While the corporate-training market has lagged behind other education-based sectors, it continues to represent a viable investment opportunity.
The Corporate-training market is among the most cyclical within the education industry. This industry experienced a low point during the period 2009 to 2010. Since 2010, employers’ total spending on training and the amount spent per employee -- the key data used to measure this sector -- have been declining. It’s also important to note that the size of this market is generally calculated to include corporate spending on facilities, salaries and overheads. In addition, there is often no distinction between in-house sourcing and outsourcing of the E-Learning resources. In recent years, most of these assets have been drastically cut within Organizations (when considering all training services). Nevertheless, according to most observers, the corporate market related to outsourced services (net of all ancillary costs) has not stopped growing in recent years. Indeed, the percentage of outsourced services has grown to reach 42% of total expenditure.
Within the training industry, the E-Learning sector has grown consistently in recent years. All its subsectors (Packaged Content, Platform, and Authoring tools) show positive annual growth. E-Learning platforms are leading the market – especially those using the “hosted” formula. In second place are content-ready courses available for immediate E-Learning delivery.
While these statistics relate to the overall market, it’s important to recognize the difference in buying patterns in different countries. This is crucial when analyzing the nature of the buyers -- for example, differentiating between buyers in private companies and educational institutions. In non-mature markets, especially where the educational component is dominant in E-Learning (including workforce training projects rolled out at a national level), the main area of focus is foreign language knowledge. In these markets, the most interesting recent trend is the shift from a pure consumer market, in which the majority of the content is imported from abroad (from the more mature markets), to a market where domestic suppliers have started gaining market share. In mature markets, large companies are making the most impact despite the long buying cycle.
They can be early adopters since their content and related training programs cover such subjects as Management, Compliance and IT, as well as specific industry-related courses. According to ASTD, Organizations are becoming more demanding when it comes to training and, specifically, more innovative methods such as E-Learning. Although the number of learning hours used per employee doesn’t show linear growth, in the long-term it has generally increased -- as has the average percentage of formal learning hours conducted using technology-based models. Interestingly, award-winning Organizations, which tend to be numbered among the world’s top companies, are seen as the most demanding in terms of training systems. They are also much more open to embarking on E-Learning projects.
BEST: award-winning Organizations G500: companies recognized in Fortune magazine’s Global 500 The heart of this topic is that education has positive implications for both the company and the employee. The depth of this impact strongly depends on the company’s industry. It is not surprising that the technology sector, for example, places a great deal of emphasis on innovative training, and views success in this industry as being highly dependent on properly trained employees. Simultaneously, E-Learning penetration in corporations is increasing, regardless of the company’s size. Since class-based training is more expensive, proportionately, for small and medium-sized firms, these firms are increasingly recognizing E-Learning as being convenient and cost-effective. The direct training expenditure per employee in 2010 (in the U.S. Market) was, for companies with:
BEST: award-winning Organizations G500: companies recognized in Fortune magazine’s Global 500 The heart of this topic is that education has positive implications for both the company and the employee. The depth of this impact strongly depends on the company’s industry. It is not surprising that the technology sector, for example, places a great deal of emphasis on innovative training, and views success in this industry as being highly dependent on properly trained employees. Simultaneously, E-Learning penetration in corporations is increasing, regardless of the company’s size. Since class-based training is more expensive, proportionately, for small and medium-sized firms, these firms are increasingly recognizing E-Learning as being convenient and cost-effective. The direct training expenditure per employee in 2010 (in the U.S. Market) was, for companies with:
- Fewer than 500 employees: $1,605
- 500 to 9,999 employees: $1,102
- More than 10,000 employees: $825 When training is mostly delivered in person, firms with more than 10,000 employees spend less while reaching more, owing to the scale-based savings involved.
This data changes completely when training is delivered through E-Learning projects. Market acceptance of E-Learning has resulted in its increased use for both large and small companies. SaaS/Cloud E-Learning solutions are particularly suitable for Organizations ranging from SMEs to large institutions.
General budget constraints appear to be the main drivers of the shift towards using E-Learning. Efforts to reduce travel costs and reduce the cost of training per employee point to key economic benefits arising from using E-Learning materials. However, there is another key driver: E-Learning tackles time constraints. In other words, E-Learning is not merely a solution which is attractive during an economic downturn but it is also an efficient and cost-effective solution when workers -- especially those in Organizations with a widely geographically distributed workforce -- need to be brought up-to-speed quickly on relevant knowledge and skills.
General budget constraints appear to be the main drivers of the shift towards using E-Learning. Efforts to reduce travel costs and reduce the cost of training per employee point to key economic benefits arising from using E-Learning materials. However, there is another key driver: E-Learning tackles time constraints. In other words, E-Learning is not merely a solution which is attractive during an economic downturn but it is also an efficient and cost-effective solution when workers -- especially those in Organizations with a widely geographically distributed workforce -- need to be brought up-to-speed quickly on relevant knowledge and skills.
“For any franchise agency, training is the main tool through which we deliver specific technical skills that are needed to undertake a specific activity, respecting the operating procedures adopted by the entire group.
In addition, at Solo Affitti, where specialization and a highly qualified network is a part of our mission, training represents an added asset, a moment of growth, and an opportunity to professionally prepare our network. People’s knowledge and skills are the most important assets for a company that wants to be both competitive, and successful. To increase and retain our “intellectual capital”, we need to invest in every single agent and ensure that every single agency of Solo Affitti’s network is recognized for its professionalism and reliability by the local communities.” Silvia Spronelli Vicini, General Manager, Solo Affitti spa “Through cooperation and joint development of E-Learning programs we can secure a uniform practice in all our five trusts. In addition, we now get documentation of all internally run training.
E-Learning will gain importance when we strive towards more systematic forms of training and competency development for our professionals. In the long-term, E-Learning will be used to build quality in our hospital trusts”. Hilde Rolandsen, Northern Norway Regional Health Authority (Helse Nord RHF) Where Content is concerned it’s important to note that, within Corporations, the adoption of E-Learning tends to be consolidated in specific subject matter. Today, Compliance Training is the area where E-Learning is most widely adopted. More than 50% of training-related Compliance is now delivered online.