Although management represents a small percentage of the corporate workforce, it gets the lion's share of the corporate training budget, according to a study of the $58.5 billion U.S. training marketing just released by Bersin and Associates. Approximately 21 percent of training program dollars is spent on leadership development and management/supervisory training.

“Corporations are investing heavily in current and up-and-coming leaders,” said Josh Bersin, president of Bersin & Associates, the only research and advisory firm solely focused on enterprise learning and talent management. “We see an emphasis in this area across all sectors. Looming retirements, gaps in management talent, and economic pressures are causing companies to funnel dollars into their leadership pipelines.”

Highlights from the study, available through the report and Bersin events, include:

• The corporate learning market grew slightly from 2006 to 2007, increasing from $55.8B to $58.5. Spending on products and services grew from $15.8B in 2006 to $16.38B in 2007.
• The average spending per learner is $1,202, a figure that is roughly equivalent to last year. The highest spending sector is finance and insurance ($1,061 per learner) and the lowest is retail ($594 per learner).
• While management/supervisory training and leadership development is a top priority overall, specific industries invest heavily in other employee audiences as well. For instance, in telecommunications, 23% of training program dollars is spent on customer service training; technology companies invest 29% of training dollars on sales training; and pharmaceuticals spend 25% on compliance and other mandatory training.
• E-learning has grown dramatically. The use of self-study e-learning now accounts for 20% of student hours, up from last year’s figure of 15%. This growth is driven largely by an increase in online training among small organizations (100-999 employees), which are acquiring the skills and technology to make online training a reality.
• The younger generation of learners is driving changes in learning strategies. This year’s study shows a sharp increase in new web-based and collaborative learning resources, such as podcasts, communities of practice, blogs, and wikis.
• Reliance on outsourcing continues to increase in two categories: the use of outside instructors and custom content development. Outsourcing of LMS administration showed a decline in 2007, as did use of offshore content developers.
• Today 38% of organizations are using a learning management system (LMS), with the highest growth in usage among mid-market buyers. Over half of all companies are using a virtual classroom tool, and between 20 to 30% are using application simulation and rapid e-learning tools.

About the study

Bersin & Associates 77-page "2008 Corporate Learning Factbook" analyzes a wide range of metrics, including: budgets, expenditures per learner, cost per student hour, program priorities, budget allocations, staffing sizes, staff to learner ratios, staff to total spending, technology usage and budgets, and outsourcing spending. The study is based on data collected by an August 2007 survey conducted in partnership with Training Magazine.

The Factbook offers corporate training executives baseline metrics which can be used to assess the efficiencies of their own corporate training initiatives. The Factbook includes 130 data points broken down by company size and industry sector, so executives can compare their own metrics with those from comparable organizations.

Contact Bersin regarding a free webinar this week and upcoming events throughout the year based on the report.

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