Acknowledgements State of the Industry Report Sponsor Executive Summary Expenditure Distribution... 11

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2 TABLE OF CONTENTS Acknowledgements... 2 Introduction Sponsor... 4 Data Sources... 5 Executive Summary... 6 Comparative Data Key Indicators... 8 Investment Expenditure Distribution Efficiency Content Distribution Delivery Methods BEST Award Winners Characteristics of the BEST Learning Organizations Valuing and Positioning Learning Linking Learning and Performance Effectiveness Efficiency Learning Opportunities Non-Training Solutions/Performance Improvement Ad-hoc Surveys Learning & Employee Engagement Informal Learning The Role of Learning in Globally Dispersed Workforces WLP Professionals Income Appendix Survey Questions Definitions BEST Application Questions by the American Society for Training & Development. All rights reserved. Printed in the United States of America. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means including photocopying, recording, or other electronic or mechanical methods, without the prior permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to ASTD, Research Department, Box 1443, Alexandria, VA Ordering Information: Books and reports published by ASTD can be purchased by visiting our Website at store.astd.org or by calling or ISBN-10: ISBN-13: Author: Andrew Paradise, PhD., Senior Research Analyst, ASTD Publication Design and Production: Steve Fife Questions about the report should be sent via to ASTDResearch@astd.org 1

3 Acknowledgements ASTD would like to thank the individuals and teams that provided data about their organizations learning investments. Gathering data can be arduous, even in organizations that already have sophisticated and comprehensive learning management systems (LMSs). Without learning professionals dedicated to providing accurate and complete data year after year, ASTD would not be able to produce one, let alone 12 consecutive State of the Industry reports. Special recognition goes to the company that sponsored this year s report: Learning Tree. Their generosity allows ASTD to provide the high production quality of this report and supports the intensive qualitative data analysis for the BEST award submissions. Finally, thank you to the readers and users of the ASTD State of the Industry report. Your input and feedback helps ASTD improve how we communicate industry data and trends. We encourage you to make full use of the data and results presented in this report and hope that this data helps you to increase support for workplace learning and performance in your organization. Many people at ASTD share a passion and talent for the profession, and their efforts helped make this report a reality: Richa Batra, Carol Chulew, Mike Czarnowsky, Steve Fife, M.J. Hall, Jared Lemke, Natasha Porter, Andrew Ribner, and Ray Rivera. I extend my thanks to those who reviewed this year s State of the Industry report, and whose support has been crucial: Tony Bingham, Pat Galagan, Jennifer Homer, and Paula Ketter. Special thanks to analyst Elizabeth Durkin, whose assistance with the 2008 State of the Industry report was critical. Andrew Paradise, PhD Sr. Research Analyst, ASTD 2

4 Introduction We are pleased to present a robust set of data from a wide variety of organizations for the State of the Industry report. The ASTD Workplace Learning and Performance (WLP) Scorecard has become the primary portal through which ASTD gathers industry data. The data in the current edition includes responses from users of the WLP Scorecard, ASTD Benchmarking Forum (BMF) organizations, and ASTD BEST Award winners. The 2008 State of the Industry report provides substantial data against which organizations may benchmark their learning investments and practices. Our enhanced data collection provides a highly insightful approach to reporting the value of learning. For learning executives and business leaders, obtaining accurate and actionable information about learning remains a critical aspect of sound decision making. ASTD is committed to delivering useful and relevant data about learning investments, practices, and trends in workplace learning and performance. We have calculated results for the consolidated set of responses each year, with the exception of 2005, when the transition to data collection through the WLP Scorecard was occurring. Breakouts for BMF organizations and BEST Award winners are also presented. Most topic areas include a multiyear data table accompanied by one or more charts and text highlights. Descriptions of the data sources and demographics for each sample are in Table 1 at the beginning of the report. Questions and definitions used to gather data from the WLP Scorecard, BMF, and BEST submissions are at the end of the report. 3

5 2008 SPONSOR SILVER 4

6 Data Sources Consolidated responses Data are presented in three slices against which workplace learning professionals can benchmark learning investments and practices in their organizations. Presented first, the consolidated responses include all of the organizations that submitted data for a particular year. From 2001 to 2003, the consolidated responses include data from the ASTD Benchmarking Forum (BMF) and Benchmarking Service (BMS) samples. Starting with 2004, data from ASTD BEST Award-winning organizations was included. Consolidated data was not available for 2005 because of the transition of data collection to the ASTD WLP Scorecard. The 2006 and 2007 data sets include responses from WLP Scorecard users, the BMF organizations, and the BEST Award winners. ASTD Benchmarking Forum organizations The second group of findings presented is data collected from the ASTD BMF organizations. BMF members are typically very large global organizations, most of which are based in the United States. In any given year, between three and six BMF member organizations are based outside of the United States. BEST Award winners The third group consists of organizations that won ASTD BEST Awards. Started five years ago, the BEST Awards program recognizes organizations that demonstrate a clear link between learning and performance across the enterprise. In 2008, 35 of the winners were U.S.-based organizations; four were based in India, and one was located in Hong Kong. As in previous years, the winners were selected according to the following criteria: evidence that learning has value in the culture evidence of a link between learning and performance evidence of innovative learning initiatives. BEST Award applicants completed the same quantitative survey as the WLP Scorecard respondents and the BMF sample, permitting direct comparison of the same indicators among them for each fiscal year. The BEST Award applicants also completed a largely qualitative survey that was analyzed for this report. Data Source Consolidated Responses Organizations that submitted their annual data as part of ASTD's ongoing benchmarking programs. From 1999 to 2003, this combined set of responses included data from the ASTD Benchmarking Forum (BMF) and ASTD's Benchmarking Service (BMS). In 2004, data from the ASTD BEST Award-winning organizations was also included in the consolidated set. In 2005, the BMS was phased into ASTD's new WLP Scorecard, so consolidated data is not available for that year. The consolidated responses include data from the WLP Scorecard users, the BMF organizations, and the BEST organizations. BMF = ASTD Benchmarking Forum Organizations The ASTD Benchmarking Forum is a group of large Fortune 500 companies and public sector organizations that share data and best practices with one another. These organizations submit detailed data on their training investments and practices each year. BEST = ASTD BEST Award Winners Organizations that were honored for their exceptional efforts to foster, support, and leverage enterprise-wide learning for business results. Table 1: Data Sources Samples Average Number of Employees Average Payroll $M Data Sources 2007 (n = 316) 17,825 $1,128 WLP Scorecard, BMF, BEST 2006 (n = 221) 27,549 $1,116 WLP Scorecard, BMF, BEST 2005 na na na 2004 (n = 246) 14,699 $3,960 BMS, BMF, BEST 2003 (n = 278) 16,875 $1,538 BMS, BMF 2002 (n = 297) 10,914 $856 BMS, BMF 2001 (n = 304) 11,658 $926 BMS, BMF 2007 (n = 25) 64,241 $3, (n = 25) 71,905 $4, (n = 22) 70,487 $4, (n = 24) 57,868 $3, (n = 26) 100,168 $4, (n = 21) 66,823 $6, (n = 34) 63,259 $4, (n = 40) 28, (n = 42) 28, (n = 39) 60, (n = 29) 45, (n = 24) 40, (n = 23) 18,572 5

