Overall spending on training rose 15 percent to $1,169 per learner on average in 2013, according to Bersin by Deloitte’s new industry study The Corporate Learning Factbook 2014: Benchmarks, Trends, and Analysis of the U.S. Training Market. The rise in training spending is a signal that businesses are responding to a growing skills gap as the economy recovers by investing more in employee development.
“The problem many organizations face today is not a shortage of people, it is a shortage of key skills, especially those in engineering, scientific and technical fields,” says Karen O’Leonard, vice president, benchmarking and analytics research, Bersin by Deloitte, Deloitte Consulting LLP.
In particular, the demand for skills in computer science, life sciences, mathematics, physical sciences, and engineering is growing at above-average rates.1 In addition, the pace of technology change accelerates each year, creating even more demand for highly educated people.
“Businesses are responding by investing more. And in mature organizations, this investment is not just short-term training—it involves building a ‘supply chain’ of skills to fill these gaps for the long-term,” says O’Leonard.
Nearly 300 U.S. organizations participated in the study from October to December 2013. Among the research study’s additional findings:
- Mature organizations spend 37 percent more. Organizations with mature, effective L&D functions spend $1,353 per learner on average, or 37 percent more than the least mature groups. Most of these organizations have also adopted a “continuous capability development” approach that makes them more innovative, responsive and agile as their markets change. Learning in this model includes development planning, formal interventions, rotational assignments, coaching, mentoring and much sharing and collaborative learning.
- Technology organizations invest more in development. Technology organizations spent $1,847 per learner on average – one of the highest of any industry sector. Several tech firms have made large investments for training their teams to evolve from product sellers to solution and industry experts. Other organizations in the technology space have transformed their engineering teams to focus on new products in consumer electronics, Big Data, telecommunications and cyber-security.
- Leadership development claims the largest budget share. The largest share of the L&D budget went to leadership development, with 35 cents of every training dollar, on average, spent on developing leaders at all levels. Leadership has become an even bigger issue as the economy recovers and many firms look to expand globally. More than 60 percent of all organizations cite “leadership gaps” as the top business challenge.
A complimentary summary of the findings, WhatWorks® market brief, is available.The full report, The Corporate Learning Factbook 2014: Benchmarks, Trends, and Analysis of the U.S. Training Market, is available for $795 for a PDF. For more details, visit www.bersin.com/corporate-learning-factbook-2014.