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2O14 TRAINING

INDUSTRYREPORT
ABOUT THIS STUDY
Now in its 33rd year, The Industry Report
is recognized as the training industry’s
most trusted source of data on budgets,
stafﬁng, and programs. This year, thestudy was conducted by an outside
research ﬁrm May-July 2014, whenmembers from the Training magazine
database were e-mailed an invitation
to participate in an online survey. Only
U.S.-based corporations and educational
institutions with 100 or more employees
were included in the analysis. Agencies ofthe state, local, and federal government
were not included in the analysis.
The data represents a cross-section ofindustries and company sizes.

28%(100-999 employees)

Midsize

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SURVEY RESPONDENTS
Small companies

Industrial Classiﬁcations
Respondent proﬁle by industry (weighted per Dun & Bradstreet).

 /0 @

 0*+ /0/(// *'@ 51#E/:0 >@41%

(1,000-9,999 employees)

Large

31%

(10,000 or more employees)

Total respondents

998

About Survey Respondents:
Note that the ﬁgures in this report
are weighted by company size andindustry according to a Dun & Bradstreet
database available through Hoovers of
U.S. companies. Since small companies
dominate the U.S. market, in terms ofsheer numbers, these organizations receivea heavier weighting, so that the data
accurately reﬂects the U.S. market.

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www.trainingmag.com

TRAINING EXPENDITURES

Backed by an improving job
market, a sharper focus on
training to close skill gaps, andJODSFBTFENFSHFSTBOEBDRVJTJUJPOT
activity leading to more midsize companies, total 2014 U.S.
training expenditures—including
payroll and spending on external
products and services—jumped
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outside products and services rose
QFSDFOUGSPNCJMMJPOUPCJMMJPOThe training budget ﬁgure
was calculated by projecting
the average training budget to aweighted universe of companies,
using a Dun & Bradstreet databaseavailable through Hoovers of U.S.
organizations with more than 100
employees. It is interesting to notethat although small companies
have the smallest annual budgets,there are so many of them that they
BDDPVOUGPSQFSDFOUPGUIFUPUBM
budget for training expenditures.

Training Expenditures 2009-2014"=B*
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 Total training spending: All training-related expenditures for the year,
including training budgets, technology spending, and staff salaries.
 Training staff payroll: The annual payroll for all staff personnel assigned
to the training function.
 Outside products and services: Annual spending on external vendors
and consultants, including all products, services, technologies, off-theshelf and custom content, and consulting services.

Average of Total Annual Budget
Organization Type&EVDBUJPO(PWFSONFOU.JMJUBSZ
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Avg. Across Sizes 

www.trainingmag.com

Large                Midsize

Small

Average               
 
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Types of Training Products and Services
Intended to Purchase Next Year
19%

Assessment & Analysis Testing

6%

Audience Response Systems

18%"VEJPBOE8FC$POGFSFODJOH1SPEVDUT4ZTUFNT37%"VUIPSJOH5PPMT4ZTUFNT

21%Business Skills

23%$FSUJmDBUJPO33%$MBTTSPPN5PPMT4ZTUFNT20%$POTVMUJOH

29%$POUFOU%FWFMPQNFOU$PVSTFXBSF%FTJHO

27%$VTUPNFS3FMBUJPOTIJQ.BOBHFNFOU

11%Enterprise Learning Systems

8%

Games & Simulations

20%,OPXMFEHF.BOBHFNFOU5PPMT4ZTUFNT

15%Learning Management Systems

41%

Mobile Learning

23%

Online Learning Tools & Systems

44%

4VQQPSU0O%FNBOE-FBSOJOH5PPMT4ZTUFNT

17%

1SFTFOUBUJPO4PGUXBSF5PPMT

27%

Talent Management Tools & Systems

18%

Training Management Administration

13%

Translation & Localization

7%

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3%
0

10

Average training expenditures for large companies decreased
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from the year before (up from 34 percent in 2013), while
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percent in 2013. Large nonproﬁts and service organizations
had the largest personnel costs. Across all organization
types, larger companies spent about 10 times as much as
midsize, and midsize companies spent about three times
as much as small ones. The average payroll ﬁgure for large
DPNQBOJFTXBTNJMMJPOGPSNJETJ[FPSHBOJ[BUJPOT JU18 | NOVEMBER/DECEMBER 2014 training

