Corporate Workforce Pressures

WR Hambrecht identifies several driving factors that, from the corporate standpoint, are at the forefront of the e-Learning movement:

Technological changes increase complexity and velocity of work environment

Technology has changed the way we live, work, think, and learn. Today’s workforce has to process more information in a shorter amount of time. New products and services are emerging with accelerating speed. As production cycles and life spans of products continue to shorten, information and training quickly become obsolete. Training managers feel the urgency to deliver knowledge and skills more rapidly and efficiently whenever and wherever needed. In the age of just-in-time production, just-in-time training becomes a critical element to organizational success.

Lack of skilled labor drives need for learning

With unemployment rates at historic lows and a widening skills gap among the workforce, corporations compete fiercely for skilled workers. According to PriceWaterhouseCoopers, 70% of Fortune 1000 companies cite lack of trained employees as their number-one barrier to sustaining growth. Business managers realize that corporations that offer ongoing education and training enjoy a higher rate of employee retention and the benefits of a better-skilled workforce. As a result of the rising importance of training, an increasing number of corporations have hired Chief Knowledge Officers (CKOs) or Chief Learning Officers (CLOs) to plan and coordinate training programs.

Fierce competition in most industries leads to increasing cost pressures

With traditional training methods, companies generally spend more money on transporting and housing trainees than on actual training programs. Approximately two-thirds of training costs are allotted to travel expenses, which represents a major drain on bottom-line profitability. In today’s competitive environment, organizations can no longer afford to inflate training budgets with extensive travel and lodging. If opportunity cost is taken into account, the actual costs of training are even higher. Time spent away from the job traveling or sitting in a classroom reduces per-employee productivity and revenue tremendously.

Knowledge workers require greater flexibility in the workplace

Globalization, competition, and labor shortages cause employees to work longer, harder, and travel more than previous generations did. At the same time, these workers require more independence and responsibility in their jobs and dislike close supervision. Today’s knowledge workers have a non-traditional orientation to time and space, believing that as long as the job gets done on time, it is not important where or when it gets done. By the same token, they want the opportunity to allocate time for learning as needed. Modern training methods need to reflect these changes in lifestyle.

The biggest issues have to do with hiring qualified employees and improving and maintaining knowledge workers’ skills. According to SunTrust and IDC, these human resource issues are on every CEO’s or employer’s mind:

The IT workforce shortage is a key factor in the increased need for corporate training. The current shortage is due to the rapid rate at which computer-based technologies for commerce and business applications has grown, and is also due to the insufficient development of workers with technical understanding. In the United States alone, there is a current shortage of 722,000 IT workers. IDC forecasts this number is expected to reach 847,000 by 2000. As a result, an increasing amount of corporate training is associated with IT skills. In 1999, TRAINING magazine stated that 33% of employer-sponsored training pertained to IT skills. Further, IT training is expanding, having increased from 25% in 1993.

In the U.S., the issue of skills development and continuous learning for IT workers is always the first or second most important concern of employers and employees alike (IDC). Because of the rapid rate of new technology adoption and the economic growth over the last decade, staying competent has become one of the most important issues of the IT workforce.

USbancorp – Piper Jaffray addresses the skills gap with a comparison of skills that are needed and the training that is currently available:

Merrill Lynch also identifies the corporate needs for a more highly skilled workforce and the trend in Internet-based training as the outcome.

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