ATD's 2021 State of the Industry report identifies learning changes and challenges.
The COVID-19 pandemic led to major changes in how employers delivered learning in 2020—most significantly, face-to-face learning hours dropped and virtual classroom and e-learning hours grew. In addition, the average organization's direct learning expenditure decreased to $1,267 per employee in 2020, compared to $1,308 per worker in 2019 and $1,299 in 2018. That's according to the Association for Talent Development's 2021 State of the Industry report.
ATD Research analyzed self-reported data from 223 organizations representing a wide range of industries, company sizes, and locations. AllenComm and Allego sponsored the report.
Virtual classrooms and e-learning see substantial growth
Hoping to slow the spread of COVID-19, many national, state, and local governments closed nonessential workplaces in early 2020. Many organizations likewise took measures to limit in-person gatherings of employees for training or other purposes and halted or restricted business travel. The result was that in-person learning hours dropped dramatically. Traditional face-to-face instructor-led classrooms accounted for 16 percent of learning hours used in 2020, down from 40 percent of hours used the year before.
Instead, learners consumed learning online. Last year, organizations used virtual classrooms to deliver 35 percent of learning hours used, up from 19 percent in 2019. ATD's recent research in the Virtual Classrooms: Leveraging Technology for Impact report found that 98 percent of companies use virtual classrooms, and nine in 10 see COVID-19 as a major driver in their decision to use them. Virtual classrooms are synchronous and use technology to connect learners with an instructor in real time.
By comparison, self-paced online delivery (e-learning) accounted for 32 percent of hours used at the average company in 2020, up from 26 percent the year before. Unlike virtual classroom training, e-learning does not require a live instructor and enables learners to access learning at any time.
Learning spending dips but hours record slight increase
Average learning spending per employee across organizations dropped $41 from 2019 to 2020 (a 3 percent decline). That is not surprising when considering that the global economy contracted by 3 percent (in other words, growth was negative) last year, according to the International Monetary Fund. The pandemic's impact was felt around the world, with almost all countries experiencing negative growth. The International Labour Organization reports that the global unemployment rate was up to 6.5 percent in 2020, compared to 5.4 percent in 2019.
Where did the learning spending go? Direct learning expenditure falls into three categories: internal services, learning suppliers, and tuition reimbursement. Organizations last year spent more than one-quarter (28 percent) of expenses on learning suppliers, defined as companies that provide consulting services; external content development and licenses; and outside, nonstaff trainers. Nine percent of expenses went toward tuition reimbursement for programs and courses at colleges and universities, as well as continuing professional education and certification. The rest of companies' learning expenditures in 2020 went to internal services, which comprise in-house development, delivery and administration expenses, and talent development staff salaries.
Direct learning expenditure per employee depends heavily on company size. For example, larger employers can provide the same learning offerings at a reduced cost per worker because they can spread out many of the development and delivery costs over more employees. The 2021 State of the Industry report found that large companies (at least 10,000 employees) had the lowest direct learning expenditure per person as well as the lowest cost per hour used in 2020; small companies (fewer than 500 employees) recorded the highest values for both indicators.
ATD researchers also examined data for some industry groups. Finance, insurance, and real estate (FIRE) companies are often heavily regulated and must deliver considerable amounts of required training to their employees. Many also must provide education to their staff on complex products and services. Last year, FIRE companies spent, on average, $1,291 per employee on learning.
In contrast, healthcare and pharmaceutical organizations spent $1,174 per employee on learning, which is less than the consolidated average across all companies. Research from the American Healthcare Association shows that the pandemic put intense pressure on hospital staff and resources. In addition, overall hospital revenue decreased as a result of a steep reduction in non-COVID-19 volumes (for example, hospitals canceled or postponed some procedures).
Although average learning spending showed a drop across all industries, the number of learning hours each employee used increased slightly. The 2021 State of the Industry report reveals that at the average organization, each worker used 35.0 hours of formal learning in 2020 (or between four and five eight-hour workdays); in 2019, employees used 34.7 hours. Formal learning hours only reflect time spent on standalone learning activities, which are not embedded in on-the-job work activities.
