Executives in charge of the learning for their organizations are well aware that money spent on developing the workforce is money well spent. But determining budgets and figuring out how much is the right amount to spend can be a time-consuming and difficult process. It can be helpful to compare your organization’s learning budget with the general trends for learning across multiple industries. Knowing the budgetary breakdown by type of employee can help you decide how to invest in the development of your various workforce segments. In addition, seeing how these budgets are broken down to pay for various types of training can help you choose which investments to make and where your training dollars will best serve your organization’s business needs. Is the budget dedicated to third-party training or internal training? Does it go toward certifications for IT professionals, or is it spent on college courses? Does it go to classroom training or e-learning?
In a recent study, Fairfield Research Inc. conducted in-depth interviews with 200 learning, training and human resources executives. We surveyed these executives about their annual budgets, their budget allocations by type of learning programs and the number and type of clients served by those programs. The purpose of this study was to offer the enterprise learning industry a benchmark by which to compare individual corporate efforts.
The average enterprise company has an annual learning and training budget of $3.8 million. Approximately two-thirds of the corporate budget ($2.5 million) is dedicated to training and learning programs conducted by third parties and by internal staff. Of this total, around $1.4 million is spent on third-party learning programs, while $1.1 million is spent on training and learning programs conducted by internal staff members.
Tuition payments and co-payments for formal education make up $698,000 of the annual budget for the average enterprise company. Technical certifications for IT staff members weigh in on the budget sheet at an average $113,000. (More and more often, the costs for technical certifications and the training that leads up to them are borne by the individual.) Budgets for customer training in fiscal 2002 reached nearly a half-million dollars ($447,000) at the average enterprise company—a significant 12 percent of the total corporate learning and training budget. (See Figures 1 and 2.)
Who Is Served by Learning Initiatives?
The $3.8 million budget serves, on average, 3,640 different people—more than $1,000 ($1,043) invested in each staff person touched by a learning or training program at the company. Enterprise learning programs reach more technical staff members (average 1,056) at the average company than any other type of employee. Approximately one in five (22 percent) of the employees touched by learning and training programs are middle management executives (800 per company), and 583 of the trainees or students represent senior management at the enterprise company. Support and other staff members balance out the client population of enterprise learning and training programs. (See Figure 3.)
On average, each of the 3,640 training and learning clients are exposed to about three different learning and training programs every year. Thus, in 2002, the average enterprise company served a total client population of 11,350 employees.
Training and learning programs taught by internal staff touched 3,611 employees in 2002. Perhaps surprising, the second largest type of program with regard to population reached was customer training. In 2002, the average enterprise company reached 2,358 clients of the company with customer-training programs.
Training and learning programs taught by third-party organizations reached 2,109 employees in the average enterprise company, with 2,000 employees receiving tuition payments or co-payments from the company. In addition, 1,385 IT employees received payments or co-payments for their technical certifications. (See Figure 4.)
Methods of Instruction
When the learning and training programs of the average enterprise company are analyzed with regard to the venue or method of instruction, instructor-led training and learning still dominated all other educational methods. On average, instructor-led classroom programs reached 7,222 clients in 2002—more than twice the number of clients served by the second-largest method, e-learning. In 2002, more than 2,000 (2,178) employees were involved in an e-learning program. Other individualized programs, including self-study texts, CD-ROMs and videos, reached 1,949 employees in 2002. (See Figure 5.)
On average, enterprise companies in 2002 had a corporate learning and training budget of $3.8 million. The corporate learning and training programs supported by that budget reached 3,640 different employees. That client population of 3,640 were enrolled in three different learning and training programs during the year. Most of the employees reached by enterprise learning programs in 2002 were management executives, representing 38 percent of the learner population. Thirty percent of employees touched by enterprise learning programs were technical staff members. One-third of the client employees of learning programs were support and other staff. Nearly two-thirds of the clients/employees participated in instructor-led learning programs in 2002. Nearly 20 percent of the client/employees participated in e-learning programs in the past year.
Chief Learning Officer magazine and Fairfield Research Inc. sent e-mail to learning and training professionals at enterprise companies in the United States, directing them to a survey questionnaire that was uploaded to one of Fairfield’s CyberSurvey.com sites. The survey was completed and submitted by n=292 respondents. The maximum error range for a study with n=292 is plus or minus 5.7 percent. However, due to the mean-score data utilized (much more stable statistic), the error of the mean is much lower than that of a percentile-response.
Gary Gabelhouse is CEO of Fairfield Research Inc., a full-service market-research company established in 1982 to conduct enterprise-research studies for clients worldwide. Reach Gary by e-mail at firstname.lastname@example.org.