All data points, statistics, trends, and predictions presented in this article have been gathered by G2R research team led by Imed Bouchrika, PhD. You are free to quote, share, and distribute the information here for your own purposes without any limitations.
Training is an integral part of workforce development and organizational growth. The need for effective employee learning and development feeds a thriving industry that focuses on providing business organizations with training programs and services. Recognizing the positive impact brought by training on employee performance and organizational competitiveness, United States-based organizations allocate an average of 11% of their budget on employee training and development (Freifeld, 2018).
According to Berkley and Kaplan (2019), having an employee-centric approach to business is instrumental to the success of the whole organization. Training and development, however, is most effective when implemented strategically, which involves content development, method of delivery, and integration of technology (Harward & Taylor, 2014). The trend in training delivery has evolved over the years from instructor-led classrooms to utilizing online platforms, such as learning management solutions (LMS). This, however, does not mean that the traditional approach to employee training and development is no longer relevant or effective, or that a mix of both methods is nonexistent.
Using relevant training industry statistics from trusted sources, we aim to analyze the current state of the employee learning and development industry in North America, as well as in other parts of the globe. In this article, we will look into the methodologies used by learning and development professionals, the training expenditures of organizations, the challenges to implementing effective employee learning and development programs, the adoption of new technology, and more.
Training Industry Statistics Table of Contents
- What Is Employee Training?
- Why Do Organizations Invest in Employee Training?
- Training Approach and Methodologies
- Employee Training Challenges and Effectiveness
- Training Expenditure
- Emerging Technologies, Trends, and Forecasts
- Technological Advancement and Personalized Corporate Learning
What Is Employee Training?
Employee training is a systematic method of learning and development with the purpose of enhancing the efficiency of an individual, a group, or an organization (Goldstein & Ford, 2002). This involves the use of various methods that can be classified as synchronous or asynchronous learning models. Synchronous learning refers to the training approach where employees learn under the guidance of an instructor whether in a traditional classroom setting or when taking a virtual course. Asynchronous learning, on the other hand, is when employees work independently and at their own pace. Another approach combines these two models called blended or hybrid learning (CompTIA, 2020).
Source: Training Industry Magazine, 2019
According to the 2019 Training Industry report, instructor-led or classroom-based training remains as the delivery method preferred by small, midsize, and large companies in the U.S.
- 44% of small companies prefer to deliver training with the help of an instructor in a classroom setting, also called instructor-led training.
- 27% of small companies utilize blended learning methods and virtual classrooms.
- 39% of midsize companies use a classroom-led approach to training, 25% blended learning methods, and 17% utilize virtual classrooms.
- 36% of large companies use classroom-led training and 34% use a blended learning approach.
- Large companies (32%) are also more likely to utilize computer-based or online learning methods.
- Midsize companies (6%) use more mobile-based learning more than small (5%) and large companies (4%).
Online learning solutions, however, are on the rise and more preferred by talent developers as these are more flexible, considering the schedule and learning pace of employees (LinkedIN Learning, 2018).
- 68% of employees prefer to learn or train in the workplace.
- 58% of employees prefer to learn or train at their own speed.
- 49% of employees prefer to learn or train when necessary.
Why Do Organizations Invest in Employee Training?
The onset of the new millennium brought in a broader understanding of the importance of employee learning and development to corporate organizations as a competitive weapon instead of just “an annoying cost factor.” Intellectual capital is now valued just as much as physical and financial assets as knowledge-based services carve their own spot in the economy among production-based businesses. To remain competitive, continuous learning has become imperative in creating and maintaining a sustainable advantage (Urdan & Weggen, 2000).
Training contributes to the high level of employee satisfaction and low turnover rates, which further proves that employee satisfaction and loyalty do not rely on compensation and other benefits but also on opportunities for growth provided by organizations. Training also helps employees develop a positive attitude toward learning and improving proficiency, which results in enhanced productivity and competitiveness in the workplace and the organization as a whole (Yazdanifard et al., 2013).
Source: The Conference Board; PR Newswire, 2019 Designed by
- 39% of employees in the U.S. consider the potential for growth as a contributor to employee satisfaction (Levanon et al., 2019).
- LinkedIn’s 2018 Workplace Learning Trends reported that 94% of employees would stay longer in companies that are willing to invest in their professional development.
In terms of areas of focus, company executives, people managers, and learning and development professionals agree that developing soft skills should be an utmost priority. But when it comes to other areas of focus, their priorities vary with executives prioritizing identifying trends to prevent future skill gaps, while learning and development professionals are focusing more on global training consistency and delivering insights on internal skill gaps (LinkedIN, 2018).
Source: LinkedIN Learning, 2018
Training Approach and Methodologies
Companies that do not invest in their employees are jeopardizing their own survival and success. The practice of not investing in employees, however, lingered because there were little to no robust methods for measuring how human capital investment helps boost the bottom line. This was until learning and development training for leadership, job design, knowledge sharing, and more have emerged (Bassi and McMurrer, 2007).
