2O14 TRAINING
INDUSTRY
REPORT
ABOUT THIS STUDY
Now in its 33rd year, The Industry Report
is recognized as the training industry’s
most trusted source of data on budgets,
staffing, and programs. This year, the
study was conducted by an outside
research firm May-July 2014, when
members from the Training magazine
database were e-mailed an invitation
to participate in an online survey. Only
U.S.-based corporations and educational
institutions with 100 or more employees
were included in the analysis. Agencies of
the state, local, and federal government
were not included in the analysis.
The data represents a cross-section of
industries and company sizes.
28%
(100-999 employees)
Midsize
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SURVEY RESPONDENTS
Small companies
Industrial Classifications
Respondent profile by industry (weighted per Dun & Bradstreet).
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41%
(1,000-9,999 employees)
Large
31%
(10,000 or more employees)
Total respondents
998
About Survey Respondents:
Note that the figures in this report
are weighted by company size and
industry according to a Dun & Bradstreet
database available through Hoovers of
U.S. companies. Since small companies
dominate the U.S. market, in terms of
sheer numbers, these organizations receive
a heavier weighting, so that the data
accurately reflects the U.S. market.
16
|
NOVEMBER/DECEMBER 2014 training
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www.trainingmag.com
TRAINING EXPENDITURES
Backed by an improving job
market, a sharper focus on
training to close skill gaps, and
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activity leading to more midsize companies, total 2014 U.S.
training expenditures—including
payroll and spending on external
products and services—jumped
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outside products and services rose
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The training budget figure
was calculated by projecting
the average training budget to a
weighted universe of companies,
using a Dun & Bradstreet database
available through Hoovers of U.S.
organizations with more than 100
employees. It is interesting to note
that although small companies
have the smallest annual budgets,
there are so many of them that they
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budget for training expenditures.
Training Expenditures 2009-2014
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DEFINITIONS
Total training spending: All training-related expenditures for the year,
including training budgets, technology spending, and staff salaries.
Training staff payroll: The annual payroll for all staff personnel assigned
to the training function.
Outside products and services: Annual spending on external vendors
and consultants, including all products, services, technologies, off-theshelf and custom content, and consulting services.
Average of Total Annual Budget
Organization Type
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Avg. Across Sizes www.trainingmag.com
Large
Midsize
Small
Average
training NOVEMBER/DECEMBER 2014
|
17
2014 TRAINING INDUSTRY REPORT
TRAINING EXPENDITURES
Types of Training Products and Services
Intended to Purchase Next Year
19%
Assessment & Analysis Testing
6%
Audience Response Systems
18%
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37%
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21%
Business Skills
23%
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11%
Enterprise Learning Systems
8%
Games & Simulations
20%
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15%
Learning Management Systems
41%
Mobile Learning
23%
Online Learning Tools & Systems
44%
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17%
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27%
Talent Management Tools & Systems
18%
Training Management Administration
13%
Translation & Localization
7%
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Average training expenditures for large companies decreased
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from the year before (up from 34 percent in 2013), while
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percent in 2013. Large nonprofits and service organizations
had the largest personnel costs. Across all organization
types, larger companies spent about 10 times as much as
midsize, and midsize companies spent about three times
as much as small ones. The average payroll figure for large
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18
|
NOVEMBER/DECEMBER 2014 training
20
30
40
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For those who reported an increase in their training staff,
the average increase was four people, five less than in 2013.
