Getty
In 2018, over $87.6 billion was spent on corporate training and development across the United States. Billion! To put it into perspective, annual revenues at Dell are just shy of that number.
The good news? The total amount of training investment has been on the rise for the better part of the past 30 years. Sure, budgets fluctuate and get cut from time to time, but on the whole, organizations are investing training dollars on their people.
Here’s the rub though: a fair amount of that $87.6 billion gets wasted. (I should know. I’m a recovering Chief Learning Officer.)
According to the 2018 Training Industry Report—a fabulous research paper that has been published annually since 1981—those $87.6 billion of training investment are broken down as follows:
- $11 billion: spent on outside products and services (content like LinkedIn Learning, etc.)
- $29.6 billion: training expenditures (i.e., travel, facilities, equipment, etc.)
- $47 billion: training payroll (internal staff, freelancers, contractors, partners, suppliers, etc.)
Intuitively we know that developing employees is a good thing. Heck, six years ago, annual training spend hovered around $55 billion, so clearly leaders see some value there with the spike in yearly investment since 2012.
However, the real problem is what happens after the training. Let’s set aside compliance training and learning that has to happen to keep one’s skills up-to-date, such as a new product launch or a change in the law. Instead, let’s focus on where a good portion of training spend occurs: leadership and professional development.
The Example
Sally attended an excellent one-day workshop on customer service. She’s learned all about the importance of reliability, responsiveness and relationships. It was an enjoyable day of learning, full of activities and great dialogue. The facilitator was top notch. He even had a crisp British accent.
There was a smorgasbord of food for breakfast, healthy snacks at the morning break, a full-on sushi bar for lunch, and another break in the afternoon with Haagen-Dazs ice cream. When the day finished, people stuck around to network sipping Napa Valley wine.
All told, Sally’s session with 30 of her colleagues breaks down as follows:
- Six hours of learning, activities, self-reflection, table group exercises, and discussion.
- Three hours of networking, food, breaks, drinks, etc.
The hard costs for the one day of training came in as follows:
- Facilitator: $12,000 (including T&E)
- Food & Catering: $3,000
- Venue Rental: $2,500 (including Wi-Fi, A/V, etc.)
- Employee T&E: $10,000 (six employees flew in for the session, the rest drove)
The opportunity costs for the one day of training might look like this:
- 30 employees
- Assume an average salary of $80,000
- $306 (the cost per day of training based on their $80,000 annual salary) x 30 employees = ~$10,000
The one day of training for 30 people ends up costing the organization roughly $40,000.
The investment itself for the one day is exemplary, but the problem rests with what comes after the wine stops pouring. The typical next step for most organizations is that nothing else happens.
It’s like the annual performance review: nice things are said but there’s no salary increase this year for you.
The $40,000—although essential and useful—ends up being somewhat wasted.
Why Is It Wasteful?
One of my favorite lines that describes this situation is “spray and pray.” The one day of training was sprayed out with a fire hose by the facilitator to those in attendance. Leaders then pray that whatever was taught somehow magically gets absorbed (and applied) by the employees in attendance after the training finishes. Spray and pray: it’s mainly getting down on your knees as a leader and desperately wishing that the investment isn’t all for naught.
It’s like hoping Oasis is going to reunite. (They’re not.)
Another fab line to describe this training situation is the “spaghetti test.” Legend has it that some people will test out whether or not their spaghetti is ready to eat by removing a few strands from the pot and whipping them against the refrigerator. If the spaghetti sticks, it’s time to eat. If it bounces off or slides down to the waiting dog, it needs more time.
In our example, we’re throwing the training against the employees and hoping like mad that it sticks.
What’s The Solution?
Any professional development that encourages employees to change their behavior—be it customer service, leadership, among others—requires some form of follow-up and reinforcement to ensure the new knowledge is being applied.
In Sally’s case, part of the contract with the training supplier and facilitator would be to include post-workshop checkpoints such as a 1-1 follow-up call, job aids that are given to Sally’s leader so her boss could ensure progress was being made, in addition to other forms of follow-up.
The $40,000 is a fantastic investment. What it also requires, however, is either another $5,000 to $10,000 of post-workshop follow-up or a reallocation of the original $40,000 to ensure that the spaghetti sticks. Dollars must be invested to make certain the learning is being adopted.
Otherwise, you might as well get the fire hose out and spray the entire amount down the gutter.
