2021 Training Industry Report

To see the full report, visit:

https://pubs.royle.com/publication/?m=20617&i=727569&p=20

ABOUT THIS STUDY

Now in its 40th year, The Industry Report is recognized as the training industry’s most trusted source of data on budgets, staffing, and programs. This year, the study was conducted by an outside research firm April-July 2021, when members from the Training magazine database were e-mailed an invitation to participate in an online survey. Only U.S.-based corporations and educational institutions with 100 or more employees were included in the analysis.

The data represents a cross-section of industries and company sizes.

Note that the figures in this report are weighted by company size and industry according to a Dun & Bradstreet database available through Hoovers of U.S. companies. Since small companies dominate the U.S. market, in terms of sheer numbers, these organizations receive a heavier weighting, so that the data accurately reflects the U.S. market.

About Survey Respondents:

• 61% are managers or above in the organization
• 19% are developers or instructional designers
• 19% are mid- to low-level (based on title selection) associates
• 67% determine the need for purchasing products and services
• 26% set the budget
• 36% manage requests for proposals/bids
• 68% recommend the purchase
• 25% have the final purchase decision

TRAINING EXPENDITURES

Focused on virtual learning and employee well-being and retention during the continuing COVID-19 pandemic, U.S. training expenditures rose nearly 12 percent to $92.3 billion in 2020-2021. A major factor in that increase: The number of companies in the Dun & Bradstreet database used to calculate overall U.S. training expenditures jumped by 15 percent. And training payroll rocketed 62 percent to $68.7 billion. Spending on outside products and services declined 24 percent from $10.7 billion to $8.1 billion, while other training expenditures (i.e., travel, facilities, equipment) decreased to $15.5 billion from $29.4 billion last year.

As noted above, the training expenditure figures were calculated by projecting the average training budget to a weighted universe of 150,653 companies, using a Dun & Bradstreet database available through Hoovers of U.S. organizations with more than 100 employees.

Note: Although small companies have the smallest annual budgets, there are so many of them (131,628) that they account for almost one-third of the total budget for training expenditures.

DEFINITIONS

• Total training spending: All training-related expenditures for the year, including training budgets, technology spending, and staff salaries.
• Training staff payroll: The annual payroll for all staff personnel assigned to the training function.
• Outside products and services: Annual spending on external vendors and consultants, including all products, services, technologies, off-the-shelf and custom content, and consulting services.
• Average training expenditures for large companies decreased from $22 million in 2020 to $17.5 million in 2021. The number for midsize companies increased from $808,355 in 2020 to $1.3 million in 2021. Small companies dropped from $506,819 to $341,505 in 2021.

Some 23 percent of organizations said they increased staff from the year before, while 59 percent said the level remained the same. Some 18 percent said it was lower, down from 23 percent in 2020. Large services organizations and midsize government/military and education organizations had the largest personnel costs. This year, midsize companies spent only one-sixth as much as large companies, while small companies spent about one-quarter as much as midsize ones. The average payroll figure for large companies was $7.6 million; for midsize organizations, it was $1.2 million; for small companies, it was $288,568.

For those who reported an increase in their training staff, the average increase was 15 people, up from 10 in 2020. For those who reported a decrease in their staff, the average decrease was 43 people—up from 11 last year.

Other training expenditures decreased this year to $15.5 billion from $29.4 billion in 2020. Such expenditures can include travel, training facilities, in-house training development, and equipment. On average, organizations spent 11 percent of their budget or $337,190 (down from $708,255 last year) on learning tools and technologies. Large services organizations had the largest budgets for learning tools ($2.3 million). Midsize education organizations had the largest tool budget in their size range ($387,000).

Looking ahead, the most frequently anticipated purchases are authoring tools/systems at 39 percent vs. 37 percent last year; online learning tools and systems and learning management systems (35 and 34 percent, respectively, vs. 40 percent and 41 percent, respectively, last year); and content development (33 percent in 2021 and 34 percent in 2020). This is followed by classroom tools and systems (27 percent vs. 26 percent last year); certification at 26 percent vs. 23 percent last year; presentation software and tools (25 percent vs. 21 percent last year); games and simulations at 21 percent vs. 19 percent in 2020; and course-ware design (20 percent vs. 23 percent last year). Augmented/virtual reality tech comes in at 10 percent. Categories receiving less than 10 percent of hits include audience response systems, customer relationship management, enterprise learning systems, training management administration, and translation and localization.

Overall, on average, companies spent $1,071 per learner this year compared with $1,111 per learner in 2020. Government/ military organizations spent the most per learner this year ($1,483), followed by manufacturers/distributors ($1,373). Large companies spent less ($722) than midsize ($902) and small ($1,433) companies.