For those who reported a decrease in their staff, the average
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average, organizations spent 11 percent of their budget
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education organizations spent the highest portion of their
budgets on tools and technology (24 percent and 21
percent, respectively). Manufacturers across all sizes spent
the greatest percentage of their budgets on training tools.
www.trainingmag.com
Training Expenditures per Learner 2012-2014
Q
Q;
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$1,059
$881
$976
All Companies
$1,115
$1,092
$1,238
Small (100 to 999
employees)
Midsize (1,000 to
9,999 employees)
$1,104
$829
$819
Large (10,000 or
$864
$490
more employees)
$903
0
300
600
900
1,200
1,500
Hours of Training per Employee 2013-2014
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37.5
40.7
All Companies
Small (100 to 999
36.5
employees)
42.2
Midsize (1,000 to
9,999 employees)
38.8
41.6
Large (10,000 or
37.5
36.2
more employees)
0
10
20
30
40
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organizations spent the smallest percentage of their training
budget on tools and technologies (1 percent and 4 percent,
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purchases are online learning tools and systems (44 percent
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year), classroom tools and systems (33 percent vs. 29
percent), and content development (29 percent vs. 30
percent last year).
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Manufacturers spent the most this year with an average
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www.trainingmag.com
50
organizations have lost their edge on cost savings as midsize
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per year, three hours more than last year. In general, small
companies tended to have more hours of training this year at
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wholesale organizations having the largest number of hours
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expenditures to training non-exempt employees (40 percent,
down from 42 percent in 2013). Training for exempt nonNBOBHFSTEFDSFBTFEGSPNQFSDFOUUPQFSDFOUJO
2014.
training NOVEMBER/DECEMBER 2014
|
19
2014 TRAINING INDUSTRY REPORT
TRAINING EXPENDITURES
Training Expenditure Allocations—
Who Gets Trained?
Staff per 1,000 Learners
40%
40
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35
30
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25
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15
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NOVEMBER/DECEMBER 2014 training
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www.trainingmag.com
TRAINING BUDGET
What Happened to Your
Training Budget This Year?
Budget status was almost evenly split,
with 43 percent saying their training
budget increased and 41 percent
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percent reported a decrease in budget.
Last year, 41 percent said their budget
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military organizations showed the
greatest tendency for training budget
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the largest gains. Increases were not
evenly distributed across organization
sizes. Large companies (23 percent)
showed more decreases than midsize
(14 percent) and small (13 percent)
companies.
Most of the budget increases were
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organizations reported increases in the
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who reported an increase in their
training budgets attributed it to the
following reasons:
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Budget Change by Industry
9%
31%
13%
42%
45%
Services
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percent last year)
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vs. 49 percent and 40 percent,
respectively last year)
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percent last year)
13%
65%
22%
25%
42%
33%
28%
Education
Like last year, the majority (42
percent) of respondents reported budget
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Some 44 percent chose “other” as
the reason for the decrease, citing
“corporate mandate to cut expenses,”
“LMS implemented,” “lowered priority
by the organization,” and “Training
department reorganized,” among others.
This was followed by:
www.trainingmag.com
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60%
11%
61%
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Association
100%
22%
Nonprofit
31%
47%
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40
60
80
100
training NOVEMBER/DECEMBER 2014
|
21
2014 TRAINING INDUSTRY REPORT
TRAINING BUDGETS
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How Much Did Your Training Budget Increase?
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|
NOVEMBER/DECEMBER 2014 training
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www.trainingmag.com
How Much Did Your Training Budget Decrease?
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50
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Why Did Your Budget Decrease?
40%
Reduced Training Staff
Decreased Number of Learners Served
Decreased Scope of Training
Attended Fewer Outside Learning Events (conferences/seminars)
Decreased Outside Trainer/Consultant Investment
Budget Adjusted to Reflect Lower Costs
Other
11%
22%
11%
18%
24%
44%
0
www.trainingmag.com
10
20
30
40
training NOVEMBER/DECEMBER 2014
|
23
2014 TRAINING INDUSTRY REPORT
TRAINING BUDGETS
Projected Funding for Learning Areas Next Year
Executive Development
Management/Supervisory Training
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*54ZTUFNT5SBJOJOHFHFOUFSQSJTFTPGUXBSF
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Customer Service Training
Sales Training
Mandatory or Compliance Training
1SPGFTTJPO*OEVTUSZ4QFDJmDFOHJOFFSJOHBDDPVOUJOHFUD
Onboarding
11%
60%
4%
26%
20%
6%
60%
15%
7%
61%
10%
7%
61%
20%
15%
3%
5%
63%
19%
4%
63%
20
40
16%
43%
72%
14%
13%
19%
6%
38
8%
17%
10%
58%
16%
0
25%
60%
4%
60
8%
19%
14%
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T R A I N I N G D E L I V E RY
Nearly 47 percent of training hours were delivered by a
stand-and-deliver
instructor in a classroom setting—up a bit
from the 44 percent reported last year.
