Canadian companies are falling behind on training and development spending, threatening to make an already apparent labour shortage problem worse, according to a recent study.

Despite a continued trend toward the knowledge-based economy, corporate spending on training, learning and development programs has remained stagnant for more than a decade.

The Conference Board of Canada report says the average amount spent per employee is $852 a year, or 1.8 per cent of their payroll. That hasn't changed since 1996 and when inflation is factored in, there has actually been a 17 per cent decrease in spending.

Canadian organizations also spend less than their American counterparts and several other industrialized countries on developing talent, according to the study.

The amount of training each employee received in 2006 was 25 hours, down 10 per cent from 2004. The trend is surprising to many trainers, considering the pace of change in many fields has never been faster.

"The half-life of the knowledge you get through a university degree has been decreasing dramatically over the years," says Murray Vines, a program director in the University of Calgary 's Faculty of Continuing Education.

"The body of knowledge is growing at such a fast pace that we need to keep learning," he says, adding many fields are outdated in at least some areas within five years or less.

In hot economic areas such as Alberta, where attraction and retention are among the top priorities of business leaders, corporate trainers are further puzzled as workers increasingly demand opportunities for professional development in a tight labour market.

"These new people in their 20s and even 30s coming into the labour market, they not only expect to have the opportunity to learn and grow on the job, but they demand it or they'll walk," Vines says.

At the same time, more professional bodies are moving to incorporate higher requirements for lifelong learning and development.

The Certified Human Resource Professional (CHRP) designation, for example, has built several standards into its certification process to ensure workers continue learning throughout their careers to maintain their designation.

"We're seeing more requirements that people have the specific certifications that are given by various professional bodies and more of those certifications are requiring that you demonstrate continuous learning," he says.

The general improvement of workers' skills, referring to the need for continuous learning to meet market demands, is a trademark of a knowledge-based economy. To remain competitive on the world stage, particularly with emerging superpowers such as India and China , Canadian corporations need to revisit their training and development strategies.

"A degree is just your starting point," says Colleen Moorehead, president of Nexient Learning Inc.

"There is significant tension around corporate productivity (and) that drives a requirement to have and use best practices because it's a global place now," she says.

"The second thing is the (labour) market is tighter, so you can't compete on (wages) alone. You have to develop talent in an in-role kind of way," Moorehead says.

Despite the workplace pressures facing most Canadian companies, 41 per cent of respondents in the Conference Board report stated they were satisfied that their training budgets meet their needs, while 31 per cent did not.

Those satisfied with their spending levels committed an average of $1,036 per employee each year on learning and development programs. The top percentile spent $1,766 annually, with the lowest spending just $120.

Only about half (56 per cent) of organizations consider themselves a "learning organization," down from 78 per cent in 2002, according to the study.

Part of the reason companies may be hesitant to spend more is that leaders are demanding to identify an indisputable return on investment for their dollars, something that is often difficult to measure in tangible ways.

With the exit of the baby boomers from the workforce over the next few years, the need to invest in more training is clear. "We've got to somehow try to fast-track these (younger) people to take on very senior responsibilities very early in their careers," says Vines.

Customized training and development programs are on the rise as more companies look to tailor the learning according to their unique needs in the marketplace, adds Vines.

Moorehead agrees attitudes may be shifting as more corporations deal with the aging senior leadership now in place.

"They (business leaders) have to see this as very strategic in their drive for overall business performance," says Moorehead.

derek.sankey@telus.net