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Survey Indicates Drop in Training Budgets and Limitations in Measuring ROI
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Mountain View, Calif.
A November 2008 study by Expertus and Training Industry Inc., "Measuring Learning as Budgets Tighten," reveals that far more training budgets are decreasing than increasing in 2009. Despite the need to demonstrate the return on increasingly limited training investments, the study found that ROI and business impact metrics are not being used very often.
For 2009, more than twice as many respondents expect budget decreases rather than increases. Forty-eight percent expect their budgets to decrease in 2009, up from 41 percent in 2008. By contrast, only 17 percent expect their budgets to increase in 2009, up from 31 percent in 2008. Similarly, since 2008 budgets were first approved, far more saw decreases (38 percent) than increases (11 percent).
"This research offers perspective on the current business environment's impact on training budgets and how organizations are measuring their activities," said Ramesh Ramani, founder and CEO of Expertus. "With nearly half (48 percent) of respondents watching their budgets decrease for 2009, the challenge becomes measuring investments and understanding their impact."
As training budgets become more limited in today's challenging economy, it is increasingly important to demonstrate the impact of training funds through effective measurements. However, this survey of corporate training professionals revealed that volume and cost metrics, as well as Kirkpatrick Level I and II evaluations, are still used far more than business impact or return on investment metrics.
As a result, those metrics are seldom used to influence budget or other types of important decisions. However, when they are collected, cost, ROI and business metrics are almost always used to support budget requests.
"We weren't surprised that there is a connection between how difficult a metric is to collect and how often it is collected," added Doug Harward, CEO of Training Industry Inc. "However, we recommend that organizations make measuring the value and impact of learning a priority. This way, training organizations can make better-informed budgetary decisions about which training should be supported and which training needs to be improved."
In addition to reporting on budget changes and metrics use, this research report also provides fresh data on:
- How cost-reduction pressure is increasing.
- Major challenges of learning measurement.
- Types of decisions that are well-supported by learning metrics and reporting capabilities.
The survey was completed by 84 corporate and government training professionals in organizations with varying sizes throughout 19 industries. Technology companies represented 25 percent of all survey-takers, while banking and finance companies were represented by almost one in six respondents.
For more info: http://www.trainingefficiency.com/system/files/Survey+Results_Learning+Measurement_+Expertus_Nov08.pdf
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