How Much Should Training Really Cost?
October 19th, 2009
So how much should training really cost- well it is all dependent upon the type of training. Fun fact: Did you know that the global market for learning is worth over $2 Trillion dollars? The price for different types of training does vary significantly from medium to medium. Training Industry recently estimated the following numbers:
• 2008 expenditures for training services was approximately $129.2B, down from $132B in 2007.
• The 2009 market is predicted to drop to $116B; the steepest single year decline in the industry since 2001.
According to Bersin & Associates – The Corporate Learning Factbook 2009:
“The U.S. corporate training market shrunk from $58.5 billion in 2007 to $56.2 billion in 2008, the greatest decline in more than 10 years. Average training expenditures per employee (which include training budgets and payroll) fell 11 percent over the past year – from $1,202 per learner in 2007 to $1,075 per learner in 2008. Staff resources also took a hit. In 2008, large companies employed 3.4 training staffers per 1,000 learners, down from 5.1 per 1,000 in 2007; mid-sized companies employed 4.9 staffers per 1,000 learners in 2008, compared to 7.0 staffers per 1,000 in 2007.”
Other findings:
• The average number of formal training hours dropped from 25 hours per learner in 2007 to 17.2 hours in 2008. Training consumption dropped most substantially among small and midsize businesses, with learners taking 33 percent fewer training hours, on average, than in 2007
• Although instructor-led classroom training remained steady (at 67 percent of all training hours), the proportion of e-learning decreased for the first time ever in 2008. Companies also reduced their use of virtual classroom training, so that (combined with self-study e-learning) the total amount of online training dropped from 30 percent of training hours in 2007 to 24 percent in 2008. This shift illustrates the industry’s steady move toward informal learning and social networking.
• As companies downsized their training staffs, many turned to external providers to fill the resource gaps. Large businesses, in particular, outsourced more functions to third-party providers in 2008, as their staffing numbers were hardest hit.
Virtual worlds are now the new go- to for the government, military and corporate sectors as a cost savings proposition. But not only cost savings exists- organizations are also turning to virtual worlds for immersive training environments. Virtual worlds are easily tailored to the customers’ needs- thus allowing for lower cost of development and a shorter development time frame when compared to traditional training and learning delivery methods.
Leave a Reply