7 Executive Summary Results from the 2008 State of the Industry report reveal a continued dedication to workplace learning and performance by organizations in a variety of industries across the globe. Despite troubling signs for the economy in the latter part of 2007, investment in learning activities remained strong from both a financial and operational standpoint. Maximizing the potential of the workforce has become embedded in the daily operations of thousands of firms. Learning professionals continually refine and enhance the transfer of knowledge to employees through innovative practices. Although the execution of workplace learning initiatives and performance improvement evolves to meet the demands of the workplace, the underlying commitment to learning has endured. Sustained support for corporate learning has fostered a variety of advancements in its operations. The most recent data obtained through ASTD s benchmarking partners reveal numerous efficiency gains for the learning function. As they continue to increase their range and capacity, learning professionals are able to manage more constituents and programs than in the past. The delivery of learning content has evolved to allow for its repeated use, instead of only in one-time situations. Learners are able to consume historically high volumes of content, much of it at a customized schedule and pace. E-learning has enabled many of these efficiency gains. One of the significant findings from the 2008 State of the Industry report is the consistent upward trend of technology-based delivery methods. E-learning now accounts for nearly one-third of learning content made available. Although traditional classroom instruction still occupies a prominent space, learning professionals are turning to technology to help streamline operations and deliver learning at less cost and with greater reach. As e-learning has gained in popularity, so too have the types of delivery methods made available. Many formats that were nonexistent just a few years ago have become widespread, such as simulations, instructional games, and social networking sites. Adopting and sustaining new technologies still has its price. Spending on workplace learning and performance remains brisk, partly because of widespread deployment of e-learning, but also because of increases in the number of learners, rising internal learning costs, and other business factors. ASTD estimates that U.S. organizations spent $ billion 1 on employee learning and development in This amount reflects direct learning expenditures such as the learning function s staff salaries, administrative learning costs, and nonsalary delivery costs. Nearly two-thirds of the U.S. total ($83.62 billion) was spent on the internal learning function, and the remainder ($50.77 billion) was allocated to external services. Business leaders continue to recognize the need to financially support the learning function to leverage human capital to the fullest. Financial commitment to learning Each year, organizations face difficult choices about spending for every employee. Although the exact decisions on how to maximize performance can become extremely complex, allocation of resources to individual employees for learning has remained strong in recent years. The average direct learning expenditure per employee in the consolidated sample of organizations rose to $1,103 per employee in 2007, an increase of 6.0 percent from The average learning expenditure per employee in both BMF and BEST organizations 1 All financial figures are reported in U.S. Dollars. was higher than the consolidated average. For BMF organizations, average direct expenditure per employee was $1,609 in The BEST Award winners spent an average of $1,451 per employee on learning and development. Further evidence of the commitment to learning is expressed in the amount of payroll allocated to learning expenses. In 2007, the consolidated average expenditure as a percentage of payroll was 2.15 percent, down from 2.33 percent in As was the case with average expenditure per employee, both the BMF and BEST organizations allocated a greater proportion of their payroll to learning expenses than the other organizations sampled. BEST Award winners dedicated an average of 2.19 percent of payroll to learning expenditure, while BMF organizations average direct expenditure as a percentage of payroll increased from 2.20 percent in 2006 to 2.70 percent in As financial support for workplace learning and performance has risen over the years, the sophistication of the learning function has increased as well. Organizations now have a keen sense of what types of activities learning professionals can execute internally and what tasks should be outsourced. The majority of learning expenses fall into the internal category, which includes staff salaries, administrative learning costs, and development costs. In 2007, the consolidated average for internal learning expenses was 62.2 percent, up slightly from 61.3 percent in In contrast, the outsourcing of learning activities declined in The percentage of direct learning expenditure of the organizations surveyed allocated to external providers fell from 28.1 percent to 25.2 percent. A similar pattern emerged among the BMF organizations, where outsourcing decreased from 30.5 percent in 2006 to 23.8 percent in The proportion of external expenditure in the BEST Award-winning organizations was 22.3 percent in Organizational investments in e-learning platforms and management systems provide the capability to achieve outcomes that previously would have required the assistance of external providers. Efficiency gains Another noteworthy set of findings from the 2008 State of the Industry data includes advancements in operational efficiencies for the learning function. The average number of learning hours used, one of the key indicators of the capacity and range of the learning function, has made substantial gains in recent years. In the consolidated data set, the average number of hours of formal learning content used per employee increased from 35.1 in 2006 to 37.4 in BMF organizations also experienced an increase in the volume of learning content consumed per employee, rising from 40.7 hours used on average to In the BEST Award-winning organizations, each employee used an average of 44.7 learning hours in Additional evidence of efficiency gains can be found in metrics related to delivery capability and reach of the learning staff. The number of learning hours used per learning staff member increased considerably, rising from 4,606 hours used to 5,497 hours used in the consolidated set of organizations. This ratio also increased for the BMF organizations, from 6,631 in 2006 to 7,038 in The related area of content management has steadily improved in recent years. The ratio of learning hours used to learning hours made available, which indicates the degree of content access and usage, increased for the third consecutive year to This reuse ratio means that in 2007 every hour of content made available was used by learners an average of 44.8 times. 6

