4 Reasons Why Companies Are Increasing Employee Training Budgets
One of the most iconic movie lines ever comes from Field of Dreams: "If you build it, they will come."
Corporate training professionals have developed their own mantra when it comes to employee training: "If you train them, they will excel."
That is essentially the logic fueling the trend of expansion in corporate spending on employee training.
U.S. training expenditures are expected to rise significantly this year, building off of 2017's 32.5 percent increase in spending to $90.6 billion, according to Training Industry.
Major Fortune 500 companies are leading the way, with small- to mid-size companies following suit.
Recently, global retail giant Walmart announced it was equipping all of its U.S. stores with Oculus virtual reality headsets containing more than 45 activity-based modules with training content on new retail technology, soft skills, and compliance issues. The headsets reportedly will give Walmart workers direct access to the training provided to managers and department managers at the company's training academies. "The great thing about VR is its ability to make learning experiential," Andy Trainor, senior director for Walmart's US Academies, said.
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The company announced the headsets will train about one million Walmart workers in the company's more than 4,700 US stores.
“Retail is changing,” Erica Jones, a Walmart spokesperson, has explained. “The way customers shop is changing. We need to provide our associates with more tools to keep up with the times.”
And Walmart—which ranks #1 on the Fortune 500 list with revenue of $500.3 billion—isn't just investing in virtual reality training. The retailer has slowed store expansion in order to invest in remodeling and raising employee pay—and last year launched a drive to open dedicated training sites in about 200 select stores across the country.
Walmart is perhaps just the highest-profile company to be part of a trend of increasing investment and attention on workforce training. Remember when Starbucks completely shut down every store earlier this year to focus on ... training its 175,000 workers for four hours on racial sensitivity?
This training trend is showing no signs of slowing.
Respondents to an industry survey who reported an increase in their training budgets cited these main reasons:
- Increase in the scope of training programs
- Expansion of training staff
- A higher number of corporate learners served
- Purchased new technologies/ equipment
In addition to spending more on training, data show companies simply offer more hours of training to employees. On average, employees receive about 48 hours of training every year—with midsize service providers holding the highest average number of hours overall with a whopping 75.5 hours.
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