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Businesses Bring Learning and Development Back Home

Breanne Wilson
Oracle University SEO & Content Strategist

Written by Kate Farrow, Oracle University Senior Marketing Manager, EMEA

When the global economy entered a recession in 2008, the majority of businesses around the world were forced to make cutbacks to stay afloat.

Human resources departments were, as expected, heavily impacted, as businesses large and small re-evaluated their employee spend. These companies imposed hiring freezes and downsized departments to reduce total workforce costs.

Human resources departments and companies without advanced talent analytics found it hard to quantify the return on investment in staff training and to justify large investments in employee development.

As a result, learning and development (L&D) initiatives were among the hardest hit, as struggling businesses tried to minimize their per-employee costs during the economic downturn.

  • For example, by 2009, the UK had already seen a 4% year-on-year drop in total L&D spend, and training hours per employee would drop by 50% between 2009 and 20121.
  • This had a dramatic effect on outsourced learning providers, and particularly on those delivering instructor-led training (ILT), which still accounted for 77% of all training hours in 2009.
  • Indeed, as a total of L&D spend, outsourced training services would drop from 41% in 2009 to just 27% in 2012.

With similar trends taking place worldwide, large numbers of traditional training companies were forced to close business. But for many companies worldwide, training needs were actually increasing during this time, particularly across business support functions.

As companies stripped down to their core staff, IT personnel, like their HR colleagues, were finding themselves increasingly tasked to do more with less.

IT professionals who had spent years specializing in one technical area were forced to take on a wider variety of responsibilities, necessitating rapid acquisition of new technical skills and product expertise with minimal outlay on training services.

Recognizing these challenges, training companies like Oracle University responded by expanding the types, product range coverage, and technical levels of its online and digital courses.

This provided flexibility for IT staff who could not afford to wait weeks or months for the next classroom-based training, or to take time out of work to travel to day-long training sessions, of which perhaps only a part of the course might be relevant.

For L&D teams forced to cut costs, digital training had the added business advantage of saving the heavy training and travel expenses associated with offsite classroom-based learning.

As the global economy started to recover in 2012, companies began increasing L&D spend once again. In the UK, spend increased by 3% in 2012, and by 11% from 2014 to 2015. Training hours per employee also rose by 12% between 2012 and 2015, and training spend per employee has increased to more than $1,500 last year. But where did the money actually go?

Not, as many had anticipated, to third party training companies. These saw a continued drop in percentage of overall L&D spend to just 14% in 2015—nearly half their share of the 2012 spend, and three times less than in 2009!

Instead, businesses turned their L&D investments inward, increasing their ratio of L&D staff to employees by 50% between 2012 and 2015, and investing in advanced talent management software.

With L&D staff back in-house, armed with increasingly feature-rich analytics tools, companies could focus on learning initiatives in a way they never could before. With detailed insight into their talent pool and its development, they became far better at monitoring the business effects of training, and subsequently at justifying and prioritizing L&D spend.

In addition, the increase in L&D staff meant that businesses could more effectively drive learning cultures within their respective organizations.

Today, Instructor-led Training is still the primary delivery method in countries with mature L&D markets, accounting for the highest number of total training hours—but digital training is rapidly gaining ground.

In the UK for example, ILT has dropped to just 32% of all training hours—a 45 percentage point decline since 2009—while digital training continues its climb, now with more than a 25% share.

L&D teams have increasingly recognized that ILT frequently fails to meet the learning objectives of all participants—due to differences in participants’ experience, technical abilities, job functions, and, sometimes, language knowledge.

Tellingly, ILT is a highly developed market, having taken years to optimize its learning methodologies, styles, and formats, and yet it is still unable to cope with the above challenges of individualized learning.

By contrast, digital learning is a rapidly developing market which has undergone recent dramatic improvements in terms of content and delivery options.

For example, it is now far easier for online learners to find and jump to sections of a course relevant to a current business need, without needing to sit through the entire course.

This is particularly advantageous for technical staff, and enables learning to be individualized, as participants are free to go at their own pace, and in their language of choice.

Informal learning methods such as on-the-job training, collaboration and feedback have also become increasingly prevalent, as in-house L&D teams drive the impact of continual experiential learning and professional mentoring.

When comparing the time currently allocated to each delivery method, we see that L&D professionals are seeking a balance in training initiatives, with the ability to reach individual employees in diverse and complimentary ways—supported by advanced talent management analytics that enable businesses to align training with industry norms.

Oracle is, once again, uniquely positioned to respond to current business trends.

Alongside its industry-leading talent management software that empowers L&D analytics, Oracle University continues to expand the quality, depth, flexibility, and cost efficiency of its digital learning programs in anticipation of the continued global proliferation of the Internet and of businesses turning to cloud-based learning solutions.

As the economic recovery continues, businesses are continuing to turn to Oracle University as they realize the measurable benefits of bringing L&D back home.

1 All figures mentioned in this blog have been retrieved from the UK Learning Factbook 2016: Benchmarks,
Trends, and Analysis of the UK Training Market, Bersin by Deloitte.

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Comments ( 1 )
  • Ahmed Amer Friday, April 15, 2016

    good


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