20

30

40

50

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For those who reported an increase in their training staff,
the average increase was four people, ﬁve less than in 2013.
For those who reported a decrease in their staff, the average
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average, organizations spent 11 percent of their budgetPS  WT MBTUZFBS POMFBSOJOHUPPMTBOEUFDIOPMPHJFT-BSHFSFUBJMFSTXIPMFTBMFSTBOETNBMM
education organizations spent the highest portion of theirbudgets on tools and technology (24 percent and 21
percent, respectively). Manufacturers across all sizes spent
the greatest percentage of their budgets on training tools.

www.trainingmag.com

Training Expenditures per Learner 2012-2014
Q 
Q ;
Q

$1,059$881$976

All Companies$1,115$1,092$1,238Small (100 to 999
employees)

Midsize (1,000 to
9,999 employees)$1,104$829$819

Large (10,000 or

$864
$490

more employees)

$903
0

300

600

900

1,200

1,500

Hours of Training per Employee 2013-2014
Q ;
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37.5
40.7

All Companies
Small (100 to 999

36.5

employees)

42.2

Midsize (1,000 to
9,999 employees)

38.8
41.6

Large (10,000 or

37.5
36.2

more employees)
0

10

20

30

40

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organizations spent the smallest percentage of their training
budget on tools and technologies (1 percent and 4 percent,
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purchases are online learning tools and systems (44 percent
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year), classroom tools and systems (33 percent vs. 29
percent), and content development (29 percent vs. 30
percent last year).
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Manufacturers spent the most this year with an average
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www.trainingmag.com

50organizations have lost their edge on cost savings as midsize
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per year, three hours more than last year. In general, small
companies tended to have more hours of training this year at3FUBJMFSTXIPMFTBMFBOETFSWJDFTPSHBOJ[BUJPOTIBEUIFIJHIFTUBWFSBHFOVNCFSPGIPVSTPWFSBMM XJUIMBSHFSFUBJMFST
wholesale organizations having the largest number of hours
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expenditures to training non-exempt employees (40 percent,down from 42 percent in 2013). Training for exempt nonNBOBHFSTEFDSFBTFEGSPNQFSDFOUUPQFSDFOUJO
2014.

training NOVEMBER/DECEMBER 2014 | 192014 TRAINING INDUSTRY REPORTTRAINING EXPENDITURES

Training Expenditure Allocations—
Who Gets Trained?

Staff per 1,000 Learners

40%

40

*W +0 *

35
30

24%

25

26%

15

20
15
10

12.5

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Staff per 1,000 Learners

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20

16.7

16.4

#0+0 *
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18.3
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15

27.2
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21.7
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www.trainingmag.com

TRAINING BUDGET

What Happened to Your
Training Budget This Year?

Budget status was almost evenly split,with 43 percent saying their training
budget increased and 41 percent
TBZJOHJUSFNBJOFEUIFTBNF4PNF
percent reported a decrease in budget.
Last year, 41 percent said their budget
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military organizations showed thegreatest tendency for training budget
DVUT XIJMFSFUBJMFSTXIPMFTBMFSTBOE
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the largest gains. Increases were not
evenly distributed across organization
sizes. Large companies (23 percent)showed more decreases than midsize(14 percent) and small (13 percent)companies.
Most of the budget increases were
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organizations reported increases in theUPQFSDFOUSBOHF.PTUSFTQPOEFOUT
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who reported an increase in theirtraining budgets attributed it to thefollowing reasons:'HFUHDVHG,QFUHDVHG
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Budget Change by Industry
9%
31%
13%
42%
45%

Servicest*ODSFBTFJOUIFTDPQFPGUIFJSUSBJOJOHQSPHSBNT QFSDFOUWT
percent last year)
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vs. 49 percent and 40 percent,respectively last year)(PWFSONFOU.JMJUBSZt1VSDIBTFEOFXUFDIOPMPHJFTFRVJQNFOU QFSDFOUWT
percent last year)