8 In addition, the typical learning department has improved workflow to serve a broader constituency than in the past. The consolidated average number of employees per learning staff member grew to 227 in 2007, marking the second-highest average on record. These efficiency improvements have incurred growing costs related to learning content production and delivery. For the consolidated set of organizations, the average cost to make one hour of learning content available grew from $1,543 in 2006 to $1,660 in 2007, an increase of 7.6 percent. BMF organizations had a sharp spike in cost-per-learning hour made available, jumping from $900 to $1,397. BEST organizations paid an average of $2,241 to make one hour of content available in Consumption costs were also on the rise. The consolidated average cost per learning hour used increased 2.5 percent, from $54 in 2006 to $56 in BMF organizations had a major increase in average cost per learning hour used, mirroring the spike in cost per learning hour available. The cost to consume one hour of learning content rose from $35 to $47 for BMF firms. The BEST figure for average cost per learning hour used was $46 in Content Areas Every year a wide range of business demands affects the choices related to the distribution of learning content. The breakdown of learning hours by content area has not experienced many variations in recent years, suggesting that learning professionals have a good handle on the content mix from year to year. One exception involved an enhanced focus on certification and compliance knowledge mentioned anecdotally by some of the responding organizations. As a result, the mandatory and compliance content area increased from 8.9 percent in 2006 to 10.7 percent in The leading content area remained profession- or industry-specific skills and information at 14.2 percent of learning hours in Managerial and supervisory topics increased slightly to 11.7 percent of learning content, while processes, procedures, and business practices (11.1 percent) accounted for nearly the same proportion of content as in The consolidated average for information technology and systems learning content declined slightly from 10.2 percent in 2006 to 9.7 percent in E-learning still trending upward One of the most notable findings from the 2008 State of the Industry report is the sustained utilization of technology-based learning applications. Reliance on technology-based systems has influenced other workplace learning and performance trends. Usage of e-learning typically requires a solid financial commitment, both for development and regular maintenance, which likely fueled many of the recent increases in learning expenditure and costs for delivering and consuming content. Organizations are increasingly viewing these types of technology-driven expenses as necessary for daily operation of the learning function. E-learning solutions also set the stage for the efficiency improvements noted above. One of the major strengths of e-learning is centralization. Through technology-based applications such as a centralized LMS, staff can organize large amounts of learning content that are easily accessed by the audience. Learning professionals now can extend their reach much farther than in the past. Another advantage of e-learning involves the on-demand nature of its delivery. Web-based delivery allows for flexible scheduling of learning. Technology-based learning platforms have dramatically increased potential audience size and enabled continual access and reuse of content. The consolidated average for technology-based learning grew from 30.3 percent of learning hours made available in 2006 to 32.6 percent in Technologybased delivery methods only accounted for 11.5 percent of the learning hours provided six years earlier. The use of e-learning was roughly equivalent in BMF organizations (35.2 percent of learning hours) and BEST organizations (35.8 percent of learning hours). Self-paced online (networked) learning remained the dominant form of technology-based delivery. As it has been for several years, roughly 90 percent of online learning was self-paced in Conclusions In spite of a potentially weakening business climate, the aggregated financial commitment to learning was an encouraging sign for the workplace learning and performance profession. Learning staffs in a variety of organizations continue to report advancements in operations and outcomes. Many of these accomplishments are linked to the rise in e-learning. Technology-based delivery and consumption of learning content have enabled efficiency gains in recent years, though these efficiencies are possible because of substantial investments. Spending on the learning function is rising, along with costs to provide and use content. Business leaders must make numerous financial choices for their employee base, and these types of sustained investments in learning confirm that workplace learning and performance is a vital component of organizational strategy. The effects of e-learning on the profession have been dramatic, and all signs point to its influence for years to come. In fact, new technological tools and solutions enable learning content to become more dynamic than ever. Learning professionals have the ability to improve technology-based content continually and cast a wider net with its delivery. One of the most recent technological advancements involves the learner gaining the ability to control the content. And the learners themselves are able to make enhancements through Web 2.0 technologies such as wikis, blogs, and other social networking platforms. E-learning has facilitated an unprecedented information exchange between individuals, teams, and organizations. By staying at the forefront of hi-tech offerings, learning professionals are achieving exceptional outcomes. The latest results from our industry research continue to demonstrate the types of advancements attainable through a commitment to workplace learning and performance. As the business world continually shifts to meet new challenges, the learning function adapts to provide offerings that both challenge and support its audience. Millions of workers now have access to information that can stimulate their individual potential but also help secure their standing by increasing their value. With financial backing from business leaders and support from the latest technological solutions, workplace learning and performance continues to progress in its pursuit of competitive advantages. 7

