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APPENDIX C
ASTD 2005 State of the Industry Report: ASTD's Annual Review of Trends
in Workplace Learning and Performance
Authors: Brenda Sugrue and Jay Rivera
The State of the Industry Report is an annual accounting of trends in workplace
learning and performance (WLP). The information below is quoted directly from the Report's
Executive Summary.
This year's report focuses on trends in the United States from 1999 through 2004, based on data
submitted through ASTD's Benchmarking Service (BMS) and Benchmarking Forum (BMF). In
addition, we include an analysis of organizations that won ASTD's BEST awards in 2003 and
2004. The BEST Award group replaces the Training Investment Leaders group, which was
drawn from the BMS and BMF samples in previous years. These three samples are the most
comprehensive sets of data available on both historical and current workplace learning and
performance investments and practices in the United States (see Table C1).
TABLE C1
Data Sources
The three samples for which data are presented in this report provide three groups against which
you can benchmark WLP investments and practices in your organization. The BMS sample
includes the broadest range of U.S. organizations in terms of size and industry and should be
interpreted as the U.S. norm. The BMF sample represents very large and mostly global
organizations, most of which are based in the United States. Between one and three BMF
organizations are based outside the United States in any given year.
· New this year is the sample of organizations that won ASTD BEST awards in 2003 and
2004. The BEST awards program recognizes organizations that demonstrate a clear link
between learning and performance. Through a rigorous blind review process, 23 winners
were selected from 76 submissions in 2003, and 24 winners were selected from 83
submissions in 2004. There were three non-U.S. winners in 2003 and five in 2004. The
winners were selected based on the following criteria:
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Evidence that learning has value in the culture
Evidence of a link between learning and performance
Evidence that the organization has leveraged technology in learning
Evidence of innovative learning initiatives.
For this report, we reanalyzed the winners' data to identify commonalities in their learning
investments, strategies, practices, and performance outcomes.
· The average annual expenditure per employee in ASTD's broadest sample of
organizations (BMS) has remained steady at about $820 since 2002.
· Average expenditure per employee in our sample of large organizations (BMF) was
consistently higher, but decreased from $1,366 in 2002 to $1,190 in 2004.
· The average expenditure per employee in organizations that won ASTD BEST awa rds in
2003 and 2004 was more than $2,000 each year since 2002.
· The average percentage of payroll invested in learning increased from 2.2% in 2002 to
2.52% in 2004 in BMS organizations, but decreased from 2.47% in 2002 to 1.99% in
2004 in our sample of large organizations (BMF). The average expenditure as a
percentage of payroll in BEST awa rd winners was considerably higher, ranging from
3.2% in 2002 to 4.16% in 2004.
· The percentage of expenditure for external services has risen steadily since 2002, with
the average now being 27% in BMS and BEST organizations, and 36% in BMF
organizations.
· The number of hours of formal learning per employee has averaged about 28 h in BMS
organizations and about 38 h in the larger BMF organizations from 2002 to 2004.
· The average number of employees per WLP staff member in 2004 was 194 in BMS
organizations and 325 in BMF organizations in 2004. The average number of hours of
content provided per WLP staff member was 541 in BMS organizations and 505 in BMF
organizations in 2003.
· The average cost per learning hour provided was $596 per hour in BMS and $1,430 per
hour in BMF organizations in 2003. However, the average cost per learning hour received
was $56 in both BMS and BMF organizations, because BMF organizations, being larger,
have greater reuse of each hour of learning that is provided.
· Expenditure per employee group was greatest for customer service employees in 2003,
with an average of 18% of expenditure going to that single employee group. However, an
average of 28% of learning expenditure went to employees with managerial
responsibilities (first-line supervisors, middle and senior managers, and executives
combined).
· In both BMS and BMF organizations, managerial and executive development combined
were allocated the most learning content in 2003 and 2004, followed closely by
information technology, business processes, and industry-specific content. Use of
technology for delivering learning continued to increase in all samples (BMS, BMF, and
BEST).
· The projections for 2004 are 29% in BMS, 35% in BMF, and at least 29% in BEST
organizations. More than half of technology-based delivery was online in 2003 and 2004,
and at least 75% of online learning was self-paced.
· The percentage of BMS organizations doing Level 1 evaluation in 2003 was about the
same as in 2002 (74%), but the percentage doing Levels 2, 3, and 4 declined in 2003, to
31%, 14%, and 8%, respectively. The case is very different in BEST organizations; all
BEST organizations are doing Level 4 evaluation to demonstrate the link between
learning and organizational performance.
