Reducing training-related costs is the chief driver in launching an e-learning initiative. Nearly 75 percent of corporate learning professionals indicated that reducing education and training costs was their main driver for launching an e-learning initiative, followed by providing training to a geographically dispersed workforce (63 percent), building employee skills (46 percent), delivering just-in-time information (42 percent), and delivering to a large audience (40 percent). Corporate learning practitioners indicated they saved approximately 20 percent in training-related expenses by delivering e-learning programs.

The percentage of corporate education programs delivered via the classroom is expected to decrease significantly by 2003 from 64 percent to 39 percent.

The paradigm for training and development has changed from being a one-time event to more of a process. Learning is being incorporated into all stages of an individual's career and the distinctions between formal and informal learning and training and performance support are blurring. Based on these changes, many best practice organizations have realized the great potential in converging knowledge management systems with e-learning systems. Both systems share the one common goal of diffusing knowledge throughout an entire organization. Cap Gemini Ernst and Young, First Consulting Group, and Level 3 Communications are examples of the many organizations that have taken on this effort.

Knowledge management systems were common among organizations that launched their learning initiative 3 - 5 years ago (57 percent), organizations that offer more than 100 courses (55 percent), and organizations that have invested more than 30 percent of their overall education/ training budget in e-learning. IT and professional services organizations were also trendsetters in this area; with over 60 percent indicating their e-learning infrastructure contained a knowledge management system

While the trend in e-learning is to focus on tangible topics, such as computer applications or IT-related topics, we predict that in the next 12 - 18 months more corporate learning organizations will provide e-learning courses that focus on the "softer" side Currently, e-learning courses for the most part focus on technical training topics, such as computer or IT-related topics (63 percent), followed by functional training or topics specifically related to an e-learner's job (18 percent), and soft skill training, such as leadership or management development (18 percent). e-Learning technologies have become a proven way for corporate learning organizations to get a consistent message across the organization to large groups of people quickly. In addition, organizations have leveraged e-learning technologies for their new hire orientation programs.

Corporate learning organizations are leveraging eLearning to provide education programs and services to their customers. For the most part, corporate learning organizations are targeting their eLearning efforts to technical/IT employees (79 percent), customer service representatives (70 percent), sales employees (69 percent), first line supervisors (69 percent), professionals - excluding IT staff (69 percent), middle managers (67 percent), and administrative employees (67 percent). Twenty-three percent of corporate learning organizations target their programs to external customers and 13 percent target to suppliers. IT/professional services firms and mature learning organizations (organizations that began offering eLearning programs more than 5 years ago) were more likely than any other segment to extend their offerings to external customers. "Educommerce," using education to drive commerce while reinforcing a company brand, is the latest phenomenon sweeping the corporate education marketplace. While providing education to customers and suppliers is an old practice, the ability to deliver education to these audiences via eLearning technologies is expected to make a tremendous impact in the corporate education marketplace.

Texaco doesn't view its knowledge management projects as a
"separate investment that must generate standalone returns".
The focus in usually on improving processes or creating new ways of working.

In general, professionals can spend as much as 3/4s of their time looking for sources or
information needed to do their jobs, so making that process faster will automatically increase productivity,
Information Week, 9/6/2001, Employees Share Pearls of Wisdom



A recent IDC study found that “knowledge workers spend 15 percent to 20 percent of their time actively looking for specific information; however, these searches are successful less than 50 percent of the time.” Just calculating the time spent in the unsuccessful searches, the study found that “these unsuccessful searches could cost a company employing 1000 knowledge workers $6 million in time lost.”

The relationship between education and productivity at more than 3,100 U.S. workplaces was studied. The study controlled for factors like the age of equipment, industry, and establishment size. On average, a 10% increase in the workforce education level led to an 8.6% gain in total factor productivity. By comparison, a 10% rise in capital stock - that is, the value of equipment -increased productivity by just 3.4 percent. The marginal value of investing in human capital is about 3 times greater than the value of investing in machinery. Also, for every year of additional education in a city's workforce,productivity goes up about 2.8%.
Philadelphia: University of Pennsylvania, 1995.


.
... a research project initiated in 1996 by the Education Development Centre Inc. (EDC) of Massachusetts. The study was based on in-depth research involving more than 1,000 employees at seven companies in seven states,
including Motorola, Boeing, Ford Electronics, and Siemens.