9 Comparative Data Key Indicators Table 2: Key Indicators (Consolidated, BMF and BEST Averages) Direct Expenditure per Employee (FTE) Learning Hours Used per Employee Direct Expenditure as % of Payroll (Without Benefits and Taxes) Direct Expenditure as % of Revenue Direct Expenditure as % of Profit % of Expenditure for Tuition Reimbursement % of Expenditure for External Services Consolidated 2007 (n = 316) $1, % 0.56% 7.54% 12.60% 25.18% 2006 (n = 221) $1, % 0.52% 6.88% 10.64% 28.07% 2005*** na na na na na na na 2004 (n = 246) $1, % 0.63% 7.48% 10.86% 28.87% 2003 (n = 278) $1, % 1.01% 12.48% 10.08% 23.23% 2002 (n = 297) $ % 13.08% 22.63% 2001 (n = 304) $ % 12.18% 22.56% BMF 2007 (n = 25) $1, % 0.56% 6.60% 14.96% 23.75% 2006 (n = 25) $1, % 0.51% 5.86% 11.14% 30.46% 2005 (n = 22) $1, % 0.45% 8.57% 12.64% 24.83% 2004 (n = 26) $1, % 0.42% 3.95% 9.14% 30.00% 2003 (n = 26) $1, % 0.46% 6.47% 12.62% 38.26% 2002 (n = 21) $1, % 15.75% 26.38% 2001 (n = 34) $1, % 11.95% 40.50% BEST Award Winners 2007 (n = 40) $1, % 0.55% 6.74% 10.66% 22.31% 2006 (n = 42) $1, % 0.72% 7.59% 8.18% 23.47% 2005 (n = 39) $1, % 0.73% 6.61% 11.81% 23.93% 2004 (n = 29) $1, % 0.64% 8.30% 9.39% 27.49% Consolidated (2007) by Industry Services (n = 99) $1, % 0.76% 10.45% 11.01% 26.57% FIRE (n = 65) $1, % 0.48% 2.66% 16.50% 25.16% Health Care (n = 39) $ % 0.36% 13.21% 17.67% 17.42% Technology (n = 30) $1, % 0.64% 5.37% 7.82% 33.03% Manufacturing (n = 28) $ % 0.47% 5.53% 19.62% 18.57% AMC (n =15) $1, % 0.21% 9.26% 9.67% 21.43% Government (n = 15) $1, % 0.73% 3.94% 5.69% 31.16% TPU (n = 14) $1, % 0.47% 4.28% 2.37% 25.08% Trade (n = 11) $ % 0.15% 3.09% 5.51% 30.54% Consolidated (2007) by Organization Size (n = 81) $1, % 0.65% 8.17% 11.48% 35.91% 500-9,999 (n = 110) $1, % 0.48% 6.17% 12.63% 23.50% 10,000+ (n = 86) $1, % 0.61% 8.41% 12.81% 20.75% Key to Industry Abbreviations TPU = Transportation, Pipelines, and Utilities AMC = Agriculture, Mining, and Construction FIRE = Finance, Insurance, and Real Estate 8

10 Comparative Data Key Indicators Table 2: Key Indicators - Continued (Consolidated, BMF and BEST Averages) Employees per WLP Staff Member Adjusted for Outsourcing Not Adjusted Learning Hours Used per WLP Staff Member (Adjusted for Outsourcing*) Learning Hours Available per WLP Staff Member (Adjusted for Outsourcing*) Cost per Learning Hour Used Cost per Learning Hour Available Reuse Ratio** Technology-based Proportion of Learning Hours Made Available Consolidated BMF 2007 (n = 316) , $55.62 $1, % 2006 (n = 221) , $54.25 $1, % 2005*** na na na na na na na na 2004 (n = 246) , $49.99 $ % 2003 (n = 278) , $62.89 $1, % 2002 (n = 297) $ % 2001 (n = 304) $ % 2007 (n = 25) , $46.72 $1, % 2006 (n = 25) , $35.08 $ % 2005 (n = 22) , $42.05 $1, % 2004 (n = 26) , $54.17 $1, % 2003 (n = 26) , $55.94 $1, % 2002 (n = 21) $ % 2001 (n = 34) $ % BEST Award Winners 2007 (n = 40) , $45.92 $2, % 2006 (n = 42) , $47.47 $1, % 2005 (n = 39) , $48.03 $2, % 2004 (n = 29) , $58.34 $1, % Consolidated (2007) by Industry Services (n = 99) , $50.03 $1, % FIRE (n = 65) , $75.20 $2, % Health Care (n = 39) , $37.96 $1, % Technology (n = 30) , $46.03 $1, % Manufacturing (n = 28) , $50.56 $1, % AMC (n =15) , $40.69 $1, % Government (n = 15) , $55.22 $ % TPU (n = 14) , $88.53 $ % Trade (n = 11) , $78.18 $2, % Consolidated (2007) by Organization Size (n = 81) , $73.75 $1, % 500-9,999 (n = 110) , $56.62 $1, % 10,000+ (n = 86) , $48.73 $1, % * Multiply by 1-(% of Expenditure for External Services/100) ** Reuse Ratio = Ratio of Learning Hours Received to Learning Hours Provided *** Consolidated data not available for 2005 because of transition to WLP Scorecard 9

11 Comparative Data Investment Continued commitment to learning through direct expenditure and content volume The average amount of direct learning expenditure increased from $1,040 per employee in 2006 to $1,103 in 2007 among all organizations. After relatively minor fluctuations in recent years, the consolidated average showed a gain of 6.1 percent. This healthy gain in the average amount spent on learning suggests that the commitment to WLP initiatives remains strong in many organizations. BMF organizations also had an increase in average direct expenditure per employee, rising to $1,609 in 2007, which marked the largest average expenditure on record for the BMF. In contrast, the average direct expenditure per employee for BEST Award-winning organizations declined for the second consecutive year, decreasing from $1,531 to $1,451. The amount of learning content consumed by each employee on average was also on the upswing for the consolidated set of organizations. In 2007, the average number of learning hours used (i.e., received) was 37.4, up from 35.1 in Employees in BMF organizations used an average of 43.0 learning hours in For the second consecutive year, the average number of learning hours used among BEST organizations displayed a minor gain, rising from 44.3 hours in 2006 to 44.7 hours in These gains in the amount of content consumed suggest that business leaders expect the average professional to incorporate many learning activities into his or her annual schedule. Although the cost per employee has increased, organizations have successfully contributed to their employees professional development with more formal learning opportunities than in the past. Expenditure as a percent of payroll dips slightly Average learning expenditure as a percentage of payroll in the consolidated set of organizations decreased from 2.33 percent in 2006 to 2.15 percent in By contrast, this metric increased to 2.70 percent among BMF organizations. Since 2004, the average expenditure as a percentage of payroll among BEST organizations had been consistently higher than the consolidated average, but in 2007, the BEST average was much closer at 2.19 percent. $2,000 $1,500 $1,000 $800 $1,509 $857 $1,366 $1,055 $1,299 $1,022 $1,363 $1,554 $1,424 $1,616 $1,040 $1,320 $1,531 $1,103 $1,609 $1, $ Figure 1: Average Direct Expenditure per Employee (U.S. Dollars) Figure 2: Average Learning Hours Used per Employee 3.0% 2.5% 2.0% 1.98% 2.85% 2.22% 2.47% 2.31% 2.05% 2.32% 2.20% 2.86% 2.09% 2.72% 2.33% 2.20% 2.97% 2.15% 2.70% 2.19% Consolidated BMF 1.5% 1.0% BEST 0.5% 0.0% Figure 3: Average Direct Expenditure as Percentage of Payroll (Without Benefits and Taxes) 10

