Training cash lost in admin black hole

2007

Soaring administration costs severely eat into the training budgets of large numbers of American companies, with four out of 10 losing between a fifth to a half of their total training budget to paper pushing.

A survey by training companies Expertus and TrainingOutsourcing.com found that training administrative expenses were high in most organisations.

Nearly a tenth of companies astonishingly spent more than half of their training budgets on administration and operations, with a tenth devoting between a third to a half.

Three out of 10 managed to reduce admin costs to between a fifth to around a third of their training budget.

Nevertheless, just 15 per cent thought their administrative-related spending was too high and nearly two thirds thought it was "about right".

Ominously, some six out of 10 businesses predicted spending on administration and operations would increase over the next two years, with just 5 per cent saying it was decrease.

Yet an overwhelming majority also thought they cut their costs if they upgraded their technology, took on extra staff or simply increased staff training.

The most common administrative and operational tasks within the training budget were programme scheduling and evaluation, registering applicants and student and programme reporting.

"Training administration consumes way too many dollars in most companies – and despite the spending, there are still high levels of dissatisfaction in the services provided," said Mohana Radhakrishnan, vice president of client services for Expertus.

"The even bigger problem is that every dollar spent on administration is a dollar less spent on actual training.

"Employee development has a positive bottom-line impact, while administrative expenses have no incremental value," she added. "We believe training administration and operations are areas where most companies – no matter their size – can gain significant efficiencies.

"We've seen companies reduce administrative expenses by as much as 55 to 60 per cent through the effective use of technology, personnel resources, and shared services," she added.