Is corporate America choosing research and development over employee empowerment?

The latest Training Industry Report found that total training expenditure across U.S businesses has fallen consistently since 2017, down -11.3% in total and -5.3% annually. This spend covers all training-related expenditures for the year, including training budgets, technology spending, and staff salaries.

At the same time, there has also been a -31.8% annual decline in the money spent on external products and services to aid in employee training and development. That’s a drop in company spend on vendors and consultants, external training products, services, technologies, off-the-shelf and custom content, and consulting.

Meanwhile, the latest figures show that the sum spent on business research and development within U.S companies has increased by 11.5% on an annual basis, now at $378bn compared to $87,6bn spent on employee training expenditure during the same year.

R&D brings a clear and obvious benefit to companies due to the tax incentives and credits received on qualifying research expenses such as wages paid to the employees conducting this research, as well as other areas such as necessary supplies.

It also provides a competitive advantage against other companies and can help reduce costs, as well as improving operational processes and resource efficiency.

But is an R&D obsession amongst U.S businesses coming at the expense of company employees, or has a more streamlined, tech-enabled approach help reduce costs?

Founder of Ezra, Nick Goldberg, commented:

“We’ve certainly seen a changing trend when it comes to employee empowerment via coaching as many companies have tightened their belts in terms of training spend over the last few years.

It would certainly seem as though a larger focus on R&D could be a contributing factor to this decline in expenditure across U.S businesses. Of course, it’s arguably money well spent as an endeavour to improve overall business performance but this does require a human element to uphold and maintain.

That said, R&D has benefitted all areas of business including the ability to empower employees at a far lower cost via various forms of training, which can now be delivered in an online format more effectively and more frequently than before.

We now conduct more of our professional and personal lives in an online world and as a result, we’ve seen the ways that businesses are coaching their staff naturally move towards this format.

Not only does this resonate better with employees who can better facilitate this coaching within their busy day to day lives, but it also allows for a considerable cost saving for companies utilising this modern approach.

While the traditional, physical formats of coaching via workshops and training days still hold a high value in many instances, their prominence has started to decline in the modern business world as a result of these emerging alternatives.

Ar Ezra, we’ve started to see more and more companies of all shapes and sizes opt for digital platforms such as our app and video calls to implement one on one, goal-based coaching. Not only is the cost of facilitating this training lower, but the engagement of employees is far higher and so too is the accountability of their results via this coaching.

While this sometimes comes as part of a mix of new and traditional methods, it has certainly started to take precedence over the more traditional formats of presentation based training in large groups.”