13%
65%
22%
25%
42%
33%
28%

Education

Like last year, the majority (42percent) of respondents reported budget
EFDSFBTFTCFUXFFOBOEQFSDFOU
Some 44 percent chose “other” as
the reason for the decrease, citing“corporate mandate to cut expenses,”“LMS implemented,” “lowered priority
by the organization,” and “Training
department reorganized,” among others.
This was followed by:

www.trainingmag.com

Q7  0*Q" 0*
Q#0

60%

11%
61%

0%
0%
Association
100%
22%
Nonproﬁt

31%
47%
0

20

40

60

80

100

training NOVEMBER/DECEMBER 2014 | 21

2014 TRAINING INDUSTRY REPORTTRAINING BUDGETS

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QFSDFOU
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@/@ %@FGmDJFODZ QFSDFOUWTQFSDFOUMBTU
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0
10
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UFDIOPMPHZJOJUJBUJWFTBOEPCUBJOJOHSFWFOVFUISPVHIFYUFSOBMUSBJOJOHSFNBJOUIFMPXFTU
80 5 +0 *QSJPSJUJFT 0@ ;@@/@ @@/ @  @@/@ ;>@
0

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Why Did Your Budget Increase?
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 @ @ @ @;@;@

022 | NOVEMBER/DECEMBER 2014 training

@

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10

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www.trainingmag.com

How Much Did Your Training Budget Decrease?
4+0 *22%

 0@

9%@/@42%@/ @
@/@

27%
0

10

20

30

40

50

#0+0 * 0@31%@/@ 0%@/ @

56%

@/@

13%
0

10

20

30

40

50

60

*W +0 * 0@

10%@/@

20%@/ @

35%

@/@

35%
0

10

20

30

40

80 5 +0 *26%

 0@@/@

5%@/ @

37%

@/@

32%
0

10

20

30

40

Why Did Your Budget Decrease?
40%

Reduced Training Staff
Decreased Number of Learners Served
Decreased Scope of Training
Attended Fewer Outside Learning Events (conferences/seminars)
Decreased Outside Trainer/Consultant Investment
Budget Adjusted to Reﬂect Lower Costs
Other

11%
22%
11%
18%
24%
44%
0

www.trainingmag.com

10

20

30

40

training NOVEMBER/DECEMBER 2014 | 232014 TRAINING INDUSTRY REPORTTRAINING BUDGETS

Projected Funding for Learning Areas Next Year
Executive Development
Management/Supervisory Training*OUFSQFSTPOBM4LJMMT FH DPNNVOJDBUJPO UFBNXPSL*54ZTUFNT5SBJOJOH FH FOUFSQSJTFTPGUXBSF%FTLUPQ"QQMJDBUJPO5SBJOJOH
Customer Service Training
Sales Training
Mandatory or Compliance Training
1SPGFTTJPO*OEVTUSZ4QFDJmD FOHJOFFSJOH BDDPVOUJOH FUD
Onboarding

11%

60%

4%

26%
20%

6%

60%

15%

7%

61%

10%

7%

61%

20%
15%

3%

5%

63%

19%

4%

63%
20

40

16%

43%

72%

14%

13%
19%

6%

38

8%

17%

10%
58%

16%

0

25%

60%

4%
60

8%

19%
14%

80

100

Q 080*/C 0 Q4-,// #0 0*80*/C 0 Q8 **080*/C 0 Q4
T R A I N I N G D E L I V E RY
Nearly 47 percent of training hours were delivered by astand-and-deliver
instructor in a classroom setting—up a bitfrom the 44 percent reported last year.
tQFSDFOUPGIPVSTXFSFEFMJWFSFEXJUICMFOEFEMFBSOJOHUFDIOJRVFT VQBCJUGSPNQFSDFOUMBTUZFBS
tQFSDFOUPGIPVSTXFSFEFMJWFSFEWJBPOMJOFPSDPNQVUFSCBTFEUFDIOPMPHJFT VQGSPNQFSDFOUMBTU
ZFBS7JSUVBMDMBTTSPPN8FCDBTUBDDPVOUFEGPSOFBSMZQFSDFOUPGIPVSTEFMJWFSFE EPXOGSPNQFSDFOUMBTU
year.
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EFWJDFT EPXOGSPNQFSDFOUJO XIJMFTPDJBMMFBSOJOHBDDPVOUFEGPSQFSDFOUPGIPVST VQGSPNQFSDFOUMBTUZFBS4PNFQFSDFOUPGDPNQBOJFTTBJE
they are using social learning to some extent.
4NBMM QFSDFOU BOENJETJ[F QFSDFOU 
companies continue to rely on instructor-led delivery
NFUIPETNPSFTPUIBOMBSHFDPNQBOJFT QFSDFOU Blended learning was fairly even across companies of all
TJ[FT SBOHJOHCFUXFFOQFSDFOUGPSMBSHFDPNQBOJFTBOEQFSDFOUGPSTNBMMPOFT-JLFMBTUZFBS MBSHFDPNQBOJFT
appeared to be focusing on online or computer-based

