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Why More Businesses Are Turning To Online Training

Tuesday, May 18, 2010   By Mike Reddy


As more people turn to the internet for news, entertainment and social interaction, online training, also known as e-learning, is being chosen by more SMEs to deliver the knowledge their employees need to achieve organizational goals. With many benefits to both a business and its employees, it’s easy to understand why e-learning continues to grow in popularity.

Benefits to the organisation

Lower cost. Research has shown that e-learning is 40-60% less expensive than classroom learning. When employees learn online there are no instructor fees, room costs, and travel and meal expenses.  For general knowledge, there are many “off-the-shelf” solutions that are very cost-effective, while customised e-learning programmes are often more economical than in-class training.

Consistency. For companies with many locations, employees may receive inconsistent training content delivered with variable effectiveness depending on their particular instructor’s knowledge, interests and capabilities. The standardisation of e-learning alleviates these issues.

Reduced learning time. Based on over thirty studies, the average learning time required with e-learning is 50% less than the time required for in-class learning covering the same material.

Improved retention. The interactive process of e-learning reinforces knowledge for greater retention.  The research varies, but it reveals increased retention rates of 25-50% for material delivered via e-learning as compared with classroom-based learning.

Quick roll-out of new training. In a fast changing environment, companies with many locations can find it difficult to train staff as new products or services are introduced. Online training can be created more quickly than having instructors present the material in person at diverse locations.

Lower administration costs. Records of training completed and certification can be automatically updated with learning management systems (LMS), resulting in less time and expense required for administration.  

Benefits to employees

Flexible availability. Instead of being restricted to a certain time and date for training, e-learners can choose when and where they complete their training. This may even be after hours at home when they are not distracted by work demands. They can also go back to the training material in the future to refresh their knowledge when they need to.

Self-paced learning. In a classroom environment, previous knowledge and learning abilities will vary. This means some employees might have trouble keeping up while others become bored. With e-learning, each employee can learn at their own pace.  Those with more background in a subject can move ahead more quickly by pre-testing to demonstrate their competency level and allowing them to skip unnecessary parts of the training.

Interactive learning. The interactive nature of e-learning makes it suitable for all learning styles.  Effectively designed online training can motivate employees to learn instead of having to push them.

Shortcomings of e-learning

Although e-learning provides numerous advantages, there are shortcomings to consider.

Initial investment. For a custom learning solution the set-up cost can be substantial. This initial investment has to be weighed against long term savings.

Subject matter not suitable for e-learning. Some subjects require group interaction in a classroom setting for effective learning. For example, training for public speaking and presentation skills requires practising in front of a group. It’s true that you can learn the concepts of effective public speaking online, but you need to interact with a group to practise and master the skills.

Less social interaction among staff. Group training can be a way for employees to interact and share knowledge on the area they are studying.  Although some e-learning solutions offer forums and other ways to interact online, they lack the person-to-person social interaction that helps build connections within organisations.

Making the decision

Before making the decision to move to e-learning, it’s important to consider the benefits, drawbacks, financial impact and the type of training needed by your staff. In some cases, an off-the-shelf solution might be all that you need to upgrade their skills. For knowledge specific to your company, a more costly customised learning solution may be required.  If your company does not have anyone responsible for educational planning, an e-learning specialist can assist you in comparing the options and making your decision.

Mike Reddy is a Chartered Accountant, business coach and advisor helping businesses in Sydney, Melbourne, Brisbane and Gold Coast to easily increase their profits and cash flow. He is currently President of the North Sydney Chamber of Commerce, a Regional Councillor for Sydney North East and a member of the Institute of Chartered Accountants Sydney leadership team. As well as advising businesses, Mike presents business development seminars and webinars and is regularly contacted by the media to comment on small business matters. You can connect with him on Facebook, Twitter and Google+.