Businesses support post-pandemic spending on executive training
Many companies are on the verge of increasing or maintaining their budgets for executive training to prepare senior executives for the post-pandemic era, an FT investigation has found. The survey also highlights a new focus on promoting diversity in the workforce following the Black Lives Matter protests.
In a survey this spring of 363 Directors of Apprenticeship (CLO) around the world, more than a quarter said they intended to increase spending on executive training – shorter programs and non-graduates – in 2021.
More than half of the CLOs, which commission training for organizations, said they would maintain 2020 levels, while 17% predicted cuts.
In another indicator of recovery in the industry, Unicon – an alliance of large executive training providers that partnered with the FT for the survey – said that a third of its members expected their earnings increase up to 10 percent. Another third did not foresee any further drop in income in 2021.
FT Executive Education 2021 directories
These trends are analyzed in FT’s latest annual executive education report, which includes directories of customized program providers and open enrollment courses for managers.
The data shows a new recognition of the need to equip leaders with new skills and provide training as a means of recruiting and retaining senior managers.
The biggest demand was for leadership training and change management, but – a sign of the influence of the Black Lives Matter movement – diversity and inclusion ranked third overall. The topic was cited by 55 percent of respondents and an even higher proportion of US employers.
Reflecting the disruption of work practices caused by the Covid-19 pandemic, many CLOs also want new information on resilience, well-being and collaboration remotely or online.
Survey responses offer hope for training organizations, highlighting new demand after a first wave of cost reductions that led to a drop in collective business school revenues by a third, to 1, $ 3 billion, over the 12 months to June 2020.
Campus closures to contain the pandemic have sparked a wave of class cancellations. Insead in France reported a 20% drop in revenue from executive training in its 2019-2020 annual report, although these courses still generated 32% of the school’s revenue.
However, schools have also been quick to adapt, investing heavily in online teaching techniques and developing new programs targeted at post-Covid recovery.
Most survey respondents said face-to-face learning was the best, but predicted that a mix of physical and online training would be the “new normal”. Four-fifths agreed that digital delivery has increased flexibility and access to learning, allowing companies to reach a larger group of leaders and employees.
Patrick de Greve, managing director of Vlerick Business School in Belgium, where executive education accounts for around 30% of revenue, said clients postponed classes in person rather than canceling, while others skipped to online versions.
“If we did not have asynchronous online [not studied simultaneously] independent courses, we would not have our clientele, ”he added.
An FT analysis of 91 leading business schools offering open-enrolled executive education programs showed that nearly a dozen – including MIT, Wharton and Stanford in the US, HEC and Insead in France, and IMD in Switzerland – have consistently reported higher annual income of $ 20 million each for these courses.
Four schools – Duke: Fuqua in the United States, Insead, IMD and the Indian Institute of Management, Bangalore – also reported annual revenues in excess of $ 20 million for personalized programs tailored to the needs of individual business clients, and eight schools reported having more than 100 corporate clients in the past year.
However, the survey found that many CLOs were exploring the use of alternative external providers other than business schools and increasingly looking for ways to more rigorously assess the value for money of training programs.