Bersin by Deloitte: Learning and Development Spending Soars Again as Organizations Invest to Close Skill Gaps

OAKLAND, Calif., Aug. 26, 2015 /PRNewswire/ -- To address the ever-widening talent gap in a job market where organizations compete heavily for skilled talent, overall spending on learning and development (L&D) rose 10 percent to $1,004 per employee in 2014, according to new research from Bersin by Deloitte, Deloitte Consulting LLP. The 2014 findings mark the fifth consecutive year increase and appear in Bersin by Deloitte's new industry study, "The Corporate Learning Factbook 2015: Benchmarks, Trends and Analysis of the U.S. Training Market."

Summarized in a WhatWorks® market brief, the research shows that many organizations are increasing their investment in internally-developed talent because they realize that they cannot recruit all the talent they need from external sources. The research also reveals that the roles and responsibilities of most L&D practitioners have grown more diverse. Traditionally, L&D practitioners were primarily responsible for creating and disseminating internally-developed content.  These so-called "bedrock" roles of L&D, occupied 50 percent of surveyed practitioners' time in 2011 and 41 percent of their time in 2014, a difference of nearly 10 percentage points. In 2014, respondent L&D organizations allocated 8 percent of their staff time to curating information. That means L&D staff typically spend more time on sourcing and incorporating a variety of externally-produced content into current learning portfolios. Many L&D leaders say such externally-produced content can help them to better address the changing needs of both businesses and learners.

"The need to develop existing employees is a pressing matter, especially at a time when very few organizations believe their employees possess the skills necessary to perform their roles effectively as indicated in the Deloitte 'Global Human Capital Trends 2015' report," said Dani Johnson, vice president, Learning and Development Research, Bersin by Deloitte, Deloitte Consulting LLP. "To compete in the marketplace, organizations should focus on long-term goals and ensure that employee development builds baseline proficiencies. They should also align workers with the needs of the business, training staff to meet present objectives while ensuring that the talent pipeline is equipped to address future challenges."

Data for this study was collected from 295 U.S. organizations from January to May 2015. Findings of the new research, which as in past years includes essential training spending metrics, reflect changes made to this year's survey, which increased the minimum number of employees for respondent consideration to 1,000-plus (mid-size organizations), from 100-plus (small-sized organizations) just a year ago. Bersin by Deloitte also adjusted the organization size definitions to provide a more granular level of insight into market specifics.

Among the study's other key findings:

• L&D organizations reprioritize responsibilities. Typically, demands on the L&D function have increased at the same time as their availability to address these requests has decreased, forcing them to reprioritize their responsibilities. As a result, surveyed organizations increased their reliance on outside service providers by 4 percentage points in 2014, with external services comprising 13 percent of total L&D spending. Of this, 22 percent went to purchase off-the-shelf content and 15 percent to the development of custom e-learning content.
• Mature organizations spent 38 percent more. Surveyed organizations with mature, effective L&D functions spent $1,317 per learner on average, or 38 percent more than the least mature groups. Organizations at this level tend to focus more on professional and industry-specific training to help augment organizational capabilities and strengthen operations, while those at the lowest level often focus more on compliance and meeting individual needs through an ad hoc approach to training.
• Instructor-led training drops. While still the top delivery method among those surveyed, instructor-led training dropped 9 percentage points to occupy 35 percent of practitioners' time. Some of this allotment was reallocated to e-learning, while some went to other up-and-coming and nontraditional method of L&D delivery, such as self-directed studying.

To learn more, register to join Bersin by Deloitte Senior Research Analysts Jen Krider and Ben Carroll for their online webinar, "How and Where Organizations are Investing to Help Close Employee Skills Gaps" Oct. 13, 2 p.m. EDT/ 19:00 BST.

Those interested in learning more about Bersin by Deloitte or its WhatWorks® membership may email [email protected] or call +1 510 251 4400.

About Bersin by Deloitte
Bersin by Deloitte delivers research-based people strategies designed to help leaders and their organizations in their efforts to deliver exceptional business performance. Our WhatWorks® membership gives Fortune 1000 and Global 2000 HR professionals the information and tools they need to design and implement leading practice solutions, benchmark against others, develop their staff, and select and implement systems. A piece of Bersin by Deloitte research is downloaded on average approximately every minute during the business day. More than 5,000 organizations worldwide use our research and consulting to guide their HR, talent and learning strategies. For more information, please visit http://www.bersin.com.

As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see http://www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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