Organizations are now spending more on corporate training than they have in more than seven years. According to Bersin by Deloitte’s 2014 Corporate Learning Factbook, U.S. companies increased their spending on corporate training by 15% in 2013. Training is now a $70 billion industry in the United States and a $130 billion industry worldwide.
This is surely a good sign for the economy, and for training professionals, but what does it mean for companies? Well, it doesn’t mean that all of these organizations are suddenly flush and have extra money to spend. Instead, organizations are facing serious skills gaps that are already threatening their bottom line and promising to have even more of an impact in the future. Employees require much more training than companies were previously providing, and it is taking a toll. So while businesses may have increased their L&D budgets by 15%, they are expecting a much greater increase in both the amount and the quality of the training provided.
Massive open online courses (MOOCs) allow organizations to deliver that increased and high-quality training their employees need without necessitating even larger increases in the training budget. In fact, compared to instructor-led training and even traditional e-learning, MOOCs can even confer cost savings. Here are five ways MOOCs can save your organization time and money.
Eliminating many travel, logistics, and resource-related expenses
Let’s get the obvious one out of the way first. MOOCs eliminate the need for companies to spend any money at all on transportation, accommodations, meals, entertainment, or other items associated with travel. For a company that has locations spread across a wide geographical area, this factor alone can translate into significantly savings. Other logistical expenses MOOCs eliminate include costs associated with booking event space for seminars, providing transportation and meals for employees who attend training off-sites, and paying administrative staff to make all of the arrangements.
Decreasing the marginal cost of training additional employees
Once a MOOC is designed, developed, and put online, the course can be delivered to 10 or 1,000 or 10,000 employees. As long as your learning management system can handle unlimited learners, there is no marginal cost associated with training additional employees. If the MOOC is completely self-paced and independent, it can be run as many times as necessary. If it is moderated, there will be costs associated with instructor time, but those costs will by far undercut what it would cost to have the same instructor deliver the same training multiple times in person.
Reducing training time
Though training time isn’t always adequately accounted for in cost estimates, this is an area where MOOCs can have a major impact in reducing the unstated costs associated with employees not being at their desks. Moving from instructor-led training to e-learning can reduce training time by up to 60%, and though hard data are not yet available, MOOCs can lead to even more time savings. Not only are MOOCs more efficient than instructor-led training, but they can also save significant training time by being more personalized. In a traditional course, all employees must work through all of the material at the same pace. MOOCs, on the other hand, allow employees to customize their learning experiences—skipping the content they already know and focusing more on the gaps in their knowledge and skills.
Just to illustrate how big this could potentially be, consider the example of McAfee, which used a MOOC model to revamp its new-hire orientation, a program that had previously involved 40 hours of pre-work, five days of on-site training, and post-work. Not only did the MOOC format allow McAfee to significantly cut the time required for its new-hire training, but its sales staff attribute $500,000 worth of sales per year to the skills they learned in the MOOC.
Reducing the need for re-training
The amount of information employees retain from traditional training sessions generally ranges from little to less. According to HR expert Ed Holton, retention rates for training range between 10 and 30%. That statistic is not only embarrassing, but it also means that organizations must spend additional money on retraining (thus more time employees spend away from their desks), not to mention the cost of employees forgetting key information. E-learning has been shown to increase information retention by up to 60% over instructor-led training. Again, MOOCs can improve on this number by providing a platform for just-in-time training and performance support. Your employees will never remember everything, but using MOOCs they can in essence take charge of their own retraining by the accessing learning resources and materials they need exactly when they need them.
Keeping organizations current
Here is another cost that is very difficult to measure, but nonetheless significant. How much does your organization lose by not being up-to-date in your industry? In a recent survey, 72% of companies said that e-learning helps them keep current and remain competitive. Using a MOOC platform along with the abundant technology-enabled learning tools available to create and distribute content, new information that comes out today can quite literally reach your entire organization tomorrow. MOOCs also allow employees to keep their skills up-to-date by providing ways for them to independently pursue their own professional development.
U.S. companies are spending somewhere in the range of $1200 on training per employee per year. By adopting MOOCs for their L&D programs, organizations can ensure that more of that amount is going toward actually providing training for employees rather than to things like travel, renting spaces, and so on. In addition, the increased efficiency of MOOCs means employees can spend less time learning and more time on revenue-generating activities.
Contact me for more information about how MOOCs can save your organization money while enhancing the quality of your training.
Copyright 2014 Bryant Nielson. All Rights Reserved.
Bryant Nielson – Managing Director of CapitalWave Inc.– Being a big believer in Technology Enabled Learning, Bryant seeks to create awareness, motivate adoption and engage organizations and people in the changing business of education. Bryant is a entrepreneur, trainer, and strategic training adviser for many organizations. Bryant’s business career has been based on his results-oriented style of empowering the individual.
Learn more about Bryant at LinkedIn: www.linkedin.com/in/bryantnielson