While spending a bit less per learner, companies provided more hours of training than last year. On average, employees received nearly 64 hours of training per year, compared to 55.4 hours last year. Large companies provided the most hours of training this year (78.1). Large retailers/wholesalers had the highest average number of hours overall (266).

Companies continued to devote the bulk of their training expenditures to training non-exempt employees (41 percent in 2021 vs. 45 percent in 2020).

TRAINING BUDGET

This year, the number of companies reporting that their budgets increased rose 9 percent to 32 percent. Those indicating their budgets decreased fell to 21 percent from 28 percent in 2020. Some 47 percent said their budget remained the same vs. 49 percent in 2020. Education organizations showed the greatest tendency for budget cuts, while retailers/wholesalers showed a greater tendency for gains. Increases were not evenly distributed across organization sizes. Large companies showed the greatest number of decreased budgets (35 percent vs. 13 percent for midsize companies and 23 percent for small ones).

Most of the budget increases were modest—less than 16 percent. Some 51 percent saw increases in the 6 to 15 percent range (vs. 29 percent last year), while 21 percent of organizations reported increases in the 1 to 5 percent range compared with 36 percent last year. Some 29 percent reported increases in the 16-plus percent range (vs. 35 percent in 2020). Most respondents who reported an increase in their training budgets attributed it to the following reasons:

• Increased scope of training programs (59 percent vs. 64 percent last year)
• Purchased new technologies/equipment (50 percent vs. 47 percent in 2020)
• Added training staff (45 percent vs. 47 percent last year)
• Increased number of learners served (38 percent vs. 42 percent last year)

This year, nearly half of the respondents who reported budget decreases cited a drop of more than 16 percent. Some 28 percent reported budget decreases between 6 and 15 percent (vs. 36 percent last year) and 23 percent cited 1 to 5 percent decreases vs. 14 percent in 2020. Some 76 percent cited budget cuts due to COVID-19 for the decrease compared with 67 percent last year. Some 39 percent noted attendance at fewer outside learning events vs. 16 percent last year. This was followed by:

• Decreased outside trainer/consultant investment at 22 percent vs. 11 percent last year
• Reduced training staff or decreased number of learners served (18 percent for both vs. 24 percent and 11 percent, respectively, last year)
• Other reasons such as lower learning management system costs and staff pay, reduced revenue, and eliminated residential training (16 percent vs. 13 percent in 2020)
• Decreased scope of training at 10 percent vs. 11 percent last year

Like the last nine years, the highest percentage of organizations (31 percent) said management/supervisory training will receive more funding than the year before, but all the other categories followed closely behind, including: onboarding (25 percent); interpersonal skills (23 percent); mandatory or compliance training (18 percent); executive development and customer service training (both at 16 percent). On average, organizations plan to allocate the most funding to profession/ industry-specific training ($2.1 million); management/supervisory training ($423,312); and mandatory compliance training ($357,824).

The highest priorities for training in terms of allocating resources in 2022 are: increasing the effectiveness of training programs (31 percent vs. 30 percent last year); increasing learner usage of training programs (19 percent vs. 17 percent); and measuring the impact of training programs (17 percent vs. 12 percent). Obtaining revenue through external training remains a low priority at 1 percent.

TRAINING DELIVERY

In terms of training delivery post-pandemic, the majority of respondents (56 percent) indicated they plan to return to some classroom training while maintaining some of the remote learning instituted during the crisis.

This year’s survey once again included three questions to help understand the effects of the COVID-19 pandemic on training delivery. The highest percentage—33 percent—said no training was put on hold due to the pandemic vs. 14 percent last year. Some 25 percent said 1 to 10 percent of training was put on hold vs. 18 percent last year. This was followed closely by 11 to 25 percent of training (23 percent vs. 19 percent last year). Some 13 percent said 51 to 75 percent was put on hold (the same as last year), while 6 percent of respondents indicated more than 75 percent of training was put on hold (vs. 16 percent in 2020).

In terms of the biggest training challenges during the pandemic, the top choice was getting people engaged in remote training at 31 percent (up from 19 percent last year), and lack of resources/personnel at 24 percent (compared to 13 percent in 2020). This was followed by converting content to digital format (16 percent, down a bit from 18 percent last year) and technology/ramping up remote training at 15 percent, down from 28 percent in 2020. Like last year, organizations did not seem as concerned about assessments/evaluation (5 percent vs. 4 percent last year) or data security (2 percent vs. 3 percent in 2020).

Some 8 percent of respondents chose “Other” in answer to the challenge question, with answers such as:

• Timing, working in pod rotations where some staff are working in person while others are working remotely, and staffing challenges when there was a COVID-19 exposure sending many staff home, creating staffing challenges. Being suddenly short on staff means you can’t afford to send people to scheduled training.
• Competing demands such as increased tasks that are unique to COVID-19.
• Transporting materials that could not be converted to virtual delivery.

