Learning & Development

Training Budgets Remain Largely Flat in 2022, But Allocations Shift

With growing wage pressure, historic inflation, and recession fears on the rise heading into 2023, one might expect training and development budgets to be on the chopping block for many organizations, as they have so often been in the past when money got tight.

Fortunately, recent data suggests that annual U.S. training expenditures per employee actually rose slightly in 2021 compared with 2020.

Focusing on Training in Different Ways

Despite training budgets holding mostly steady, companies aren’t spending that money the same way they have been in the past. Instead, a greater proportion of budgets was being allocated to training of people managers in 2021 (20%) compared to 2020 (13%).

This shift reflects a growing appreciation for the force multiplication effect of supervisors in steering the course of an organization. In addition, it recognizes the added challenges managers face in remote and hybrid work settings.

Line Employees Need Training Too

At the same time, the fact that budgets have remained steady means allocating more money for training managers and leaders means less money for everyone else. With the continued mix of remote, in-office, and hybrid work—among myriad economic, technological, and other dynamic factors—frontline employees and other non-managers can also certainly benefit from additional training.

Unless employers find better, more efficient ways to train staff, they will struggle to keep up with this ever-changing environment.

Technology Can Be an Aid

Many organizations are turning to new technologies to help bridge the gap. Online, on-demand training content can be a readily accessible and cost-effective strategy to do more with less.

Additionally, by increasing spending on managers’ and supervisors’ training, many employers may be betting on the fact that better managers will be better manager-trainers and mentors to staff—a kind of trickle-down training approach.

Despite significant financial strain and uncertainty amid a variety of global economic factors, companies are, on average, holding the line when it comes to learning and development budgets. That doesn’t mean this money is being spent in the same way, however.

Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.

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