The hours used per employee is slightly higher than the figures seen in the past few years, ranging from 32 to 34 from 2014 to 2018. Each learning hour used in 2020 was slightly less expensive than the year before. And the number of employees per talent development staff member increased. Those changes likely reflect the changes in how employers delivered learning—when companies use virtual classrooms and e-learning, they have the potential to reach more learners with an offering. They may also save on travel costs and overhead costs such as classroom rental fees.
On-the-job learning changes
Despite the pandemic, employers remained committed to on-the-job learning experiences (defined as any learning that is not a standalone activity and is intertwined with work activities). Last year, 62 percent of organizations emphasized on-the-job learning to a high or very high extent. That is slightly higher than the 56 percent seen in 2019.
ATD researchers found that 48 percent of companies saw knowledge sharing in person happen to a high or very high extent in 2020, down from slightly over half the year before. Last year, 38 percent of companies had high levels of knowledge sharing with the aid of technology (such as social media or collaboration tools), which is an increase from less than one-third in 2019.
Compliance and management training top content distribution
Mandatory and compliance constituted 14 percent of organizations' learning portfolios last year, more than any other content area. Examples of mandatory and compliance training include occupational safety and health training (including training related to reducing COVID-19 spread in workplaces), sexual harassment training, and cybersecurity training. It also includes compliance training that is specific to industries. For example, banks are highly regulated in the US, and the Federal Deposit Insurance Corporation requires that banks provide periodic training about their codes of conduct or ethics policy. In healthcare, the Health Insurance Portability and Accountability Act requires all employees who have the potential to access protected health information to receive training on HIPAA regulations.
After holding the top spot for the previous six years, managerial and supervisory content was the second-biggest content area in 2020, with 13 percent of the learning portfolio. The content area includes material related to managing individuals and teams—for example, coaching, building teams, and managing employee performance. Increasingly, managerial and supervisory content includes training on how to manage virtually—in other words, how to manage staff who work in a different location from the manager.
According to the ATD research report Developing Virtual Managers: Driving Excellence From Afar, 77 percent of managers had at least one direct report working in another location by the end of 2020, compared to only 21 percent before the pandemic. The report found that organizations that provided training on how to manage in virtual settings were much more likely to be strong business performers.
With recovery ahead, virtual classrooms will endure
The learning data reported in the 2021 State of the Industry report is for 2020; data for 2021 will be collected in 2022. This year, COVID-19 vaccines became widely available in many countries, and as of October 12, 2021, more than 6.6 billion vaccine doses have been administered worldwide—more than enough to fully vaccinate 43 percent of the global population, according to data from Bloomberg. The International Monetary Fund anticipates that as a result there will be worldwide economic growth (a "vaccine-powered recovery") in 2021 but cautions that this growth will be uneven across countries (and within countries) and characterized by uncertainty about the path of the virus and its variants.
However, even with the recovery, ATD's research in Virtual Classrooms suggests that the increased virtual classroom use will continue for talent development functions. The report reveals that most organizations expect virtual classroom use to increase or stay the same into 2022.
Download the 2021 State of the Industry report at td.org/SOIR2021 or view it in the ATD Publications app (td.org/PubsApp).
The Association for Talent Development collected data from participating organizations via an online survey from June into September 2021. A total of 223 unique organizations submitted data for fiscal or calendar year 2020. All organization-level data is confidential; responses are aggregated, and only summary statistics across groups are reported. ATD does not share, sell, or discuss any individual-level data.
Take Heed When Benchmarking
The data presented in the State of the Industry report will aid readers in benchmarking their organizations' learning expenditures and activities against those of other organizations. To make benchmarking comparisons more meaningful, review the data by industry and workforce size groupings when possible.
However, be aware that all figures from the report are averages across groups, and the circumstances your company faced may be vastly different from those the average participating company, or even the average company in your industry, faced. Therefore, do not aim to replicate the numbers provided in the report. Instead, use the data as a benchmark to better understand your organization's learning expenditures and activities, as well as those of other organizations.