,206 per learning hour
available. The low costs for the G500 are primarily influenced by
economy of scale and efficiency factors. They also commit a larger
percentage of their L&D budgets to external services and have
fewer L&D staff members per employee.
The reuse ratio—which refers to the ratio of learning hours consumed
to the learning hours produced—dropped by 6 percent, from 56.3 hours
in 2009 to 52.9 hours in 2010, meaning that each hour of content
was delivered fewer times. The reuse ratio describes the reach of
learning programs or the degree to which the learning function can,
in the words of one learning executive, develop once/deploy
everywhere. Although it is declining, the reuse ratio is above the
45.7 consolidate average over time.
Learning hours used per learning staff member decreased by 20
percent, while the hours available decreased by more than 7
percent—indicating overall decreases in the delivery and consumption
of learning content for the year.
Driven by an organization's learning function, the training
delivered annually evolves to meet the dynamic needs of the
organization and its employees. Prioritizing the learning content
topics, the volume of delivery, and the methods with which content
is delivered can be driven by several factors, including the
organization's size, industry, budget, and strategic learning
objectives, among others.
In the report, 12 content areas are identified. The leading content
area for the consolidated group is management and supervisory
learning. Manager and supervisory content also registered the
greatest percentage increase change, going from 10.4 percent in
2009 to 12.8 percent of the content delivered in 2010. Profession-
or industry-specific content came in second at 11.3 percent, and
mandatory and compliance third, at 10 percent. Not uncommon, the
least amount of content delivered was basic skills, at 4.1 percent,
indicating that organizations are focusing the majority of
development on topics of strategic importance to driving
performance and investing in more advanced skill sets.
Content delivery methods
Instructor-led classroom delivery continues to be the most widely
used delivery method. About 70 percent (a 3 percent increase from
2009) of all training is delivered in the classroom—both online and
live—and 60 percent of that is delivered by live instruction. The
BEST organizations decreased their total instructor-led percentage
from 73.5 percent in 2009 to 67.4 percent in 2010. The G500 deliver
64.7 percent of learning content via live instruction in a classroom.
In 2010, technology-based delivery declined overall for the
consolidated group, from 36.3 percent in 2009 to 29.1 percent in
2010. Technology delivery also declined slightly for BEST
organizations. G500 registered the highest usage of
technology-based delivery methods, delivering more than 40 percent
of content via some form of technology.
The 2010 decline in the total amount of content delivered via
technology by organizations in the consolidated group is atypical
of previous year's results and is a trend that we do not expect to
continue over time. Many organizations are investing in
technology-based delivery systems and methods, and the growing use
of technology to deliver content—especially through social media
tools—will continue to shape the future of the learning field.
For example, mobile learning is continuing to gain traction—and has
the potential to revolutionize content delivery for L&D.
Additionally, ASTD's research demonstrates that leading-edge L&D
departments incorporate more technology components and processes
than their lesser performing counterparts. As the economy and the
employment situation stabilize, we expect a return to the growing
use of technology to design, deliver, and manage L&D. Adoption
of e-learning in support of L&D frequently produces efficiency
gains, increases content reuse, and decreases overall costs for
Nonetheless, creating a robust e-learning program requires
commitment and investment in development costs. As organizations
deploy more e-learning platforms and capabilities, the use of live
instructor-led delivery methods will correspondingly decrease, but
not entirely. Ultimately, in the coming years we expect to see a
more balanced distribution between instructor-led and
technology-based delivery methods, and a broader adoption of mobile
and social learning technologies.
As the economy continues to challenge all industries, there is no
more important time than now to examine how organizations respond
by building the skills of their workforce. We hope these data are
used by executives and managers to better understand how learning
directly affects employee and organizational performance, and to
help learning professionals support and defend the learning
functions importance and value to improving the bottom line.
Download or purchase the 2011 State of the Industry Report.