Organizations of all sizes are constantly looking for ways to reduce training costs and improve profitability. Developing the necessary skill set and competencies so that employees may reach peak performance is a necessary, yet costly investment.
According to the 2016 Training Industry Report from Training magazine, the annual training budgets of US large companies averaged $14.3 million. For mid-size firms, the average expenditure was $1.4 million while small firms (defined as having less than 100 employees) allocated an average of $376,251 to training programs.
If we break it down even further, the difference becomes apparent as large organizations spent an average of $379 per learner while mid-size firms spent an average of $870 per learner and small companies an average of $1,052 per learner.
Aside from the monetary expenditure, there is the time factor. This same study shows that employees in larger firms are receiving 43.8 hours of training per year. For small firms, that number rises to 49.6 hours. That’s time that could be better spent on revenue-producing activities, such as business development, billing or production.
The question becomes: how do companies reduce training expenditures and boost employee performance while at the same time realizing ROI goals? The answer: by the incorporation of Blended Learning Strategy into corporate training programs. The two most significant benefits of the Blended Learning Strategy are learner retention and economies of scale which we review below. But first….
What is a Blended Learning Strategy?
To put it simply, blended learning is a hybrid strategy utilizing both classroom and Web-based learning methodologies. The methodology was first used in classroom environments to provide differential learning delivery but has been gaining much ground within the business sector over the past several years since the principles are widely applicable to corporate training needs. It is set to become the training method of choice across all industries.
In a blended learning approach, some of the learning will be instructor-led in a classroom while other parts will be conducted online via WebEx, podcasts, etc. An effective approach is to present a video or podcast followed by classroom discussion to clarify certain points. In effect, classroom learning is best reserved for structured activities that will benefit from live interaction such as a question-and-answer period or that emphasize the application of a given principle.
Blended learning has four primary components:
- Content planning: This is the material that will be presented based on the goal of the training. What are the knowledge or skill-based expectations?
- Classroom instruction delivered by a trained facilitator: As in the diagram, this can include direct instruction, peer-to-peer coaching, project-based learning, and game-based learning.
- Technical integration for online learning: What is the platform on which the eLearning will be based? In making this decision, keep in mind that you may have a mobile workforce (e.g. a field-based sales team) that will need to access training while on the road.
- Global Connections: This refers to the fact that the eLearning will enable instruction to be presented company-wide and enable employees in different areas to develop communication channels and support networks.
The ROI of Blended Learning
Pay Attention to Retention!
It is a widely-held education precept that knowledge retention is enhanced when new elements are added to the learning experience. Blending online instruction with in-person interaction results in a more dynamic learning experience and helps employees retain the information much faster than if they were presented with solely a two-hour lecture or two-hour WebEx video. The classroom session with in-person discussion and activities serves to solidify information in the learner’s mind since employees will be taking an active and interactive role in the instructional process.
One other advantage of the blended learning method is that it ensures all learners are on equal footing in terms of knowledge gain when attending the instructor-led training session. In other words, the video provides the same instruction to all learners, whereas a trainer-led session may have resulted in some material inadvertently being omitted or certain parts highlighted over others due to trainer bias.
Economies of Scale
The second major benefit of blended learning approach is that instruction can be scaled via online methods so that the information can be presented to many employees rather than a select group. Instructor-led training can then be used for any questions or issues that arise. An important benefit is that any face-to-face training will be shorter than a full-length session as it will only be comprised of Q&A and discussion.
Also consider that the cost to produce learning materials can be prohibitive, whether presented online or in a classroom setting. An eLearning approach fosters ROI because overall production cost is lowered the greater the number of employees participating and frequency of events. This explains why large companies report comparatively lower per-person training costs than smaller firms.
Research has shown that implementing a blended strategy lowers training costs and allows you to devote resources to other areas of the budget. This results in a highly effective training program in terms of retained learning.
Let’s look at some examples:
- Implementing eLearning methodology allowed Ernst and Young to reduce its training costs by 35% and reduce overall training time to 53%: they were able to condense 2.900 hours of instructor-led training into 700 hours of online learning, 200 hours of distance learning, and 500 hours of face-to-face instruction. (An Assessment of the Effectiveness of e-Learning in Corporate Training Programs by Judith B. Strother).
- In the report above, Strother also notes that IBM experienced significant gains by cutting training costs by nearly $200 million, which represented one-third of its training budget.
- A case study prepared by Clive Shepard cited that Dow Chemical reduced its training costs to $11 per employee when it implemented a blended approach. This is a tremendous reduction when the previous costs with traditional classroom-based instruction were $95 per employee.
- A second case study by Shepard shows that Cisco reduced its overall training expenditures by approximately 40% to 60% when the company incorporated eLearning methodology, while also fostering improved job performance and job effectiveness.
A Blended Learning Strategy offers an organization of any size the ability to significantly reduce training costs by fostering process efficiencies which enhance employee knowledge, skill development, and overall job performance. The combined benefits of lower training costs and increased productivity can’t help but positively affect your company’s bottom line; investing in a blended strategy is money well spent—or, in this case, not spent!
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- Blended Learning: A Training Strategy that Fosters ROI - October 23, 2017