Yikes. Training spending up 9.5%, highest increase in 3+ years! A renaissance.

Wow.  After more than three years of decline in spending, corporate training budgets just jumped up 9.5% last year.  (Just released, 2012 Bersin & Associates Corporate Learning Factbook®).  Good news for corporate HR teams and business leaders in general.

This is a huge increase, bringing the average spending per employee to over $800, or $1021 in the High-Impact Learning organizations.  In addition, spending on “informal learning” or social learning doubled this year over last, further reinforcing our thesis that corporate L&D is undergoing a true renaissance.  What do I mean by a renaissance?  I mean corporate training is truly entering a new, culturally important era – the era of continuous learning environments (also known as “informal or social learning”).

Why the huge increase in spending?  Several important reasons (you can download the executive summary for more details), many of which are discussed in our predictions for 2012.

First, companies really are hiring again, and they’re finding it harder than ever to source the right talent. SHRM’s latest  data on manufacturing hiring shows that employers are having the toughest time finding manufacturing workers in 4 years, and SHL’s latest survey on employee assessment shows that 63% of employers expect a very tough time finding key skills in 2012, a 22% increase over last year. As we discuss in our research, there is a growing imbalance in skills in the world, and employers now realize they have to build skills internally.

Second, we’ve cut training to the bone.  Cutting training spending is often an easy thing to do, but it usually turns out to be a dumb decision.  Why?  Because well-run training programs actually save money. Consider what happens when you do away with formal corporate training. People don’t stop needing new skills, they just get them on-the-job (or not at all). This means every cut in training dollar pushes more training workload onto the back of line managers – who have to pick up the slack. That’s not to say that all training programs are great, but when they are they are some of the highest ROI investments a company can make.

Third, the training department of today is truly different. Today we have a whole new breed of training strategy taking form – one which builds a “continuous learning environment” – formal, informal, on-the-job, mobile, and social learning all blended together. Our latest Learning Leaders winners (you will read about them this month) demonstrate some of the most exciting, business-integrated, performance-driven learning solutions I have ever seen. This is the renaissance I’ve been talking about.

I’m over in Europe this week meeting with some companies like BT who are doing a whole research project on how to bring greater “reflection” into their workforce. Reflection simply means giving people the time, support, and reinforcement to “learn on the job” – one of the key practices we identified in our High-Impact Learning Culture research. Time and space to reflect is part of this “renaissance” I talked about earlier, and it’s one of the most powerful tools you have to build organizational capability.

This is very positive news for the business environment in general and HR and L&D in particular. The training industry is back with a vengeance, and we will see some very exciting new solutions come to market in 2012!

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