ASTD’s 2007 State of the Industry Report estimates that U.S. organizations spent $129.6 billion to improve the knowledge and skills of their employees in 2006. This estimate includes the cost of the internal learning function, salaries and travel of participants, external services, and tuition reimbursement. Spending on the function appears to have stabilized over the past few years.
I applaud the continuing substantial investment in training (ASTD calls it “learning and development”, but we don’t know if employees are learning or developing, so I call it “training”.) activities which demonstrates a commitment to employees. However, I believe most of that investment continues to be wasted. It is spent on delivery, not on results. The best estimates of important business results from training and development continue to be in the 10% to 20% range. Eighty to 90 percent of participants in these programs fail to apply their learning to achieve valuable results for their organizations! Using the ASTD estimate of spending, this means that roughly $104 to $117 billion is being wasted each year. That’s the number that interests me most. The key question for me is, “What do we have to do to ensure that more of this investment in training and development contributes to business results?” And until we shift our focus, we won’t know if organizations should be spending more or less on training.