Spending plans for 2019 indicate that CLOs remain optimistic as they enter budget season.
September 6, 2018
When trying to get to the bottom of something, it’s always a good idea to follow the money. Talk is cheap but cash speaks volumes. And if learning investment plans are any indicator, learning executives are feeling pretty good about the future.
Investment plans for 2019 show learning executives are confident entering budget planning season. According to a survey of the Chief Learning Officer Business Intelligence Board, a solid majority (65 percent) say their outlook for next year is more optimistic than last year and a quarter (25.5 percent) report feeling about the same as they did last year (Figure 1).
The Chief Learning Officer Business Intelligence Board is a group of 1,500 professionals in the learning and development industry who have agreed to be surveyed by the Human Capital Media Research and Advisory Group, the research and advisory arm of Chief Learning Officer magazine. This survey was conducted in May and June 2018.
This year’s results fit a multiyear pattern of optimism. Since 2015, a majority of learning leaders have reported positive feelings about their spending plans. After a slight dip in 2017, when 59 percent reported a more positive outlook, this year’s level of optimism has risen once again. In 2016, 62 percent of CLOs were more optimistic than the previous year and 9 percent less optimistic. In 2015, 65 percent were more optimistic and only 4 percent were less optimistic.
Much of this rosy outlook comes from the bigger economic picture. The U.S. is experiencing one of the longest periods of economic growth in history. Starting in June 2009, the economy has grown for 108 straight months (as of July 2018). The looming threat of a global trade war seems to have been offset by the continued bull market and corporate tax cuts that have goosed the bottom line.
That optimism translates to an anticipated increase in cash for learning departments in 2019 (Figure 2). Only 12 percent of survey respondents expect a decrease in spending and about one-third (28 percent) say their spending will stay about the same. A majority (57 percent) expect they will increase their spending next year, a significant uptick from the prior year when 49 percent reported an increase.
Where will that cash go? The priority is L&D strategy, with a majority of learning executives (60 percent) saying it is either an essential or high priority (Figure 3). This result matches last year’s report when 55 percent reported it as their top priority. The accelerated pace of change and proliferation of sophisticated learning tools has made the need for a targeted, well-orchestrated learning strategy aligned with business priorities an essential part of a high-functioning learning organization.
Other top priorities include content delivery and learning technology but both remained essentially unchanged in importance year over year. Learning technology was listed as either high or essential priority by 43 percent of respondents this year compared with 44 percent last year. Content delivery was listed as a top priority by 49 percent this year and 48 percent last year.
Perhaps most interesting, investment in L&D personnel moved up the priority list. Compared with last year when just under one quarter (23 percent) reported staffing as a top priority, nearly a third of learning organizations (30 percent) plan to spend on people in 2019 to staff the increasingly sophisticated roles required to run a learning organization.
That finding is backed up by changes in expected investment in 2019. Thirty-six percent of learning organizations plan to make significant changes to their investment in learning personnel (Figure 4) compared with 29 percent in 2017. Learning strategy, technology and content development all also remained top areas for increased investment in 2019.
Barring a significant economic event, CLOs are feeling pretty good about the budget picture.