Australian firms spend between 12 and 13 per cent of their payroll on training their employees, according to research conducted by Saba, an internet-based learning and competency management software vendor.
The direct costs of providing training, which includes the cost of instructor fee, hardware and software, however, amounts to just 2.5 per cent of payroll, said Dr Laurie Bassi, Saba's director of research.
The remaining costs are compensation costs for employees' time while they are in training -- or learning as Saba prefers to call it -- and lost productivity. Despite the size of the investments in learning, Bassi felt that organisations are not running training in the same business-like manner that they do other strategic investments.
Bassi also said that as organisations shift from instructor-led training to electronically delivered training, costs can be reduced by as much as 50 to 70 per cent, under some circumstances. She emphasised that these cost reductions depend on the training content and technology used.
Bassi was in Australia for the launch of Saba's Asia-Pacific operations. The company now has offices in Melbourne and Sydney.
Saba's Learning Enterprise software enables organisations to manage the learning and competency assessment of employees within an enterprise, as well as partners within an extended enterprise. It does not provide learning content for customers, these are developed in-house by customers or sourced from external content providers.
"What is being offered is an infrastructure that will help the firms optimise the value (of learning). In terms of returns on investments, it does this both by bringing down costs where there are inefficiencies, and by equipping staff to deal with customers, which drives customer retention, which obviously drives profitability," said Bassi.
Currently Saba's implementation partner in Australia is PricewaterhouseCoopers. It is also in the final stages of discussion with two other "Big Five" consulting firms, according to Kerry Hogan, Saba's Australian country manager.
"Saba's implementation partners work with organisations to both do the systems integration-type work, and the consulting that surrounds developing competency sets around organisations, including human resource and change management components that would accompany this type of application," said Hogan.
Saba's customers include Cisco, Ford, Sun Netscape Alliance, Proctor and Gamble and General Electric. It has more than four million users or learners and partners with more than 160 content providers globally.