IT Training Budgets Have Yet to Recover

November, 2013

At the start of the recession, IT organizations slashed training budgets as capital spending stalled, hiring slowed, and turnover rates sank to their lowest in a decade. Today, while we seeing improvement in IT spending and hiring, training budgets have still not reached the levels seen prior to the recession.

Figure 1 from our study, Benchmarks for IT Training Budgets, shows the median spending on IT training each year on a per-person basis for the composite sample of about 200 North American IT organizations. There was a notable drop in 2009, when training budgets fell from a median $2,500 to $1,422 per IT staff member. This decrease is symptomatic of the cutbacks companies made in areas deemed not critical to current operations. While IT operational budgets began rising again in 2011, however, training budgets remained depressed.

Training Fig 11 - IT Training Budgets Have Yet to Recover

At some point, best-in-class IT organizations will find it necessary to fully restore such funding if they are to adopt new technologies, such as mobility applications, public and hybrid cloud deployment, and data analytics. There simply are not enough candidates available in the marketplace with these skills, making it necessary to train existing IT personnel.

Training fulfills many functions in modern corporations and provides returns to both the company and to the employees. The ever-changing nature of IT equipment and applications requires that all involved commit to a lifelong process of professional development. Employees view their company’s willingness to keep their skills up to date as a job benefit, and the best organizations with the lowest turnover rates are leaders in providing employee training.

Heading into 2014, IT organizations are beginning to hire, expand work hours, and make increased use of contract labor, but they are not yet investing in training. This may be because turnover rates remain low, and organizations are not yet investing in new or emerging technologies that would require extensive training. But IT leaders should not take these reduced levels of training as the norm.

This full study provides IT organizations with benchmarks for setting optimal training budgets for their organizations. We provide benchmarks for spending on IT training per IT staff member and as a percentage of the IT budget. We also assess variation in training budgets by organization size and sector.

This Research Byte is a brief overview of our report on this subject, Benchmarks for IT Training Budgets. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).