· Common characteristics of BEST winning organizations were
-- High level of investment in learning (although some spend less than the norm)
-- Measurement and demonstration of efficiency and effectiveness of the learning
function
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-- Alignment of learning with business needs and individual employee competency
needs
-- Provision of a broad range of internal and external formal and informal learning
opportunities
-- Chief-level (or C-level) involvement and support for learning
-- Combination of learning with other performance improvement solutions.
Interpretation
· An increasingly competitive global economy and the realization that human capital is the
key to organizational performance have been a mixed blessing for workplace learning
and performance profe ssionals in recent years. WLP professionals' stock has gone up as
the perceived value of learning has increased. The status of the learning organization has
been elevated as more and more organizations appoint a chief-level officer with
responsibility for learning who reports directly to the CEO rather than through HR. But
with elevated status come elevated expectations. These expectations are translated into
mandates to "run learning like a business," "demonstrate the value of learning," and
"drive organizational performance.
· Organizations that really get the link between learning and performance have stepped up
to the plate with, if not increased investment, at least increased efforts to align learning
with business goals, target learning resources at mission-critical competencies, and
measure both the effectiveness of learning and the efficiency of the learning organization
in delivering improved performance outcomes.
· We see these trends most clearly in the sample of ASTD BEST awa rd winners. Not all
BEST organizations spend more than the norm on learning, but all maximize and
measure the efficiency and effectiveness of their investment, and align learning with
business and individual employee competency needs. The BEST organizations also
provide a broad range of internal and external learning opportunities for employees,
going beyond traditional formal learning activities to begin formalizing the informal; for
example, legitimizing and providing structures for knowledge sharing and coaching.
· The BEST learning organizations have C-level involvement and support, and
systematically involve leaders as role models and teachers. The BEST learning
organizations also embrace the integration of learning and other performance
improvement strategies. The BEST attribute performance gains as much to non-learning
solutions as to learning solutions.
· The focus of BEST learning organizations on coaching, knowledge sharing, non-learning
performance improvement strategies, and measurement parallels and validates the
inclusion of these as areas of expertise in ASTD's new competency model for the WLP
profession.
· While the BEST learning organizations lead the way, other organizations are still
struggling with the transition from a position of entitlement or luxury to a position of
criticality and scrutiny. In our largest and broadest sample of organizations (BMS), only
8% report that they are evaluating effectiveness in terms of business impact. On the
other hand, the drive for efficiency is evident across the board as use of technology
increases in all samples, at least for delivery of learning. If organizations take advantage
of the integration and data collection capabilities of their technology-based learning
management systems, then there is the potential for greater a lignment and more
measurement of learning and performance outcomes.
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· There is variation in averages across the three samples included in this report (BMS,
BMF, and BEST). For example, average expenditure per employee in 2003 was $818 in
BMS, $1,299 in BMF, and $2,240 in BEST organizations. There is also variation within
each sample. For example, expenditure per employee ranged from $290 to $2,766 in
BMF organizations in 2003. Such variation may make it seem difficult to choose a
suitable benchmark for any WLP indicator. Each organization has to determine
appropriate levels of investment and learning practices primarily in light of current
business needs and related workforce competency gaps. External benchmarks in the
form of averages provide meaningful and useful norms, but there may be situations
where it is appropriate to deviate from those norms.
· Any analysis of the state of the industry is only as good as the data on which it is based.
While ASTD is confident that its samples are representative, its survey questions have
not kept pace with changes in the industry. In 2005, ASTD will introduce a new set of
metrics that will allow us to report on and connect more of the dots between a broader
range of learning opportunities and individual, group, and organizational performance
variables. ASTD plans to benchmark separately efficiency, effectiveness, alignment, and
sustainability indicators and identify which indicators are most critical to each of those
attributes of a learning organization.
· As the WLP industry and profession evolves, so too must the methods for monitoring and
reporting its state on an annual basis. Meanwhile, we can say for sure that as the year
2004 ends, the state of workplace learning and performance is healthy and growing.
ASTD 2004 State of the Industry Report, ASTD, Washington, D.C., 2005. Readers whowould like to read
the remainder of the State of the Industry Report can go to www.astd.org and click on reports. You have to
be a member to get free access to the full report.