The two-year study was conducted by the Center for Workforce Development, a nonprofit research and development organization affiliated with the Education Development Center in Newton, Mass. The $1.6 million study was funded by the U.S. Department of Labor, The Pew Charitable Trusts, and state economic or workforce development agencies from Connecticut, Florida, Massachusetts, North Carolina, Pennsylvania, and Washington. The study has "profound implications on corporate culture, worker satisfaction, productivity, and improving the rate of innovation," according to Monika Aring, co-director of the research project. "researchers calculated that every hour of formal training yielded a four hour spillover of informal training. Motorola is proud that it offers 40 hours of training a year to each employee and now questions if that is sufficient. Motorola has calculated that it receives an ROI of 30 dollars for each dollar it invests in employee training.

The researchers identified 13 work-related activities during which most informal learning occurs.   Among them

Teaming, which brings together employees with different skills and responsibilities within the organization to address problems or goals.    Meetings, especially those at which employees at many levels are encouraged to express opinions.   Customer interactions, especially in companies where customer feedback is encouraged.    Mentoring, which was most commonly observed as a voluntary and loosely structured association between a novice and more experienced employees.    Peer-to-peer communication, which is characterized by interactions among employees at all levels.

Training, Jan, 1998, Learning Ecologies, David Stamps 
(A copy of the original study can be purchased at https://secure.edc.org/publications/prodview.asp?1029)



Training focuses almost entirely on formal learning. But half to 70% of learning is informal.
Elliot Masie 2002



100 percent of technology workers reported that they had to stop their work several times a day to either look for information to do their jobs or to provide information to co-workers needing help. The study concluded that “the data shows technology workers spend an average of seven hours per week—more than 31 hours per month—looking for answers, researching issues and solutions for problems, and helping colleagues do the same. The study found that by providing content directly in the workflow, workers could save 3.3 hours per week for “a monthly time savings of 13.5 hours or just over four labor weeks per year.” 

An enterprise with 500 technology workers each spending 7+ hours per week hunting down answers and information costs a whopping $7.5 million per year in lost productivity.  This essentially cut lag time by 50 percent, and on average, saved more than US$6,000 per worker, per year
Information Gathering in the Electronic Age: The Hidden Cost of the Hunt, Safari, January 2003



Average company spends 85% of operating costs on payroll and less than 1% for training those people.
There is an estimated 30-1 payoff to improved performance and profitability from proper training.
Brian Tracy - The Effective Manager



The effect of training on productivity growth is approximately five times
as much as would be generated by compensation incentives.
Barron, Berger, and Black, 1993; Bishop, 1991



According to a Business Week article (March 1, 1999), Interim Services and Louis Harris and Associates conducted a survey that measured the cost of not mentoring employees and providing poor training. The article stated: "Among employees who say their company offers poor training, 41% plan to leave within a year, vs. only 12% of those who rate opportunities excellent. High turnover isn't cheap.
The survey pegs the cost of losing a typical worker at $50,000."



Workers who want training via computers, TV or internet - 61%
Workers who say they receive it - 21%
May 2000, Training, Rutgers University report



Impact of Improving Customer Service
Better service performers charged about 9% more for their products/services.
Better service performers grew twice as fast and picked up market share at 6% per year,
while those with poor customer service lost 2% a year.
Profit Impact of Marketing



Great service providers earned a 12% return on sales, Vs 1% for the rest.
Strategic Planning Institute



There is no significant statistical difference in job performance
between hiring an inexperienced sales person and training them
vs hiring an experienced person.
Summarized statistics from Harvard Business Review, Vol 58, No 5.



25% of workers said they were capable of doing 56% more work.
Why don't they?
33% mentioned one or several of the following reasons:
Not being involved in decision making
Lack of reward for good performance
No opportunity for advancement.
Lack of quality supervision
Inadequate Training
Compensation and Benefits Review, American Management Association, 1997



What motivates Generation X?
Give them responsibility for projects.
Offer constant feedback instead of annual performance reviews.
Help them train for another job.
Offer them access to many different kinds of information.
Adapted from HR Focus, American Management Association, reported in The Motivational Manager, 1997



What companies are looking for in employees
  -Ability to learn
  -Ability to listen and communicate information
  -Innovative problem-solving skills
  -Knowing how to get things done.
Survey from ASTD, 1997



A four-year study by the American Society of Training and Development, 2000
Firms who invest $1500 per employee in training
compared to those that spend $125, experience on average:
24% higher gross profit margins and 218% higher income per employee!