Is the Recession Bad for Effective Learning Solutions?

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When eLearning came into being through its early predecessors in the form of CBT and then WBT one of the primary reasons and its drivers was increasing acceptance of its potential to save costs due to the inherent advantages in centralizing (more with WBT) content, the reduction in logistics costs, persistent storage and to an extent uniformity in content delivery. It soon caught on as a medium which is now used as a part of learning strategy (in context of workplace learning) and not only helped companies save costs on a recurring basis but it evolved as a ‘learning’ delivery medium.

As an industry, eLearning has witnessed significant growth over the past years. Then the recession hit and not only did it disrupt the continuity of growth and momentum in the industry, but as I see it, even when fading away it poses another threat to eLearning industry. I will explain how.

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If the only thing the last 15 months or more of the cruel downturn has taught more companies than anything else, it is the need to be cautious on cash (and costs) front. Tremendous pressures were put on companies to save on costs (and continue even now, while a little milder) and more so to generate more value at the same cost. These pressures led organizations to react in varied ways – downsizing, rightsizing, blanket budget cuts, even training cost cutting, across the board salary revisions, etc. On one hand while the pressure to reduce costs kept on increasing and still is a reality, on the other there was also a burning need to upskill and reskill employees to generate more value and productivity.

This mix of cost pressure and need to still keep an eye on training to survive and grow beyond the recession phase, in my belief, started the second wave of adoption of eLearning. Over the past few years, as the industry was maturing, the focus was slowly, but firmly, moving towards producing learning solutions that impact performance and dollar numbers, this second wave could have a pull-back effect, potentially.

In the last few months (6 to 9 months) we (as a solutions provider) have seen an increase in inquiries focused on adopting eLearning primarily to compensate for the budget cuts and to reduce overall training costs. This is where my concern stems from. There are cases where the customers are looking for something quick, dirty and of course inexpensive. That these cases are increasing in number is a matter of concern, primarily for two reasons:

  1. If such demand keeps increasing (and I believe as effects of the recession continue to get milder it will) there could be a surge in solutions which are good from a cost perspective but not from a ‘learning’ perspective. This could undermine or distract from the progress and advancements the industry is making in coming out with innovation and solutions to enhance learning in self-paced environments.
  2. As more such solutions sell it would take another level of effort to evangelize and educate customers on the true value and potential of eLearning. This seems like going back a few good years and that isn’t good.

While I am confident that the recession is definitely proving and will continue to prove a booster in terms of revenue growth for learning solutions providers, I am also worried that it has the potential to erode the true value to some extent.

The bright side is that more companies are now able to produce excellent quality eLearning at costs lower than before and will still be able to offer good value at low cost striking the right balance. However a challenge still remains on the other front. How big this challenge will be only time can tell. As a company that provides high quality solutions we are pushing Innovation and development to ensure that we don’t fall into the trap (for the lack of a better word).

I’d love to hear more about this and how others feel about this situation. I’d really like to hear and conclude (hopefully) that most of my concerns are unfounded.

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