Study Shows Corporate Learning & Development More Aligned to Business Goals

In more than 73 percent of 563 responding organizations, L&D strategies are driven to a high or very high extent by the need to align business, HR, and learning needs, according to Brandon Hall Group’s 2014 Learning & Development Benchmarking study.

Learning & Development (L&D) has come of age. No longer seen as a cost center on the margins of an organization, L&D has taken center stage as a mission-critical part of the enterprise, according to Brandon Hall Group’s 2014 Learning & Development Benchmarking study.

For example, learning strategies are highly aligned to business goals in 73.4 percent of the 563 organizations surveyed. L&D spending now is more likely to be controlled from the C-suite (45.9 percent of organizations) than by HR and by business unit leaders (36.9 percent of organizations).

In analyzing the survey results, we uncovered several major trends, and a few supporting trends:

1. Approximately half of organizations surveyed are already what we would call Learning Organizations. These organizations have established a culture of learning aligned with business goals and corporate performance. Characteristics include:

  • A defined learning strategy
  • Alignment of L&D objectives with performance goals and strategies of their organizations
  • C-suite executives primarily responsible for developing the learning strategy and the L&D budget
  • A centralized learning function
  • The same CLO in place for more than six years

2. There is a strong correlation between Learning Organizations and High-Performing Organizations. Some 53.6 percent of organizations fit the definition of high-performing organizations—increased revenues and most key performance indicators or priority performance measures moving in a positive direction. Some 50.8 percent of organizations meet the high-performing characteristics and those of a Learning Organization. This means that a strong learning culture linked to business and performance goals is a significant contributor to an organization's ability to drive business results and perform at a high level.

3. Performance-based and competency-based learning is becoming the predominant approach to learning as L&D aligns with business strategy and goals. Some 76.1 percent of organizations link learning objectives to corporate performance goals to at least a moderate extent, and 43.5 percent to a high or very high extent. Today, what you can do has greater weight than what you know, whereas previously knowledge had the high bar.

4. Organizations are focusing most heavily on learning delivery that appeals to their Millennial workforce. Millennials strongly prefer more personalized, just-in-time learning methods, and organizations are responding. The delivery methods most often cited for more use in the next 12 months are online learning modules (65.2 percent), social collaboration and learning tools (50.6 percent), online performance support (49.8 percent), online videos (49.6%), and coaching and mentoring (48.8 percent).

The survey also found several additional supporting trends:

  • C-suite executives—especially CLOs and CEOs—are more than three times more likely than HR heads or business unit leaders to be primarily responsible for setting the Learning & Development strategy.
  • Social learning technologies, video, and online Electronic Performance Systems (EPS) increasingly are part of blended learning programs and provide more ongoing support after the initial learning experience. This trend supports the idea that learning is no longer an event. The event is only the starting line on a longer continuum as learners go back to work to adopt and adapt what they learned. It has become critical to support learners along the entire continuum.
  • Measuring the impact of learning is running far behind other elements of corporate learning evolution. The majority of organizations are still not going beyond the relatively useless Level 1 on the Kirkpatrick Scale for learning measurement, developed in the 1950s. This tells us that while learning is more aligned with business needs than ever before, effective measurement of progress and success is still elusive.
  • Total integration between learning and other talent management systems is still relatively rare, but increased integration over the next 12 months is a priority for most organization and most often is focused on performance management (56.3 percent), leadership development (52.7 percent), and competency management (46.3 percent).

Learning & Development Strategy

A majority of the organizations surveyed (55.3 percent) have a formal learning and development strategy. This indicates that L&D is more mature than some other talent processes studied by Brandon Hall Group, such as leadership development, where 44 percent of organizations surveyed last year had a well-defined strategy, and talent acquisition, where 35 percent of organizations surveyed earlier this year said they had a strategy.

One of the most important findings from the study, indicating that L&D as a part of the business strategy has reached a tipping point, is that C-suite executives—and CLOs in particular—have primary responsibility for developing the L&D strategy in 52.1 percent of organizations. HR heads and business unit leaders are each responsible for L&D strategy in 16.5 percent of organizations.

Who is primarily responsible for developing the L&D strategy?

CEO: 8.7%

CLO/Head of Learning: 39.2%

Chief Talent Officer: 4.2%

Head of HR: 16.5%

Business unit leaders: 16.5%

Don’t know: 2.7%

Other: 12.3%

About half of organizations surveyed (47.7 percent) said their learning strategies have been in place for three or more years, and about one-quarter have had their strategies in place for five years or more. This indicates that the learning function is maturing in many organizations, which means that learning should have more impact on business results in the years ahead.

However, less than 18 percent of organizations have reviewed or revisited their strategies at least annually over the last five years, and 28.8 percent have revisited strategies once or not at all in the last five years. This indicates that learning still has a ways to go to be a full partner in driving business results. For instance, it’s difficult to imagine sales and marketing strategies only being reviewed and built upon once or twice in five years. This tells us that many organizations are still creating their L&D based on learners’ needs that may or may not be aligned with the corporate strategy.

In more than 73 percent of organizations, L&D strategies are driven to a high or very high extent by the need to align business, HR, and learning needs. This again indicates that L&D has become more important to the business but also that L&D organizations are still working hard to get aligned with business needs. They are not there yet.

To what extent are the following considered drivers for the existence of your organization’s learning & development strategies:

Prioritize business needs and align business, HR, and learning strategies: 73.4%

Analyze L&D needs: 54.0%

Develop strategies for addressing L&D needs: 55.7%

Evaluate L&D: 36.5%

Strengthen ethics and governance: 43.1%

Promote strong financial management: 41.1%

Survey Methodology

Conducted in December 2013 and January 2014, the online Learning and Development Benchmarking Survey garnered 563 responses from a variety of industries and company sizes. The survey included 45 questions, including demographic questions. About 63 percent of responses came from the United States. About 19 percent of responses came from Australia, India, Canada, and the United Kingdom, with the remainder spread between 27 other countries. Responses were relatively evenly split between small (less than 1,000 employees: 38.2%), mid-sized (1,000-10,000 employees: 27.2%), and large (10,000-plus employees: 34.6%) organizations.

David Grebow is principal learning analyst for Brandon Hall Group, a research/analyst firm with practices in Learning & Development, Talent Management, Leadership Development, Talent Acquisition, and Human Resources.

Training Top 125

Minneapolis, MN (November 18, 2014)—Training magazine, the leading business publication for learning and development professionals, today announced the finalists for the annual Training Top 125, which ranks companies’ excellence in employer-sponsored training and development programs.

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