12 Comparative Data Expenditure Distribution Internal costs still the largest Despite the prevalence of a variety of training providers, program managers, and other learning specialists in the marketplace, organizations continue to direct most of their WLP expenditure to internal sources. Internal costs for the learning function such as learning staff salaries, administrative costs, and development costs historically have accounted for the largest proportion of learning expenditure. This trend continued among the consolidated set of organizations in 2007, as 62.2 percent of learning expenditure was allocated to internal costs. Internal costs accounted for a slightly smaller proportion (61.3 percent) of total spending in the BMF organizations in BEST organizations continued to spend more on internal services than the other groups sampled, although the percentage declined from 68.3 percent in 2006 to 67.0 percent in Outsourcing decreases again External services delivered by outside providers such as consultants, workshops, and training programs typically account for roughly one-quarter of the average learning budget. In 2007, the consolidated average spent on external services decreased for the second consecutive year, falling from % percent to 25.2 percent. The external services allocation in BMF organizations also decreased in 2007, accounting for 23.8 percent of the average learning budget. The percentage of learning budgets that went to external services has remained consistent in recent years for the BEST organizations. In 2007, external services share for the BEST Award winners fell to 22.3 percent. The need to outsource many tasks of the learning function has diminished because of the availability of internal management systems and content providers. Technology-based solutions have allowed learning professionals to execute initiatives and coordinate programs in-house that would have required outside assistance in the past. Tuition reimbursement rebounds Tuition reimbursement through educational institutions tends to account for the smallest proportion of workplace learning budgets. This category of expenditure increased from 10.6 percent in 2006 to 12.6 percent in 2007 among the consolidated set of organizations. Tuition reimbursement also increased in BMF budgets, accounting for 15.0 percent of total learning expenses. Among the BEST Award-winning organizations, the average proportion of learning expenditure was 10.7 percent in % 80% 80% 60% 65.26% 64.29% 66.69% 60.27% 61.29% 62.22% 60% 47.50% 57.80% 49.12% 60.86% 62.53% 58.40% 61.29% 40% 40% 20% 22.56% 22.63% 23.23% 28.87% 28.07% 25.18% 20% 40.50% 26.38% 38.26% 30.00% 24.83% 30.46% 23.75% 0% 12.18% 13.08% 10.08% 10.86% N/A % 12.60% % 11.95% 15.75% 12.62% 9.14% 12.64% 11.14% 14.96% Figure 4: Average Direct Expenditure Distribution (Consolidated) Figure 5: Average Direct Expenditure Distribution (BMF) 100% 80% 60% 40% 63.12% 64.26% 68.30% 67.03% Tuition Reimbursement External Services 20% 27.49% 23.94% 23.50% 22.31% Internal Costs 0% 9.39% 11.81% 8.20% 10.66% Figure 6: Average Direct Expenditure Distribution (BEST) 11

13 Comparative Data Efficiency Gains in staff capacity and delivery of content There was one learning staff member for every 227 employees on average in 2007 after taking into account variations in the percentage of budgets spent on outsourced learning activities. 2 This ratio increased for the second consecutive year among the consolidated set of organizations, suggesting that the average learning professional has a greater reach in his or her organization than in previous years. For BMF organizations, the average number of employees per WLP staff member decreased from 263 in 2006 to 244 in BEST organizations saw the average number of employees per WLP staff member decrease from 179 in 2006 to 165 in Another prominent efficiency gain seen in 2007 involved the consolidated average number of learning hours used per learning staff member. This metric indicates that on average, each organization had 5,497 learning hours used by employees for each learning professional on staff. The ratio of learning hours used per WLP staff member was even larger among BMF organizations at 7,038 to 1. For the BEST Award-winning organizations, the average number of hours used per WLP employee was 6,241 in These figures indicate the average learning staff member facilitates the consumption of a substantial amount of learning content each year. Although the average amount of learning content consumed per learning staff member has displayed growth, learning content made available has been declining on average. The consolidated average number of learning hours made available to employees in an organization for each WLP staff member was 314 in 2007, down from 326 in The figure for BMF organizations decreased considerably in 2007, falling from 467 to 291. This decline suggests an extensive amount of content retirement among some of the BMF members. For the BEST Award-winning organizations, the average number of hours offered or made available per WLP staff member was 342 in Metrics based on a ratio to each WLP staff member (average employees per WLP staff member, average learning hours per WLP staff member and average learning hours available per WLP staff member) are adjusted for outsourcing using the formula 1 (% of expenditure for external services / 100). This adjustment addresses the impact of outsourcing on effective staff resources and availability ,000 7,000 6,000 5,000 4,000 3, ,559 4,423 5,824 5,005 5,733 4,606 6,631 6,481 5,497 7,038 6, ,000 2, , Figure 7: Average Employees per WLP Staff Member (adjusted for outsourcing) Figure 8: Average Learning Hours Used per WLP Staff Member (adjusted for outsourcing) Consolidated 200 BMF 100 BEST Figure 9: Average Learning Hours Available per WLP Staff Member (adjusted for outsourcing)

