America’s Trillion Dollar Training Problem

In the last few years, we in the U.S. have all heard a lot about "trillion dollar" problems – health care reform, bank bailouts, automaker rescues, etc. However, not much is being said about the trillion dollar training problem.

Last year, organizations spent $134 billion dollars on training in the U.S, according to the American Society for Training and Development. However, only 15-30 percent of learning transfers into actual use on the job to improve performance. That means that somewhere around $100 billion of it was wasted! And that is only the direct cost of training – not the salaries of the people who sat in the classroom. That alone is a huge and alarming number.

But it gets worse.  Economists talk about something called opportunity costs.  In the case of training, research shows that an 8:1 return on investment is quite achievable for the right learning given to the right employees. That means that the $100 billion we wasted would have returned about $800 billion in performance improvement – if we had done the right things to make learning transfer happen.
 

So our equation is:

   $93.8 billion (on the low end) spent on training that didn’t transfer

+ $700 billion in returns we could have had

+ salaries of the wrong participants in training

= TRILLION DOLLAR TRAINING PROBLEM

Each year we waste as much money as the U.S. government spent to bail out the banks, AIG and the automakers, and equal to the cost of the Obama health care reform over ten years. And we do this annually! Imagine what the cost is worldwide. It must be simply staggering.

We should not accept this in our profession; we should strive for better. Can you think of another profession that wastes 70-85 percent of its expenses and gets away with it?

 
I believe we are responsible for one of the most powerful investments an organization can make – improving the expertise of its employees. I want us to be proud of the great contributions we make to improve our organizations. I want us to make a difference.

The only way we can do it is to solve the transfer of learning problem. Following are tips you can use to increase the percentage of learning transfer to the job:

• When designing training, include behavioral objectives – state how behaviors will change on the job as a result of training. We are not in the learning business – we are in the performance change business, and learning is our tool to achieve it.

• Conduct assessments to identify barriers to learning transfer.

• Make sure that every course has both prioritized behavioral objectives that define job behavior outcomes as well as learning objectives.

• Devote as much time during the course to practical application as you do to delivering information and concepts.

• Make your training “just-in-time” so the time lapse between training and job application is minimal.

• Develop a network of already trained workers who can help new trainees quickly apply their learning.

• Use accepted adult learning principles to build buy-in for the training.

• Make the performance problem or need clear to trainees.

• Use training as an opportunity to build trainees’ confidence that they can learn to apply new techniques.

• Have supervisors develop a “transfer contract” with employees BEFORE training to clearly identify goals and support.

• Develop a follow-up mechanism to remind trainees of action goals and collect feedback on challenges they face during learning transfer.

Dr. Ed Holton is the Jones S. Davis Distinguished Professor of Human Resource, Leadership, and Organization Development at Louisiana State University and CEO of Learning Transfer Solutions Global. Used with permission. This article first appeared on Holton’s blog here.