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A Review Of L&D Budget Allocations In 2020

L&D budgets in 2020 were adapted to meet new demands of a remote workforce. See how L&D strategies met the changing needs of teams and what technologies were most commonly used!

6 Nov 2020 by Rocco Brudno

Every team and business has shifted its L&D budget in 2020. For many teams, this meant transitioning employees to partial or full remote work. For other teams, this meant making budget cuts to talent development programs. In either case, a major shift toward online training platforms happened in 2020.

Being able to adapt to how COVID-19 impacted your team while still maintaining operations was a learning lesson for all of us. But something unique that happened (and as you’ll find below) is that with the right L&D tools, any team can adapt.

Our team worked with Brandon Hall Group to see how teams and businesses adapted their L&D in 2020. We reviewed methods of training delivery, overall budget allocations, shifts we saw this year compared to 2018, and how to create your own L&D budget. Let’s dive in, shall we?

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What learning technologies did L&D budgets focus on in 2020?

Every year, Brandon Hall Group surveys a wide range of companies and teams in various industries to offer human capital management guidance and data. We used this data when analyzing learning and development budget allocations for 2018.

For 2020, with consideration to the teams that were affected by COVID-19, we approached L&D budget allocations differently. This year we’re including the below review on talent development resources leveraged most during 2020. We hope this informs you both on what technologies were used most, as well as give you some ideas on what’s available.

L&D staff used a variety of training delivery methods to enable and grow their teams, as seen by the formats below. The following data is from Brandon Hall Group’s “Learning and Development Benchmarking Survey” in 2020.

Types of learning modalities that saw increased use in the study

Social/ Collaboration Tools increased by 🔼 60%

  • Think communication platforms like Slack or Microsoft Teams that enable teams to collaborate even when working remotely.

Podcasts increased by 🔼 82%

  • These are great instructional tools for teams that can’t always read the latest news but have an hour to learn while in traffic or on a run.

Video Learning increased by 🔼 19%

  • Both evergreen (reusable) and personal video have grown into powerful communication methods for teams.

Virtual Synchronous Classrooms increased by 🔼 21%

  • Very similar to in-person training, these classrooms operate virtually while still enabling the “instructor-led” style of training.

eLearning Modules increased by 🔼 85%

  • Whether an online course with an LMS or a component of an online training platform, these modules enable rapid sharing of knowledge.

Mobile Learning Delivery increased by 🔼 7%

    • By ensuring your training is mobile learning ready, you enable your team to access the knowledge when it suits them best.

Of these training delivery methods, eLearning modules were a highly used modality. Even with the standard growth we’ve seen in the last two years, this was a bigger uptick. We think this is because online training enables remote teams to maintain work continuity (we happen to know of a great solution for delivering online training too).

The emergence of “microlearning” as a new modality was surprising to us. L&D professionals have been applying the concept of breaking down learning into bite-sized chunks for a while. However, this is the first time microlearning became a stand-alone modality. This is most likely due to online training platforms that enable this type of training.

What was the L&D budget allocation for teams?

The majority of businesses didn’t shrink their L&D budgets in 2020 but rather shifted, and in some cases, expanded them. A trend we found was that more than half of all companies commit their talent development allocations to under one million dollars. And less than sixteen percent allocated more than five million dollars for the learning and development strategy.

We think even considering some outliers, the majority of businesses allocated their L&D budgets well in early 2020. It was how they pivoted after COVID-19 that made the biggest difference in spending.

Shifts in L&D budget allocation for companies

Below we’ve broken down the average L&D budget by company size. The information comes from the Brandon Hall Group’s “Learning and Development Benchmarking Survey” pub in 2020.

Small-sized businesses’ budgets in 2020

Small-sized businesses' employee sizes were between 100-499. We think the upper end of the staff size is where the budget allocation goes over one million. SaaS companies like Outreach would be in that larger budget range of orgs.

Mid-sized businesses’ budgets in 2020

These felt like the outlier group as the numbers were only slightly higher while the team size dramatically increased. Mid-sized businesses had between 500-4999 employees, which makes us think most of the respondents were closer to 500 based on response. HubSpot is a perfect example of a mid-sized company that still leverages small-sized business tools at a larger scale.

Large-sized businesses’ budgets in 2020

This is where we see the uptick in talent development budgets. Most notably, with large-sized businesses having over 5000 employees, the need for scalable solutions is paramount. Their budgets reflect this too with more of this range spending more for dedicated L&D resources to maintain size. Companies like Salesforce are a great example of an effective learning and development strategy in action.

We then compared these numbers with Training Magazine’s 2019 Training Industry Report to see what the average spend on learners is per company size. Something to note about this report is the respective employee sizes for the report differ from above: Small - 100-999, Mid - 1000-9999, and Large - 10,000+.

  • Small-sized businesses spent 1511$ per learner, 🔼 28% from 2018.
  • Mid-sized businesses spent 829$ per learner, 🔻4% from 2018.
  • Large-sized businesses spent 1544$ per learner, 🔼 33% from 2018.

We can gather by the Brandon Hall Group findings that these numbers have increased as teams adapted to various forced market-shifts in 2020.