Source: LinkedIN Learning, 2020 Designed by
- Leadership and management take the highest priority in skill training this year at 57%.
- 70% of firms offer some type of training, especially for employees in management and mid-level positions (U.S. Department of Labor, 2014).
- The top five soft skills companies should prioritize in 2020 are creativity, persuasion, collaboration, adaptability, and emotional intelligence.
- The top five hard skills companies should focus on this year are blockchain, cloud computing, analytical reasoning, artificial intelligence, and UX design (Van Nuys, 2019).
- Cloud computing is the lowest priority skill in 2020 at only 8%.
Training delivery methods also vary according to company size. According to Training Industry’s 2019 report, small, midsize, and large companies utilize blended learning, instructor-led classroom, and self-paced online or computer-based methods the most (Training Industry, Inc., 2019).
- 9.7% of organizations mainly use instructor-led classroom approach when training their employees.
- 38.1% of companies use instructor-led methods only for 10% to 29% of training.
- 80% of organizations do some compliance training online and 29% entirely online.
- Sales training is also mostly conducted online by 81% of the organizations.
- Profession/industry-specific training, such as desktop application and IT systems, are also done online by 73% of organizations.
- Only 43% of organizations use online methods for executive development training.
- Learning management systems or LMS emerged as the most often used technology with 82% of organizations using it in 2019. Ninety percent of large and midsize organizations use LMS compared to 71% of small companies.
- 75% of organizations use virtual classrooms and webcasting for online training.
- 34% of organizations included mobile applications in their employee training programs.
- According to a 2020 CompTIA survey of HR staff and training leaders, 44% of respondents use mobile apps and 39% are exploring this technology.
- 23% of large companies use virtual reality, 11% use augmented reality, and 9% artificial intelligence technology in employee training.
- Only 5% or less of small companies incorporate VR, AR, and AI technology in their training methods.
Source: Training Industry Magazine, 2019
Employee Training Challenges and Effectiveness
According to a survey conducted by CompTIA published in CompTIA Workforce Learning Trends 2020, one of the challenges in implementing effective training programs is the lack of leadership from the organizations’ end (CompTIA, 2020).
- 35% of senior HR staff believe that learning and development are a “mostly strategic priority” compared to 22% of junior HR staff.
- 10% of junior HR staff would say that learning and development is an “operational cost.”
- Lack of time is the number one reason that holds employees back from pursuing further learning or training in 2018.
- 44% of Gen Z employees would spend more time learning or training if they receive recognition from their managers compared to 21% of Boomers.
- 1 in 2 companies in the U.S. does not have formal training strategies in place to address the skills gap.
- 41% of HR staff, however, revealed that the real problem is the lack of resources.
- 39% of organizations claimed that insufficient budget is also a hindrance to adapting effective learning and development programs.
LinkedIn 2020 Workplace Learning Report revealed that the biggest challenge to employee training is making managers prioritize employee learning and training not just in the U.S. and North America but the rest of the world.
- 49% of talent developers agree that getting managers to prioritize learning is their number one challenge in 2020.
- Creating a culture of learning comes at the second spot with 42% of talent developers saying that this is one of the biggest challenges they have to face this year.
- 36% of talent developer respondents agree that driving engagement in learning is also a major challenge.
Source: LinkedIN Learning, 2020
Another report from Training Industry (2017) listed the main challenges faced by learning leaders, which include learning experience across modalities or methodologies used as a critical challenge. According to the report, multiple methods or modalities are used in delivering training programs. These modalities can either be classroom- or instructor-led, asynchronous elearning, or a combination of both.
- 70% of learning leaders believe that utilizing more than one modality is crucial for training.
- 52% of training programs use between 3 to 6 modalities in training their employees.
- 30% of learning leaders provide some form of customization in training programs offered.
Organizations that invest in effective employee training and development have the tendency to achieve both short- and long-term benefits (Yazdanifard et al., 2013). What makes training effective depends on a variety of factors, and identifying learner preferences play a significant role in figuring out the best training methods (Training Industry, 2017).
- Employees found on-the-job training (82%), on-the-job coaching (19%), and informal social learning (71%) to be the most effective training methods in 2016.
- Simulation (70%), performance support tools (68%), and formal coaching (65%) were also identified as useful training modalities but were not utilized more often.
- Virtual instructor-led training and webinars are often used but found to be less useful by employees.
The total expenditure covers the budget allocated by organizations for training-related activities, which include payment for facilities used, technology, instructor salaries, and others. Training Industry Magazine (2019) reveals the expenses of business organizations in the U.S. when it comes to employee training.
- In 2019, the total spending on employee training globally reached $370.3 billion.
- The total spending on employee training in North America in 2019 was 169.4 billion.
