We are working on our budgets for 2003 and I am trying to obtain some benchmark data on what companies are spending on / budgetting for training. I would be extremely grateful for any information on budget allocations that they are making or research reports that give comparative data.
Richard Rogers
4 Responses
People Skills Scoreboard
The Engineering Employers’ federation and the Engineering & Marine Training Authority do a regular scoreboard for the engineering sector benchmarking exactly this (in monetary and time values, on and off the job, etc).
Contact research@emta.org.uk or ring 01923 238441 and ask for the research team to send you a copy of the latest People Skill Scoreboard.
Depends…!
Richard, you could try surveys by ASTD and IPD.
But would you mind if I presumed to offer some words of caution? Without wishing to be flippant, what are you going to do with the answer?
If you find an ‘average’ will there be simplistic budget pressure to go lower than this to contain costs, or go higher to boost skills, morale, etc? There are several reasons why this is fraught with pitfalls. For example – some organisations may be able to do lower cost styles of learning because of the nature of the subject matter, type of employees, etc. Also, beware of what costs have been included in the figures – almost certainly the figures will exclude opportunity costs, and are also likely to exclude some fixed costs related to the Lng & Devpt function.
Think of two extremes: (1) the archetypal ‘learning organisation’ may actually have quite low apparent costs of training but very high effectiveness… (2) another organisation may send people indiscriminately on residential programmes located a long way away when much of the subject matter or objectives would be better suited to other media or approaches for the small proportion who actually need it – high cost low effectiveness
Apologies if all this is Motherhood and Apple Pie. If you find something truly useful I’d love to see it!
Benchmarking training spend
Richard – I recently posed a similar question on UKHRD. One of the (very few) responses stated 5% of turnover and prof services nearer 15%.(!!) I was also referred to http://www.dfes.gov.uk – and their statistics. These are mostly about number of days of training – so the cost is largely dependant on how you deliver – internal/external; group sizes; bulk discounts ….. Having been asked to do a lot more training and related projects this year, I’m looking for something to ally our total spend against. I’d like some idea of training spend as a %age of employment costs, rather than just of turnover.
Survey of training spend
In the APAC HR Benchmarker survey, the annual average spent on training and development dropped to £305 per person from £474 in 2001. With average earnings at around £20,000, that outlay is 1.5%. UK plc invest less than half that of our European neighbours in the ‘intellectual capital’ of organisations.
What is important is not what’s spent, but what is achieved. This is an important distinction, so how can that be determined; what is ‘best practice’?
A figure for best practice spend does not seem to be available. Organisations such as the Chartered Institute of Personnel and Development, Learning and Skills Council, Investors in People and Industrial Society, say they do not collate information on the achievements of organisations that excel.
Best practice organisations could be described as having an all-round ability to satisfy stakeholders requirements. Winners of the EFQM Excellence model ©, provide examples. So how do these organisations shape-up?
In a survey by Birkby Lancaster Consulting, completed in December 2001, winners of the UK Excellence 2000 and 2001 and regional Excellence Yorkshire 2001 awards were asked what percentage of pay was allocated to the development of employees. The survey was conducted across manufacturing, service, utility and public sectors.
The basis of the Best Practice Training Survey, was to determine the cost of training and development. To gain consistency, this included bought-in plus any internal training cost. Organisations were asked to include any grants that subsidised the training. Excluded, was delegate pay during the event.
The results were remarkably consistent. Best practice organisations spend almost 3% of salary on training and developing their employees; twice as much as the UK average. So how does your organisation compare; are you competitive?
A simple best practice comparison can be gained through http://www.birkbylancaster.co.uk