14 Comparative Data Efficiency Rising costs to deliver and consume each learning hour Despite efficiency gains in other areas, organizations were forced to contend with greater expenses in learning content availability and usage in The consolidated figure for the average cost per learning hour used or received rose 2.5 percent, from $54 in 2006 to $56 in BMF organizations experienced a considerable increase in the average cost per hour used, rising from $35 to $47 per hour. The average cost per learning hour used has been holding steady for BEST organizations in recent years. It dropped slightly in 2007, from $47 in 2006 to $46. Learning content also became more expensive to make available to the average employee compared to previous years. The consolidated average for cost per learning hour available increased 7.6 percent from $1,543 in 2006 to $1,660 in BMF organizations experienced an increase in average cost per learning hour available that exceeded the rise in cost per learning hour used. The 2007 figure for BMF organizations was $1,397, which represented a 55.1 percent increase from the 2006 average of $900. However, it should be noted that the 2006 average of $900 was the smallest average on record by a wide margin. The average cost per learning hour made available for 2007 BEST Award-winning organizations was $2,241. Continued successful content reuse The consolidated average reuse ratio for learning content (i.e., the ratio of learning hours used to learning hours available) has been on the rise in the past five years, reaching 44.8 in This ratio means that every hour of content provided (i.e., available) was used (i.e., received) by learners an average of 44.8 times. These consistent gains in content reuse indicate significant advancements in operational efficiencies, which likely were aided by e-learning solutions. The average reuse ratio for BMF organizations has also been increasing steadily. The 2007 figure for the BMF was The BEST Awardwinning organizations had the highest average reuse ratio on record at 57.9 in 2007, suggesting an impressive amount of content reuse among those enterprises. $70 $63 $2,500 $2,247 $2,241 $60 $50 $40 $30 $37 $55 $46 $40 $56 $50 $54 $58 $42 $48 $54 $35 $47 $56 $47 $46 $2,000 $1,500 $1,000 $1,109 $1,430 $924 $1,113 $1,706 $1,046 $1,543 $900 $1,861 $1,660 $1,397 $20 $10 $500 $ $ Figure 10: Average Cost per Learning Hour Used Figure 11: Average Cost per Learning Hour Available (U.S. Dollars) (U.S. Dollars) Figure 12: Average Reuse Ratio (Ratio of Learning Hours Used to Learning Hours Available) Consolidated BMF BEST Costs for Formal Learning Another metric tracked by ASTD s WLP Scorecard is the breakdown of total learning expenditure by formal learning activities compared to other types of programs (such as informal learning practices, talent management, or performance improvement initiatives). Formal learning comprises structured learning activities that are conducted separate from work, such as an online lesson, a classroom event, or a coaching event. Most of the organizations surveyed for the State of the Industry report entered data for costs related to formal learning (which are a subset of costs for all types of learning content, listed in Figures 10 and 11). In 2007, the consolidated average for cost per formal learning hour used was $38, up from $35 in The average cost to make an hour of formal learning available was $1,135, up from $1,054 the previous year. 13

