Yes, You Really Can Cut Training Costs

Posted on January 17th, 2009.

The Training Measurement Book is on Amazon’s Top 10 Business Books for 2008

This week we published the Corporate Learning Factbook® for 2008 and sure enough, corporate learning and development budgets are being cut everywhere. The Factbook shows spending reduction of 11%, and our Winter TalentWatch research, which isolates spending changes by industry, is also showing a significant drop. Two of our research members mentioned it in briefings this week, so I thought I’d post some important topics to consider:

1. Cut Travel and Implement Rapid E-Learning.

The most obvious and simple way to reduce training expenses is cancel classroom programs and replace them with rapid e-learning. Today you can build online training directly from PowerPoint, add audio and even video, with no real training at all. The top tools for PowerPoint-based rapid e-learning include Articulate, Adobe Publisher, Brainshark, SuddenlySmart, as well as new tools from Flypaper and Altus.

People are very ready for this type of media. I just finished a conversation with the CLO of a large insurance company and he told me that “no one even wants to go through e-learning programs any more, they just want Brainshark videos.” Yesterday’s page-turning e-learning now feels like it is ancient – rapid e-learning based on PowerPoint will fit the bill for many operational training programs.

Virtual online learning should be your next big thrust: if you do not yet have a standard virtual classroom or collaboration system (Webex, Interwise, GotoMeeting, Adobe Connect, i-Linc are all fantastic systems) you must adopt it now. Excellent instructors and subject matter experts will deliver training of equal or higher value through virtual online programs if you just give them some coaching on how to use the system.

2. Identify your “Upper Right Quadrant” programs, and cut back the others.

More than three years ago we first published The Training Investment Model®, which is a simple framework and methodology to help identify the most strategic, high-value training programs in your portfolio.

The Training Investment Model

Fig 1: The Training Investment Model

By sitting down with your L&D department and selected business leaders, you can segment your programs in this grid (we can help you do this), and then start cutting, eliminating, or outsourcing the programs in the bottom left.

3. Implement a Simple, Pragmatic Training Measurement Program

In all the years that I have studied training measurement, now is the clearest and most important time than ever to start measuring training. My advice is to keep it simple, and read my book to give you the guidelines.

(By the way, The Training Measurement Book was rated among Amazon’s Top 10 Business Books for 2008)

The simplest form of measurement (enrollments, utilization, satisfaction) will help you make decisions, but more importantly if you measure alignment (part of our 9-part model) it will be very easy to tell which programs you can live without for a year or two.

4. Consider Staff Cuts As the Last Step

Finally, let me add that many of my best friends in the L&D marketplace are currently looking for work. While staff cuts are often necessary to reduce costs, remember that in most training organizations the program management and development staff is less than 30% of total costs. I recommend you try to cut trainers and program dollars first, and then staff later. You need the strategic L&D people to continue their work in performance consulting, program strategy, and talent-driven learning programs.