South-Western - Management  
The State of Training and Development: More Spending, More Scrutiny
Topic Training and Development
Key Words Training and development, e-learning, accountability, training effectiveness
News Story

Companies seeking to gain an advantage through better trained and better developed workers are using everything from e-learning to leadership programs to multicultural training to help them to gain that edge. They are spending more money and demanding better accounting of results.

The American Society of Training and Development's recent State of the Industry Report shows that annual spending on training and development per employee has risen from $649 in 2000 to $1,000 in 2005. The average annual number of learning hours per employee has increased from 24 in 2000 to 34 in 2005, with training and development budgets typically accounting for about 2.25% to 3% of payroll. .

The report also showed that the amount of training developed by outside vendors has increased, but the majority of training is still developed in-house.

Corporate executives are increasing their demands for proof that training dollars produce results. Many large companies have hired chief learning officers to help them to achieve their learning and development goals and to track accountability. The University of Pennsylvania is even launching a doctorate for this new specialty.

Wal Mart has completely overhauled its massive training department in an effort to show that training is an investment and not an expense. Right now, their efforts are focused on domestic operations. However, as Wal Mart and other large companies spread around the globe, they will need to find ways to deliver learning domestic training programs overseas. Vendors with international experience will probably be in high demand as globalization continues to be a trend.

Globalization affects training trends, but technology, market forces, an aging workforce, increasing competition, and other factors have to also be taken under consideration, requiring constant updating to training programs. Training also has to be looking to the future to train for jobs that will be there tomorrow

The company is now focusing on employee selection. Their Vice President of Performance and Development, Chuck Wensing, says that the company can train skills but it is more difficult to teach a person to smile and be upbeat. These are traits that can be identified in the selection process. The company is in the process of identifying what traits make a good Cheesecake Factory employee, one who thrives and stays in the environment. The hope is that better selection can further help to decrease turnover rates as the company continues its astronomical growth.

Questions
1.

Corporate executives are spending more money on training and development of employees but they are also demanding to see that the training is producing results. What are some measures that can be used to determine that the money spent on training is delivering results?

2.

The article states that Wal-Mart is attempting to show that training is an investment and not an expense. What does this refer to?

3.

More companies are hiring Chief Learning Officers (CLOs). What responsibilities would a CLO have? What business trends have brought about the need for this executive position?

Source "The State of Training and Development: More Spending, More Scrutiny " Workforce Management, May 22, 2006, pp. 25-26.
Instructor Discussion Notes Discussion Notes
These notes are restricted to qualified instructors only. Register for free!

Return to the Training and Development Index

©2006  South-Western.  All Rights Reserved     |