Training Delivery Methods by Company Size 2014
Small UPFNQMPZFFT  ;;@ '@

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>@ %@

Midsize  UP FNQMPZFFT  @ >;@  @@

Large  PSNPSFFNQMPZFFT  @;  @
0

30

60

 @;%@ %@; @
90

120

150

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Q /,00** F -0*/61!*/ ,/ E  / 0/)Q6  +,/ &B0*  /*61!*/ ,/ )Q- 61! + **/0- /*74*)
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24 | NOVEMBER/DECEMBER 2014 training

www.trainingmag.com

T R A I N I N G D E L I V E RY

learning management systems (LMSs), both with 74
percent. Last year, virtual held the lead at 78 percent,followed by LMSs with 74 percent.
t3BQJEFMFBSOJOHUPPM QFSDFOU EPXOGSPNQFSDFOU
last year)t"QQMJDBUJPOTJNVMBUJPOUPPM QFSDFOU EPXOGSPN
percent)

methods (35.9 percent vs. an average of 26.5 percent forsmall and midsize companies).
Mandatory or compliance training continued to be done
mostly online, with 72 percent of organizations doing atleast some of it online and 20 percent entirely online (downfrom 21 percent last year). Online training also often is used
for desktop application training (56 percent, the same as lastyear) and IT/systems application training (54 percent, downfrom 58 percent last year). Online training was least used forexecutive development (40 percent had no online training forit), onboarding (35 percent had no online training for it), andinterpersonal skills and customer service (31 percent had no
online training for either one). Of the learning technologies
presented, the most often used included:

The delivery methods least often used for training remained
the same as last year:t1PEDBTUJOHBUQFSDFOU EPXOGSPNQFSDFOUMBTUZFBSt-FBSOJOHDPOUFOUNBOBHFNFOUTZTUFN -$.4 BU
percent (down from 26 percent)t0OMJOFQFSGPSNBODFTVQQPSU &144 PSLOPXMFEHF
management system at 21 percent (down from 25 percent)t7JSUVBMDMBTTSPPN8FCDBTUJOHWJEFPCSPBEDBTUJOHBOE

Online Method Use for Types of Training&YFDVUJWF%FWFMPQNFOUManagement/Supervisory Training@; @%@

@ @

Interpersonal Skills (e.g., communication); @'@'

@@ @;@@>@ @IT/Systems Training (e.g., enterprise software) '@'@;@@ @%FTLUPQ"QQMJDBUJPO5SBJOJOH

@ @;@ @%@$VTUPNFS4FSWJDF5SBJOJOH

; @; @@ @;@Sales Training @%@; @ @@.BOEBUPSZPS$PNQMJBODF5SBJOJOH

 ;@ @ >@;@@

1SPGFTTJPO*OEVTUSZ4QFDJmD FH FOHJOFFSJOH

@>@;@ @ @Onboarding;@ @>@%@;@
0

20

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www.trainingmag.com

training NOVEMBER/DECEMBER 2014 | 252014 TRAINING INDUSTRY REPORTT R A I N I N G D E L I V E RY

Learning Technologies Current Usage4+0 *Podcasting  @ '@>@Online Performance Support or Knowledge Management System  @> @'@Rapid E-Learning Tool (PowerPoint conversion tool)  '@ ;@%@Application Simulation Tool ;;@ @>@Virtual Classroom/Webcasting/Video Broadcasting > @ @@Learning Content Management System (LCMS) @ @ @
Learning Management System (LMS) > @ @@Mobile Applications  '@>@>@0

20

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40

60

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#0+0 *Podcasting @%@ @Online Performance Support or Knowledge Management System  @';@@
Rapid E-Learning Tool (PowerPoint conversion tool) ;'@'@ @Application Simulation Tool >@ '@@
Virtual Classroom/Webcasting/Video Broadcasting  @;@;@Learning Content Management System (LCMS)  '@> @ @Learning Management System (LMS)  @; @ @Mobile Applications  @'@ @0