15 Comparative Data Content Distribution Table 3: Average Percentage of Learning Content by Content Area (Consolidated, BMF and BEST) Consolidated BMF Executive Development Managerial and Supervisory Sales Customer Service Mandatory and Compliance Processes, Procedures, Business Practices IT and Systems Interpersonal Skills New Employee Orientation Basic Skills Profession or Industry Specific Other (Quality, Product Knowledge) 2007 (n = 316) 4.75% 11.74% 5.42% 6.69% 10.67% 11.10% 9.69% 5.55% 6.15% 6.02% 14.19% 8.04% 2006 (n = 221) 4.11% 11.00% 6.32% 6.21% 8.93% 11.07% 10.24% 5.75% 6.69% 4.49% 14.45% 10.74% 2005* na na na na na na na na na na na na 2004 (n = 246) 4.96% 11.96% 5.67% 6.92% 10.54% 10.73% 10.40% 7.03% 5.80% 4.58% 14.06% 7.33% 2003 (n = 278) 5.41% 12.04% 7.57% 8.16% 7.38% 13.88% 13.34% 7.25% 5.76% 3.07% 10.89% 5.55% 2002 (n = 297) 3.28% 10.72% 4.00% 8.58% 9.65% 17.65% 10.36% 6.57% 7.14% 2.13% 9.65% 10.28% 2001 (n = 304) 4.11% 10.22% 4.56% 7.66% 7.55% 19.00% 13.00% 5.89% 7.44% 2.11% 9.22% 9.22% 2007 (n = 25) 3.64% 7.57% 4.11% 4.31% 5.25% 9.81% 19.10% 4.17% 2.33% 5.44% 26.32% 7.95% 2006 (n = 25) 3.80% 7.65% 6.20% 4.11% 7.56% 10.91% 11.66% 3.57% 2.35% 4.64% 24.38% 13.15% 2005 (n = 21) 3.02% 9.25% 4.14% 4.03% 7.83% 12.82% 19.25% 3.93% 1.90% 3.90% 18.68% 11.26% 2004 (n = 24) 3.47% 7.38% 4.88% 4.67% 7.08% 10.62% 18.10% 4.34% 4.31% 3.75% 24.34% 7.05% 2003 (n = 26) 4.51% 9.18% 5.75% 3.31% 6.70% 15.70% 18.48% 7.96% 4.06% 4.47% 13.63% 6.27% 2002 (n = 21) 7.00% 7.00% 4.00% 3.00% 5.00% 13.00% 2.00% 14.00% 9.00% 17.00% 5.00% 14.00% 2001 (n = 34) 5.00% 12.00% 9.00% 5.00% 4.00% 19.00% 13.00% 5.00% 3.00% 3.00% 11.00% 11.00% BEST Award Winners 2007 (n = 40) 4.73% 10.71% 5.12% 6.74% 11.61% 11.02% 11.96% 5.43% 5.71% 4.53% 14.70% 7.74% 2006 (n = 42) 4.58% 10.35% 5.73% 6.83% 7.06% 11.11% 12.69% 7.01% 5.15% 4.53% 15.14% 9.84% 2005 (n = 40) 4.84% 10.20% 6.79% 6.08% 10.56% 13.91% 11.62% 5.60% 4.88% 3.69% 11.29% 10.55% 2004 (n = 29) 5.80% 10.39% 5.02% 6.06% 10.21% 9.78% 11.20% 6.06% 4.76% 4.65% 16.65% 9.44% Consolidated (2007) by Industry Services (n = 99) 6.43% 11.26% 3.61% 7.86% 9.47% 11.37% 10.21% 6.15% 5.64% 7.04% 14.72% 6.25% FIRE (n = 65) 3.08% 10.71% 7.96% 8.72% 10.03% 12.61% 9.38% 5.19% 8.66% 5.03% 9.60% 9.03% Health Care (n = 39) 4.52% 15.52% 6.07% 6.55% 15.39% 8.26% 6.20% 4.63% 6.67% 3.76% 17.09% 5.34% Technology (n = 30) 4.39% 10.40% 6.27% 6.21% 3.46% 9.38% 15.47% 4.86% 4.56% 5.53% 15.70% 13.78% Manufacturing (n = 28) 4.30% 9.60% 4.10% 2.47% 12.13% 15.06% 10.14% 4.33% 6.46% 5.88% 14.50% 11.03% AMC (n =15) 5.74% 10.44% 4.99% 2.50% 17.37% 11.56% 6.91% 7.61% 4.55% 5.18% 14.01% 9.13% Government (n = 15) 1.43% 9.80% 0.02% 4.35% 7.62% 10.78% 8.93% 5.40% 3.09% 8.92% 31.31% 8.34% TPU (n = 14) 5.10% 13.52% 4.79% 5.83% 21.35% 7.16% 7.13% 5.17% 6.48% 9.58% 11.06% 2.81% Trade (n = 11) 5.70% 16.90% 10.65% 10.40% 4.70% 12.00% 8.75% 8.90% 5.20% 6.20% 5.00% 5.60% Consolidated (2007) by Organization Size (n = 81) 5.45% 12.60% 6.13% 6.90% 9.46% 11.36% 9.14% 5.71% 7.52% 6.43% 12.55% 6.74% 500-9,999 (n = 110) 4.35% 11.88% 4.45% 5.85% 11.81% 11.45% 8.87% 5.68% 6.02% 7.00% 14.43% 8.19% 10,000+ (n = 86) 4.60% 11.26% 5.97% 7.98% 8.85% 10.22% 10.97% 5.51% 5.27% 5.31% 15.57% 8.50% * Consolidated data not available for 2005 because of transition to WLP Scorecard Key to Industry Abbreviations AMC = Agriculture, Mining, and Construction TPU = Transportation, Pipelines, and Utilities FIRE = Finance, Insurance, and Real Estate 14

16 Comparative Data Content Distribution Consolidated Content Coverage The top three content areas, accounting for 37 percent of learning content in 2007, were profession- or industry-specific content management and supervision processes, procedures, and business practices. The three areas to which the least content was devoted were executive development sales training interpersonal skills. BMF Content Coverage In BMF organizations, the top three content areas, accounting for 55 percent of learning content in 2007, were profession- or industry-specific content IT and systems skills processes, procedures, and business practices. The three areas to which the least content was devoted were new employee orientation executive development sales training. BEST Content Coverage In BEST organizations in 2007, the top three content areas, accounting for 38 percent of all content, were: profession- or industry-specific content IT and systems skills mandatory and compliance. The three areas to which the least content was devoted were basic skills executive development sales training. Profession or Industry Specific 14% 15% 26% Managerial and Supervisory 8% 11% 12% Processes, Procedures, Business Practices 11% 10% 11% Mandatory and Compliance 5% 11% 12% IT and Systems 10% 12% 19% Customer Service 4% 7% 7% New Employee Orientation Basic Skills Interpersonal Skills 2% 6% 6% 6% 5% 5% 6% 4% 5% Consolidated BMF Sales 5% 4% 5% BEST Executive Development 5% 4% 5% Other (Quality, Product Knowledge) 8% 8% 8% 0% 5% 10% 15% 20% 25% 30% Figure 13: Average Percentage of Learning Content By Content Area (2007) 15

