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In The News

Published March 2007

Survey: 40 Percent of Companies Spend up to Half of Training Budgets on Administration

  

  MediaTec Publishing

Administrative expenses are high for most organizations in terms of training budgets, according to a survey by Expertus and TrainingOutsourcing.com.

The former is a provider of strategic training outsourcing services, and the latter offers guidance and consulting to buyers and sellers of outsourcing services.

This is the fifth survey in a series of six the companies have released, and its purpose was to examine training administration and operations. All the surveys in the series have been designed to provide market data on all aspects of today's corporate training challenges.

For this survey, the questions addressed issues such as administrative functions performed, biggest challenges, management of services, percentage of budget spent on administrative services, planned spending increases and use of outsourcing.

Results from the survey include:

• 7.3 percent of respondents said their companies spent more than 50 percent of their budgets on administration and operations
  • 10 percent spent between 36 percent and 50 percent
  • 30 percent spent between 20 percent and 35 percent
• 14.7 percent of respondents said administrative-related spending was too high, and 65 percent said it was "about right"
• About 60 percent of respondents said administrative and operational spending will increase over the next two years
  • 15.7 percent said it will remain the same
  • 5.4 percent said it will decrease
  • 18.4 percent said it will fluctuate
• More than 70 percent of respondents said upgrading technology would make the biggest improvements to administrative efficiencies
  • 34.7 percent said adding staff members would help improve efficiency
  • 28.4 percent said increasing staff training would help improve efficiency
• 57.4 percent cited heavy workloads as an administrative challenge
  • 46.6 percent cited inadequate technical support
  • 40.4 percent cited a limited budget
  • 39.9 percent cited a lack of qualified personnel

"Training administration consumes way too many dollars in most companies, and despite the spending, there are still high levels of dissatisfaction in the services provided," said Mohana Radhakrishnan, Expertus vice president of client services. "The even bigger problem is that every dollar spent on administration is a dollar less spent on actual training. Employee development has a positive bottom-line impact, while administrative expenses have no incremental value.

"We believe training administration and operations are areas where most companies - no matter their size - can gain significant efficiencies. As seen in this survey, most companies view these expenses as necessary and fixed. However, we've seen companies reduce administrative expenses by as much as 55 percent to 60 percent through the effective use of technology, personnel resources and shared services."

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