20

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40

60

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*W +0 *Podcasting  >@>%@ @Online Performance Support or Knowledge Management System @ %@%@Rapid E-Learning Tool (PowerPoint conversion tool) @;@ ;@Application Simulation Tool ; @%@ @
Virtual Classroom/Webcasting/Video Broadcasting >@;@@Learning Content Management System (LCMS)  @ >@%@Learning Management System (LMS) >@ @ @
Mobile Applications  '@> @ @0

20

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40

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80 5 +0 *Podcasting  ;@>@ @
Online Performance Support or Knowledge Management System ; @ @ @
Rapid E-Learning Tool (PowerPoint conversion tool) >@;@ @Application Simulation Tool  @@ @Virtual Classroom/Webcasting/Video Broadcasting '%@@ @Learning Content Management System (LCMS) ;%@ @ @
Learning Management System (LMS) ''@ @ @Mobile Applications ;@>@ ;@26 | NOVEMBER/DECEMBER 2014 training

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www.trainingmag.com

TRAINING OUTSOURCING

2014 saw a sizeable increase in the average expenditure
GPSUSBJOJOHPVUTPVSDJOH  VQGSPN JO-BSHFDPNQBOJFTPOBWFSBHFTQFOUNJMMJPOWT GPSNJETJ[FDPNQBOJFTBOE GPSTNBMM
POFT"OBWFSBHFPGQFSDFOUPGUIFUPUBMUSBJOJOHCVEHFU
was spent on outsourcing in 2014, the same as in 2013.
On average, 29 percent of companies completely
PVUTPVSDFE-.4PQFSBUJPOTIPTUJOH WTQFSDFOUMBTU
year). Learner support, however, was mostly handled inIPVTF QFSDFOU -.4BENJOJTUSBUJPO QFSDFOU MBSHFMZwas handled in-house, as well.
*OTUSVDUJPOGBDJMJUBUJPOXBTIBOEMFEBCPVUFRVBMMZJO
house and outsourced. Across all the topic areas, large
companies outsourced more than midsize ones, and midsizeorganizations outsourced more than small companies. This
FGGFDUXBTNPTUTUSJLJOHGPSDVTUPNDPOUFOUEFWFMPQNFOU 

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organizations.
The level of outsourcing is expected to stay relatively steadyJOTPNFQFSDFOUPGPSHBOJ[BUJPOTTBJEUIFZFYQFDU
to stay the same in the outsourcing area. The percentage
of companies expecting to decrease use (11 percent) isslightly higher than those expecting to use outsourcing moreQFSDFOU 5IFSFBSFFYDFQUJPOTGPSJOEJWJEVBMGVODUJPOT 
though. In learner support, twice as many companies said
they will be doing less than those that said they will bedoing more.
There aren’t many differences between the outsourcingchanges by company size. One thing that stands out:
Large companies will outsource less custom content
development.

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,+E = ;  ;40 05 E'+  /E/ //0/ 05-,5 /:0**+ /,/*, 5   E,/*, 5*.+ / /*/01 0/ 1*/ 01 Extent of Outsourcing4+0 **OTUSVDUJPO'BDJMJUBUJPOLMS Administration (registration, upload data)-.40QFSBUJPOT)PTUJOH
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training NOVEMBER/DECEMBER 2014 | 27

2014 TRAINING INDUSTRY REPORTTRAINING OUTSOURCING

Extent of Outsourcing#0+0 *Instruction/Facilitation  @ @@LMS Administration (registration, upload data) '>@%@ @LMS Operations/Hosting @ >@'@Learner Support >%@ @@Custom Content Development > @ @@
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Custom Content Development '@ %@;@ %@ @>@@ '@;@';@

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28 | NOVEMBER/DECEMBER 2014 training

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Projected Use of Outsourcing4+0 **OTUSVDUJPO'BDJMJUBUJPO @ @ @;@LMS Administration (registration, upload data) @;>@'@@-.40QFSBUJPOT)PTUJOH %@@>@; @Learner Support @; @ @@$VTUPN$POUFOU%FWFMPQNFOU  @;;@ @;'@
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training NOVEMBER/DECEMBER 2014 | 29