The training community loves statistics. If there is ‘fashion’ among admins, it would be based on how their company executes its program in comparison to the statistics of the day. You might overhear someone proudly state “our company spends $X per employee, which is over the industry standard of $Y per employee.” Or “with our new e-learning initiative, we can train W% more employees at X% less cost, and results in a learning effectiveness coefficient that’s Y% greater than the typical Z% as stated by the ATD.”
Statistics are a great way for organizations to measure how well they are spending their corporate learning dollars. For medium and large companies, it’s a must. Because of the sheer numbers of employees and learning hours deemed necessary, these stats can help to identify costly or inefficient processes in the learning flow. But what do you do if you are a one man show – an HR manager with no staff? What if your company doesn’t even have a Talent Development function? You’ve just taken the initiative to develop a much needed training budget and schedule. Forget about stats for the time being. Just get started.
Training Dollars Per Employee
Training dollars spent per employee is a great marketing tool for recruiters to hire on new employees, but on its own, is not a reliable statistic. For instance, a software development may spend over $1000 on education per employee, but if the bulk of the cost is computer programming workshops for developers (expensive), that does not benefit the management training program soft skills (inexpensive).
Focus on what your company needs, rather than how much you must spend per employee. Start with something relatively inexpensive that everyone in the company can and should learn – the company mission and vision.
We helped develop a training video for a small company. The video was a short 20 minute introduction to the vision and mission of the business, given by the CEO. We first trained the managers. After the managers watched the video we asked them to schedule an hour meeting with their teams during which they would watch the video and discuss how each employees’ function contributed to the company vision and mission.
The CEO began randomly asking employees about the company mission. He was amazed at how informed and involved his workforce had become after the video training. Furthermore, absenteeism dropped, and productivity spiked over the next year. Within a year of developing the video, the company had decided to dedicate staff to further the function of talent development.
Training Effectiveness vs. Cost
The ratio of effectiveness vs cost can throw even experienced admins into a tizzy. The less expensive training tends to be the least effective. You can imagine the conundrum. If an administrator is directed to keep spending low, but wants to maximize effectiveness, what can he do? To make matters worse, these stats can vary quite widely from year to year based on the quality of the study. One year you may find that the programs you’ve been investing in is found to be less effective than before. So do you stay with it and hope against hope, or jump ship to something different.
In reality, effectiveness really is more about commitment than it is cost. If a company – training administrators and learners alike – are committed to talent development, then the effectiveness will reflect it, regardless of how much money you throw at your program.
Budgeted vs. Actual Training Dollars Spent
Are you over-budget on your corporate education programs? Under-budget? Based on the perceived performance in talent development, should you be budgeting more or less? Should you be considering more costly training or less costly training?
Understanding this statistic requires you to really dig into your training program performance, but also into your corporate culture as well. If you are under-budget, is it possible that the culture of your organization does not place emphasis or commitment to talent development, that your workplace isn’t following through on learning and growing. On the other hand, it could be that you’ve successfully invested in less costly regimen? Just be sure that the effectiveness of your programs does not suffer as a result.
If you are over-budget, is it a company-wide trend, or are a few departments far outspending others in training? How has the performance of those departments fared? If departments who spend more on learning outperform those who don’t in your organization, maybe you can use this information to push for a larger budget across all departments.
Drilling down into this statistic and analyzing its cause will open your eyes to what’s working and what’s not working in your organization. You will gain an understanding into your company’s culture and how learning and talent development are received among the different strata of the organization.
Talent development in an organization is really driven by the corporate culture. The statistics on their own really don’t present a full picture, but only a glimpse into possible problem areas. Developing a training and development program is a task that will require acceptance on every level, from the individual contributor to the CEO. As a training administrator, it is your responsibility to develop and champion a learning program that will raise the bar on performance across the board. Do so, and you and your function will be recognized as an integral part of ongoing company growth.