The Road to Recovery

Investment in training and development is increasing after notable declines in 2009. Learning technologies continue to be a priority compared with most other spending alternatives, but content development and learning strategy are returning to the top of CLOs’ investment priorities.

Every other month, IDC, a research and advisory services firm, surveys Chief Learning Officer magazine’s Business Intelligence Board (BIB) on a variety of topics to gauge the issues, opportunities and attitudes that are important to senior learning and development executives. For the last several years, members have been asked to provide insight into their investment choices. This month we look at how companies are investing their learning dollars and where spending is expected to change between 2011 and 2012.

A large percentage of firms changed their spending between 2008 and 2010, dropping and boosting budgets in reaction to the global financial crisis. According to the data, most enterprises expect to continue their investment in learning management systems, assessment systems and performance management capabilities but are also eager to try new delivery modalities such as simulations, mobile learning and collaboration and social tools.

Budgets Increased Over 2010

After two years of decline, more than half of CLOs reported their 2011 budgets are higher than 2010. After a trough of spending in 2009, when more than 40 percent of CLOs reported their budgets would be less than the prior year, spending is recovering.

More enterprises report their budget increased in 2011 than in any year since 2005, when Chief Learning Officer magazine began collecting this information. Some of this is catch-up spending as firms are reinstituting spending on core activities cut during the downturn, and some spending is in reaction to changing priorities and opportunities (Figure 1).

Interestingly, after an average decline of about 14 percent from 2009 to 2010, CLOs are reporting an average increase of about 8.5 percent. But the good news isn’t universal: The average for those firms that reported a decline was a 12 percent drop. Clearly, not all organizations are seeing a rebound.