What do the British Know About Training That We Don’t?

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May 27, 2010

Training and travel are two areas that most organizations cut deeply this past year during the recession, but here’s an interesting finding – British companies only cut training half as much as American companies did.

According to a new study by Bersin & Associates released earlier this month, organizations in the United Kingdom. cut their training and development budgets by 4 percent in 2009 compared to 11 percent by organizations in the U.S. This begs the question: so why the big difference?

“While the cuts were steeper in the U.S. last year, the study showed that U.K. organizations are certainly feeling the pinch as well,” says Bersin President Josh Bersin. “But we found that some organizations in the U.K. have used this recession as an opportunity to rethink priorities and find ways to add value – from changing development and delivery methods to restructuring their learning operations to redefine job roles. If organizations can carry these practices forward, they can emerge in a better position than before the cutbacks.”

In other words, British companies were a little more thoughtful about cutting training during a recession. That’s probably because training is one of the keys to an organization’s long term growth, and cutting it too much can hamper a company’s ability to recover once the recession starts to wane.

Another interesting finding in the Bersin survey is that U.K. companies are pushing to shift from formal training (mainly in a classroom setting) to more technology-based training efforts. A typical employee of a U.K. company spent 16 hours in formal training in 2009 compared to 12 hours per learner in the U.S. In addition, e-learning and virtual classroom training accounted for just 14 percent of all training hours consumed in the U.K. last year (by comparison, American companies deliver twice as much training through online methods). Bersin expects the use of technology-based training methods to increase in the U.K. (and elsewhere) as financial pressures continue.

Training budgets have taken a beating in the U.S., and earlier Bersin studies show that the corporate learning and development market in America dropped by 22 percent over the last two years. Josh Bersin’s perspective is that this has made U.S. companies wake up and “improve alignment with the business, centralize learning functions and focus on those training activities with the highest impact,” but it still raises the question – why have British companies decided to invest more by cutting less out of their training budgets?

It may take another year to get a reasonable answer to this question, but one thing is for sure: comparing how British and American companies handled their training budgets during this recession will surely be something that business students and MBA candidates study for years to come. And perhaps, we’ll finally get a good answer to the age old question – just how much is training really worth for an organization, anyway?