COVID-19 demonstrated the crucial role L&D professionals can play in helping an organization adapt to unexpected changes. Training budgets are great for enabling employee engagement and team growth. But now, many organizations are also looking to leverage L&D strategies to prepare for the unexpected and enable team readiness.

What shifts did we see in talent development technologies?

The biggest shift this year was businesses adopting or increasing online training for their teams. This style of learning enabled teams to continue the flow of work, onboarding new staff, and adapt to remote work environments. All while improving their ability as a business to pivot to market changes.

Before we dive into what technology shifts affected L&D budgets, we wanted to discuss the direct cause of these shifts. With the impact COVID-19 had on team operations, many L&D strategies had to pivot to enable working remotely for as many roles as possible. Below are some findings of what shifts the workforce had in 2020 that correlated to shifts in L&D budgets and training technologies.

Shifts in where workforce operations

Just in the past year, companies saw more than five times increase to their workforce that operated remotely. That’s a huge shift in just how roles functioned, not to mention the IT nightmare of enabling teams to work securely from home.

We found some interesting metrics tied to the impact of COVID-19 on teams and how working remotely affected them. Below are stats pulled from Brandon Hall Group’s “The Impact of COVID-19 on Human Capital Management” which surveyed 271 respondents in June.

Impact of COVID-19 on L&D Strategies in 2020

  • Companies said the use of digital learning will increase by 30% or more.
  • Employees losing connection with managers rose by 128%.
  • Prioritizing talent development strategies that improve adaptability rose by 22%.
  • Employee productivity stayed the same or increased in 58% of companies.
  • Training employees on remote work technology was rated as a high priority by 62% of companies.
  • 72% of companies said eLearning modules were the “Go-To” technology tool for converting live-ILT learning (Instructor-led Training).

The rise or consistency of productivity was especially impressive when considering that most employees said their biggest distraction was at home. We think the loss of connection between individuals and their managers makes sense when connected with the technology shifts we mention below.

L&D strategies shift to online training focus

Leveraging online training tools makes sense to companies with that high of a shift in their workforce transitioning to remote work. Increasing knowledge access and employee engagement have been proven to maintain productivity for remote teams.

Most of the modalities that saw growth in use this year were components of online training best practices. Below, we’ve included some info on the percent of businesses that use an LMS, and what tools were important based on business size. The information came from Brand Hall Group’s “The State of Learning Technology” report in 2020 which covered 273 respondents.

Below are the percentages of organizations by size that use an LMS for their learning and development strategy:

We think the two most interesting pieces of information here is that:

  • Most respondents had a learning management system in place.
  • The length of tenure (3+ years) most companies had their solution.

These responses confirm our above statements that most organizations have the means to transition to online or remote work but weren’t prepared adequately (who was?). Firms hit hardest were not expecting a global event like COVID-19 to drive the transition. You could say the events of 2020 accelerated the growth of online training for firms that initially undervalued it.

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L&D training modality technologies

What were some of the technologies were on most firms' L&D budgets alongside their LMS? Below we’ve listed the top five for each business size.

Even though all five top technologies were the same, how each is prioritized differs by business size. Video platforms that enable personal communication were valued by smaller firms while authoring tools were chosen for larger firms.

Microlearning was the third pick for all three, validating it as an integral modality in L&D strategies. New online training authoring tool software enables rapid microlearning creation—making it incredibly easy for teams to mix it into their training process.

Coaching and mentoring make sense to maintain team morale with the rise of teams not accustomed to remote work,. Combine these with a video tool to have weekly 1:1’s between employees and managers. We can attest to the benefit of mentoring sessions with remote staff—we have weekly check-ins and monthly company meetings to make sure everyone is confident and enabled for success.

What caught us by surprise was how important content curation solutions still were. All in one online training platforms like Coassemble combine authoring, delivery, and curation tools. These tools aren’t new either—which tells us companies are working with an LMS that isn’t approaching online training holistically. This is why we aren’t surprised to learn that 43% of these companies are looking to replace their current LMS.

You can maximize your L&D budget while lowering costs by consolidating your training resources. Many SaaS firms in the LMS space offer solutions that combine many of the tools listed above in one platform. This can often save money and increase the value of the solutions you have, improving your learning and development strategy.

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Shifts in training delivery frequency

The shift in how online training is valued in 2020 was made clear by Brandon Hall Group’s HCM Outlook 2020 report. In the report, they found that “42% of businesses said employees needed to interact with learning resources weekly to effectively do their jobs.”

We don’t disagree with this statement but would like to add that in addition to weekly training, it’s beneficial to create accessible resources. Rather than thinking of training as something to deliver, consider how you can make knowledge accessible when your team needs it. Mobile-ready training and microlearning are great learning modalities that increase knowledge access to your team.

This review of L&D budget allocations in 2020 isn’t exhaustive and will adjust once 2020 comes to an end. But we hope this information is useful to help you develop or revise your L&D budget and strategy. For more help on how to improve the training process for your team or solutions that can help you grow your business at scale, chat with us! Our experts are always available to offer you the best industry guidance.

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