- Globally, excluding the North American region, the estimated total spending on employee training was $200.9 billion in 2019.
- The total training expenditures in 2019 declined by 5.3% to $83 billion.
- An average of $1,286 was invested per learner in 2019. Each employee had to train for an average of 42.1 hours in 2019.
- 39% of employees who were trained in 2019 were non-exempt employees and 10% held executive positions.
- Global spending on modern learning systems, on the other hand, continued to increase from 2009 to 2017.
- In 2017, organizations in North America spent an estimated total of $97.6 billion on internal training resources.
While internal training remains the most preferred approach, organizations also seek out external services to bridge the gap that the skills internal training programs are incapable of addressing effectively.
- In 2019, an average of 8% of the training budget was spent on outsourcing.
- Large companies spent an average of $1.5 million in outsourced training services compared to $70,908 spent by small companies and $67,209 spent by midsize companies on outsourcing training services.
- In 2018, companies are estimated to spend an average of 39% on external or outsource training service providers and approximately 61% on internal training resources.
- Another report reveals that North American training organizations spent approximately $38.5 billion on external training services in 2017 (Training Industry, Inc., 2017).
- North America’s estimated spending on modern learning systems decreased from $161.7 billion in 2016 to $161.1 billion in 2017.
- 40% of the North American training budget was spent on external training products, services, and tuition between 2015 and 2017.
- $3.2 billion was spent on learning technologies and $3.1 billion on training outsourcing.
- In 2016, $28.1 billion was invested in external courses.
Source: Training Industry Inc., 2017
In 2019, the Training Industry asked 240 respondents made up of U.S.-based corporations and educational institutions with at least 100 employees about the training products they would likely purchase in the same year.
- 44% of the respondents claimed that online learning tools were the purchase they looked forward to the most.
- Content development and authoring systems took the second spot with 34% of respondents citing they would purchase both products for training.
Emerging Technologies, Trends, and Forecasts
An insight report by the World Economic Forum titled The Future of Jobs Report 2018 depicts the share of companies in the U.S. that expect to use training providers in upskilling and reskilling their workforce from 2018 to 2022.
- 52% of respondents expected to reskill or upskill employees by 2022 by using internal resources.
- Private training providers and educational institutions would also be utilized by 27% and 21% of respondents, respectively.
- 17% of respondents would use public training providers and public educational institutions for training.
- Large companies are projected to increase outsourcing in 2020 compared to midsize and small companies.
- 51% of learning and development professionals plan to launch upskilling programs in 2020.
- 43% of learning and development professionals plan to launch reskilling programs in the future.
- Training providers, including business schools, computer, and management training firms, will experience a continuous increase in revenue, which is expected to reach approximately $14.2 billion by 2023 (Huhn, 2019).
Learning and development professionals are looking forward to what emerging technologies will bring, especially in terms of personalization, assessment, and independent learning (CompTIA, 2020).
Source: CompTIA Workforce and Learning Trends 2020
Technological Advancement and Personalized Corporate Learning
In an interview, Training Industry chief executive Ken Taylor said that learners, regardless of age, want shorter, relevant, and personalized learning (Kempski, 2019). With modern technology currently transforming the training industry at an accelerated pace, emerging technologies like VR, AR, and AI bring the potential of adding more context, relevance, and personalization to corporate learning and development.
Source: LinkedIN Learning, 2020 Designed by
Technology, however, no matter how sophisticated, has its drawbacks and disadvantages. According to Steve Fiehl, chief innovation officer of CrossKnowledge, the capability to provide personalized learning experience is being disrupted by “mass personalization” (Training Industry, Inc., 2017). This one-size-fits-all approach fails to address the needs and growing expectations of learners for a personalized learning experience. But thanks to recent advancements in technology, such as big data and machine learning, creating individualized learning solutions is now more possible than ever.
- Association for Talent Development. (2019, December 6). Learning by the numbers. ATD. https://www.td.org/magazines/td-magazine/learning-by-the-numbers#gsc.tab=0
- Atd. (2019). 2019 state of the industry. Atd Research. https://www.td.org/research-reports/2019-state-of-the-industry#gsc.tab=0
- Berkley, R. A., & Kaplan, D. M. (2019). Strategic training and development. New York, NY: SAGE Publications, Inc. https://us.sagepub.com/en-us/nam/strategic-training-and-development/book250876
- CompTIA. (2020). Workforce and learning trends 2020. CompTIA Properties, LLC. https://comptiacdn.azureedge.net/webcontent/docs/default-source/research-reports/comptia-it-workforce-and-learning-trends-2020.pdf?sfvrsn=68a13c23_4
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- Kempski, L. (2019, November 25). State of the training industry with Ken Taylor. d’Vinci Interactive | A Custom e-Learning Solutions Company. https://www.dvinci.com/thinking/state-of-training-industry-with-Ken-Taylor
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