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Home > News > March 2006 > 27-Mar-2006

Training budgets hit by economy fears says survey

The success of organisational change in major organisations is being jeopardised by a failure to put in place adequate training and development measures, according to the 2006 Learning and Development Survey from the Chartered Institute of Personnel and Development (CIPD).

The CIPD says their survey also reveals employers fears of a worsening economic situation over the year ahead, with these fears translating into a decline in the funds available for training in many cases - particularly in public sector organisations.

Training and organisational change

According to the survey, two thirds of organisations (67%) say that insufficient training and development is in place to follow organisational change initiatives over half (56%) say that the training and development implications of change are simply not thought through. The CIPD says that separate CIPD research shows that major organisations can expect to undergo major restructuring, on average, every three years, and that 40% of these reorganisations fails to deliver on its objectives.

The '2006 Learning and Development Survey' found that 45% of reorganisations only involve learning and development professionals after all the major decisions have been made or at the final stages of the project. A further 9% do not involve learning and development professionals at all. On the plus side, the CIPD says their survey found that 27% of organisations involve learning and development professionals from the initial planning stages, and in a further 19% of organisations they are brought in at the initial implementation stage.

Jessica Jarvis, CIPD Learning and Development Adviser, said: "Any organisation planning a major reorganisation needs to plan resource issues, from IT implications to office space and furniture. But this research shows that many organisations don't pay the same level of attention to managing their human resources. Employers that do not equip their staff with the training and development needed to work effectively after a major reorganisation are running the risk of undermining their own objectives."

Economic circumstances and learning opportunities

The 2006 survey also found that twice as many employers believe that economic circumstances have got worse for their organisation than better during the past 12 months (41% and 19% respectively). Since last year there has been a particular decline in the expectations of public sector employers. In the 2006 survey, 56% of public sector employers expected circumstances to worsen (42% in 2005).

33% of organisations reported that their funds for training have declined in the last 12 months, and only 17% experiencing an increase. The survey found that the public sector has seen the most marked decline with 42% of public sector organisations seeing their training budgets squeezed (29% in 2005).

Jessica Jarvis said: "The public sector is experiencing rapid change, significant reorganisations, and sustained pressure to find efficiency savings. But cutting training budgets at a time when employees need to deal with changing roles and structures is a false economy.

"More generally, although employers are expecting weaker economic conditions CIPD research also shows that recruitment difficulties remain severe and are unlikely to ease significantly. Against this background, a reduction in training and development opportunities for existing staff may harm productivity and efforts to retain talented staff."

Other findings from the CIPD survey included:

Changes in workplace learning:

. The slide of the formal training course from its once pre-eminent role in workplace learning continues. 56% of learning and development professionals now tell us that on-the-job training is the most effective way for people to learn in their organisation. Only 17% say that formal training course takes this accolade in their organisation.

. In keeping with the last finding, 84% of organisations tell us that they now encourage learners to take more responsibility for their own learning and development.

. Two-thirds believe that learning and training is now taken more seriously by senior and line managers (63% and 68%), and 58% believed the department has far more credibility than before.

. Implementation of new programmes to develop the roles of line managers is the most common change to workplace learning practices in the past 12 months.

. Only 42% felt that a career in learning and training is now more appealing.

Developing a coaching culture:

. Four out of five organisations now use coaching as part of their efforts to develop their people (79%).

. 80% of those using coaching state that their organisation aspires to having a coaching culture and 75% state they are investing time and resources to achieve this aim.

. 53% of organisations using coaching employ dedicated internal and external coaches for this purpose.

. However, the most popular means by which coaching is delivered is via the training of line managers to fulfil this role. Four fifths of organisations using coaching (82%) train line managers to act as coaches, and for nearly half (47%) this is the only means by which they deliver coaching.

. No doubt partly because of the predominance of line-manager delivered coaching, 69% of organisations say that the coaches they use are not accredited, certificated or licensed. A further 19% say the coaches they use are only accredited, certificated or licensed "to some extent".

. 54% of respondents said that those involved in coaching activities were not rewarded and recognised for their efforts.

Training spend:

. The average spend on learning, training and development per employee in 2006 was £469 a fall of 23% since last year's survey (£607 per employee).

. Private sector employees are the beneficiaries of the highest per head spending budget, weighing in at £488 per person. The voluntary sector has the lowest at £438, while public sector employees sit in the middle with a per head spend of £447.

External links

HRD 2006 takes place at London Olympia from 4-6 April 2006. For more information visit

The CIPD says their Learning and Development Survey 2006 will be available at from 4 April 2006.

Training Reference is not responsible for the content of external Internet sites.

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