Looking ahead at organizations’ plans regarding training delivery post-pandemic, the majority (56 percent, up from 54 percent last year) indicated they plan to return to some classroom training while maintaining some of the remote learning instituted during the crisis. Some 8 percent said they plan to return to classroom training as usual (down from 12 percent last year), while 17 percent said they would maintain the remote learning instituted during the pandemic and create new classroom training (up from 11 percent in 2020). Another 15 percent indicated they would stay the current course and maintain the remote learning instituted during the pandemic (up just a bit from 14 percent last year).

Some 43 percent of hours were delivered with blended learning techniques, up from 33 percent last year.

• Virtual classroom/Webcasting accounted for 37 percent of hours delivered, up from 23 percent in 2020. Some 34 percent of hours were delivered via online or computer-based technologies, up from 29 percent last year.
• 30 percent of training hours were delivered by a stand-and-deliver instructor in a classroom setting—down from 40 percent last year as the pandemic continued.
• 4 percent of training hours were delivered via mobile devices, down from 10 percent in 2020. This year, 9 percent of training hours were delivered via social learning (vs. 3.5 percent last year). New technologies such as augmented reality (1 percent), virtual reality (2 percent), and artificial intelligence (3 percent) were not widely used but did all increase slightly in usage from 2020.

Blended learning is used exclusively or mostly (90 to 100 percent of the time) by 15 percent of the organizations. More companies (50 percent) use it for 10 to 29 percent of their training. Most organizations are using a mixture of blended learning, instructor-led, virtual classroom, and online methods.

Mandatory or compliance training continued to be done mostly online, with 91 percent of organizations doing at least some of it online and 50 percent entirely online (up from 42 percent last year). Online training also often is used for desktop application training (80 percent), profession/ industry-specific training (77 percent), IT/systems training (76 percent), onboarding (74 percent), customer service training (69 percent), sales training and interpersonal skills training (both at 67 percent), and management/supervisory training (65 percent). Online training was least used for executive development (54 percent).

In terms of technology usage, of the 12 learning technologies presented, the most often used included:

• Learning management systems (LMSs) at 90 percent, up from 84 percent last year, followed by virtual classroom/ Webcasting/video broadcasting at 88 percent (up from 83 percent last year). Some 98 percent of large companies and 96 percent of midsize ones currently use LMSs vs. 80 percent of small companies.
• Rapid e-learning tools (43 percent, down from 46 percent last year)
• Mobile applications at 30 percent (down from 43 percent in 2020)
• Application simulation tools (25 percent, down from 30 percent last year)
• Learning content management systems (LCMSs) at 20 percent (down from 31 percent last year)
• Online performance support (EPSS) or knowledge management systems at 20 percent (down 7 percent from last year)
• Podcasting at 22 percent (down slightly from 24 percent last year)

The delivery methods least often used for training remained the same as last year:

• Virtual reality at 6 percent (down from 9 percent last year)
• Augmented reality at 5 percent (up from 4 percent in 2020)
• Artificial intelligence at 6 percent (the same as last year)

Large companies appear more inclined to experiment with these new technologies than small or midsize organizations: Some 16 percent of large companies currently are using virtual reality, 19 percent are using artificial intelligence, and 13 percent are using augmented reality, while 5 percent or less of midsize companies and 3 percent or less of small companies are using any of those three technologies.

TRAINING OUTSOURCING

2021 saw a decrease in the average expenditure for training outsourcing: $379,038, down from $417,375 in 2020. Large companies on average spent $1.7 million vs. $108,263 for midsize companies and $24,996 for small ones. An average of 7 percent of the total training budget was spent on outsourcing in 2021 vs. 11 percent in 2020.

On average, 23 percent of companies mostly or completely outsourced LMS operations/hosting (down from 26 percent last year), while learner support and LMS administration largely were handled in-house (84 percent and 89 percent, respectively).

More instruction/facilitation is outsourced than handled in-house (63 percent vs. 37 percent). Across all the topic areas, small and midsize companies outsourced about the same, and large companies somewhat more. In the areas of custom content development and learner support, the larger the company, the greater the outsourcing.

The level of outsourcing is expected to stay relatively steady in 2022—some 87 percent of organizations said they expect to stay the same in the outsourcing area. The percentage of companies expecting to increase outsourcing (8 percent) is slightly higher than those expecting to use outsourcing less (5 percent). More than half (59 percent) of respondents said they don’t plan to outsource learner support or LMS administration in the next 12 months.

With respect to company size, large companies expect a bigger increase in outsourcing than either small or midsize companies. Midsize and small companies are more likely to report that they don’t and won’t outsource.

For 2022, large companies expect a bigger increase in outsourcing than either small or midsize companies. Small and midsize companies are more likely to report that they don’t and won’t outsource.