17 Comparative Data Delivery Methods Technology-based learning still on the rise, but self-paced online stabilizing Technology-based learning delivery continued its upward trend in The consolidated average for e-learning s proportion of learning hours available was 32.6 percent, up from 30.3 percent the previous year. Technology-based learning delivery methods were equally popular in BMF organizations (35.2 percent) and in BEST organizations (35.8 percent). For the first time since 2003, self-paced online learning declined in usage, falling from 19.1 percent of learning hours made available to 18.2 percent. However, self-paced online delivery continues to be the most frequently-provided type of e-learning for all groups. These findings indicate that organizations remain committed to implementing and sustaining e-learning solutions. The consolidated average for live instructor-led delivery of learning hours decreased again, falling from 71.4 percent in 2006 to 70.6 percent in In contrast, BMF organizations had a slight gain to 62.1 percent. Instructor-led learning remained at roughly two-thirds of learning hours provided in BEST organizations. Across all organizations, the majority of instructor-led delivery continued to take place in classrooms (86.7 percent), but both instructor-led online and instructor-led remote increased in usage in Technology-based learning consumption also on the upswing For the most part, the trends related to delivery methods for learning hours used are very similar to those for learning hours made available. E-learning platforms for content consumption have been rising since in the past few years, reaching 32.1 percent in The proportion of learning hours used delivered by technology-based methods was greater in BMF organizations (38.7 percent) and in BEST organizations (36.4 percent). Self-paced online consumption continues to be the most frequently-accessed technologically-based method for all groups. Consolidated BMF Table 4: Average Percentage of Learning Hours Available via Different Delivery Methods (a) Instructor-Led Real Live Instructor-Led (b) Instructor-Led Online (c) Instructor- Led Remote (d) Self- Paced Online (Networked) Computer Self-Paced (e) Self- Paced Non- Networked (CD-ROM, etc.) Print (g) Self- Paced Print (f) Non- Computer Technology (Audio/ Video) (h) Other All Instructor- Led Other Combinations All Technology- Based 2007 (n = 316) 61.18% 6.39% 3.01% 18.16% 2.81% 3.98% 2.21% 2.25% 70.58% 32.58% 24.56% 2006 (n = 221) 65.30% 4.24% 1.83% 19.13% 3.24% 2.76% 1.85% 1.67% 71.36% 30.28% 23.36% 2004 (n = 246) 68.24% 4.06% 2.40% 13.99% 3.45% 4.06% 2.59% 1.21% 74.70% 26.49% 18.05% 2003 (n = 278) 66.01% 2.92% 3.04% 12.66% 3.83% 5.28% 3.75% 2.51% 71.97% 26.20% 15.58% 2002 (n = 297) 71.08% 15.38% 2001 (n = 304) 76.00% 11.47% 2007 (n = 25) 58.11% 2.68% 1.27% 26.17% 2.97% 1.72% 2.08% 5.00% 62.06% 35.16% 28.85% 2006 (n = 25) 54.24% 3.74% 3.38% 26.04% 4.38% 3.46% 2.31% 2.45% 61.36% 39.85% 29.78% 2005 (n = 21) 54.96% 3.30% 1.37% 27.15% 4.18% 4.77% 0.91% 3.36% 59.63% 36.92% 30.45% 2004 (n = 25) 59.77% 6.14% 2.23% 23.43% 4.86% 2.36% 1.03% 0.19% 68.14% 37.69% 29.57% 2003 (n = 26) 60.85% 2.50% 4.43% 22.08% 4.41% 3.08% 1.24% 1.41% 67.77% 34.66% 24.58% 2002 (n = 21) 54.06% 28.53% 2001 (n = 34) 64.14% 21.92% BEST Award Winners 2007 (n = 40) 57.96% 5.55% 3.40% 22.12% 2.50% 4.73% 2.21% 1.53% 66.91% 35.77% 27.66% 2006 (n = 42) 59.53% 3.93% 2.55% 23.62% 3.28% 2.82% 2.48% 1.80% 66.00% 35.85% 27.55% 2005 (n = 39) 57.50% 7.28% 2.31% 21.75% 2.50% 3.92% 2.49% 2.24% 67.10% 36.34% 29.03% 2004 (n = 29) 61.00% 4.43% 1.69% 20.55% 3.16% 2.17% 4.14% 2.86% 67.12% 33.96% 24.98% Note: Consolidated data not available for 2005 because of transition to WLP Scorecard All Online 16

18 Comparative Data Delivery Methods 80% 70% 60% 50% 40% 30% 20% 10% 0% 76.0% 71.1% 66.0% 68.2% 26.2% 26.5% 11.5% 15.4% N/A % 61.2% 30.3% 32.6% Instructor-Led Real Time Technology-Based Figure 14: Comparison of Average Percentage of Learning Hours Available via Instructor-Led Real Time vs Technology Based (Consolidated) Consolidated Table 5: Average Percentage of Learning Hours Used via Different Delivery Methods (a) Instructor- Led Real Live Instructor-Led (b) Instructor- Led Online (c) Instructor- Led Remote (d) Self-Paced Online (Networked) Computer Self-Paced (e) Self-Paced Non-Networked (CD-ROM, etc.) Print (g) Self-Paced Print (f) Non- Computer Technology (Audio/Video) (h) Other All Instructor- Led Other Combinations All Technology- Based 2007 (n = 316) 61.57% 6.10% 2.85% 19.01% 2.47% 3.49% 1.67% 2.85% 70.52% 32.10% 25.12% 2006 (n = 221) 65.15% 4.21% 2.10% 19.81% 2.82% 1.53% 2.87% 1.51% 71.46% 31.82% 24.03% 2004 (n = 246) 68.81% 3.74% 2.57% 13.45% 3.50% 4.32% 2.39% 1.22% 75.11% 25.65% 17.19% BMF 2007 (n = 25) 54.48% 4.19% 1.32% 30.56% 1.84% 1.69% 0.82% 5.10% 59.99% 38.74% 34.75% 2006 (n = 25) 52.31% 4.66% 4.92% 29.31% 2.26% 3.55% 2.42% 0.55% 61.89% 43.57% 33.97% 2005 (n = 21) 63.75% 3.08% 1.20% 23.02% 2.44% 2.71% 0.72% 3.07% 68.04% 30.46% 26.10% BEST Award Winners 2007 (n = 40) 60.43% 5.82% 3.44% 20.78% 2.65% 1.98% 3.75% 1.15% 69.69% 36.44% 26.60% 2006 (n = 42) 57.67% 4.30% 3.09% 26.30% 2.85% 2.24% 2.16% 1.39% 65.07% 38.71% 30.60% 2005 (n = 39) 59.55% 5.39% 2.40% 20.37% 3.30% 3.93% 2.97% 2.08% 67.35% 34.44% 25.77% Note: Consolidated data not available for 2005 because of transition to WLP Scorecard All Online 50% 40% 30% 25.6% 35.2% 34.3% 30.5% 34.4% 31.8% 43.6% 38.7% 32.1% 38.7% 36.4% Consolidated 20% BMF 10% 0% BEST Figure 15: Average Percentage of Learning Hours Used via Technology Based Methods 17