New research from PeopleSoft Inc. may cause companies to think twice before slashing those training budgets.

The company surveyed 13,000 people who took training courses in PeopleSoft applications and found that individual worker productivity increased by an average of 20% in that group, the company said. Furthermore, PeopleSoft found that with proper training, the time it takes to master a new application was reduced by 24%.

Bill Henry, vice president of strategy and marketing for PeopleSoft Global Services, said that the students were surveyed by a third-party firm, Knowledge Advisors. Students were surveyed right after they completed training, and again six weeks later.

Industry analysts and users interviewed said that the fact that productivity and learning curves increase with training is a given. But they said this particular survey is interesting because it involved such a large number of students and because it quantified the benefits of training, something that historically has been a difficult task.

Larry Britton is an IT contractor currently working in a mainframe environment at the Omaha, Neb. office of Aquila Inc., a utility company. In more than 20 years of working in data centers, Britton said, he's seen first-hand that training programs are usually the first thing to go when companies tighten their budgets.

"Training isn't so much the problem as the travel and the expenses associated with it," Britton said. "And if you

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have training in-house, you have to pay someone to come in, and it's always exorbitant."

Britton said that, in his experience, company executives cut training budgets because it's an easy way to save money. But, he added, cutting those budgets doesn't make for a good investment in the future.

"Quite frankly, [executives] don't have the longevity that people in the trenches have," Britton said. "In seven years at one company, I had six changes in management. They're not sticking around to see the consequences of their actions."

Mike Brennan, program manager for learning services research at Framingham, Mass.-based International Data Corp., said that, while this study focused on PeopleSoft users, it has implications for the IT community at large.

"It shows that training has to be thought of as something that is critical to the business," Brennan said. "And, from the supply side, either internal trainers or companies like PeopleSoft that are offering training as a for-profit business need to refine their offering in [a] way that is suitable to the customer's business objectives.

"I think more and more organizations are going to scrutinize their training investments this way. Over the long term, this is going to make for better-targeted training offerings."

This was first published in March 2004

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