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year.
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they are using social learning to some extent.
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companies continue to rely on instructor-led delivery
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Blended learning was fairly even across companies of all
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appeared to be focusing on online or computer-based
Training Delivery Methods by Company Size 2014
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|
NOVEMBER/DECEMBER 2014 training
www.trainingmag.com
T R A I N I N G D E L I V E RY
learning management systems (LMSs), both with 74
percent. Last year, virtual held the lead at 78 percent,
followed by LMSs with 74 percent.
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last year)
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percent)
methods (35.9 percent vs. an average of 26.5 percent for
small and midsize companies).
Mandatory or compliance training continued to be done
mostly online, with 72 percent of organizations doing at
least some of it online and 20 percent entirely online (down
from 21 percent last year). Online training also often is used
for desktop application training (56 percent, the same as last
year) and IT/systems application training (54 percent, down
from 58 percent last year). Online training was least used for
executive development (40 percent had no online training for
it), onboarding (35 percent had no online training for it), and
interpersonal skills and customer service (31 percent had no
online training for either one). Of the learning technologies
presented, the most often used included:
The delivery methods least often used for training remained
the same as last year:
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percent (down from 26 percent)
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management system at 21 percent (down from 25 percent)
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Online Method Use for Types of Training
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Management/Supervisory Training
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Sales Training
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Onboarding
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40
60
80
100
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www.trainingmag.com
training NOVEMBER/DECEMBER 2014
|
25
2014 TRAINING INDUSTRY REPORT
T R A I N I N G D E L I V E RY
Learning Technologies Current Usage4+0*
Podcasting
Online Performance Support or Knowledge Management System
Rapid E-Learning Tool (PowerPoint conversion tool)
Application Simulation Tool
Virtual Classroom/Webcasting/Video Broadcasting
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Learning Management System (LMS)
Mobile Applications
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Online Performance Support or Knowledge Management System
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Application Simulation Tool
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Learning Management System (LMS)
Mobile Applications
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Podcasting
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Learning Management System (LMS)
Mobile Applications
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Learning Management System (LMS)
Mobile Applications
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NOVEMBER/DECEMBER 2014 training
www.trainingmag.com
TRAINING OUTSOURCING
2014 saw a sizeable increase in the average expenditure
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was spent on outsourcing in 2014, the same as in 2013.
On average, 29 percent of companies completely
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year). Learner support, however, was mostly handled inIPVTFQFSDFOU
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was handled in-house, as well.
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house and outsourced. Across all the topic areas, large
companies outsourced more than midsize ones, and midsize
organizations outsourced more than small companies. This
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organizations.
The level of outsourcing is expected to stay relatively steady
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to stay the same in the outsourcing area. The percentage
of companies expecting to decrease use (11 percent) is
slightly higher than those expecting to use outsourcing more
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though. In learner support, twice as many companies said
they will be doing less than those that said they will be
doing more.
There aren’t many differences between the outsourcing
changes by company size. One thing that stands out:
Large companies will outsource less custom content
development.
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www.trainingmag.com
training NOVEMBER/DECEMBER 2014
|
27
2014 TRAINING INDUSTRY REPORT
TRAINING OUTSOURCING
Extent of Outsourcing#0+0*
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NOVEMBER/DECEMBER 2014 training
www.trainingmag.com
Projected Use of Outsourcing4+0*
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www.trainingmag.com
training NOVEMBER/DECEMBER 2014
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29