Executive education 2021: companies back post-pandemic spending
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Many companies are set to increase or maintain their budgets for executive training to prepare top managers for the post-pandemic era, an FT survey has found. The poll also highlights a fresh focus on fostering workforce diversity in the wake of the Black Lives Matter protests.
In a survey of 363 chief learning officers (CLOs) around the world, carried out this spring, more than a quarter said they intended to raise spending on executive education — shorter, non-degree programmes — in 2021.
More than half of the CLOs, who commission training for organisations, said they would maintain 2020 levels, while 17 per cent planned reductions.
In a further indication of recovery in the sector, Unicon — an alliance of leading executive education providers which partnered with the FT for the survey — said a third of its members expected their revenues to rise by up to 10 per cent. Another third anticipated no further drop in revenues during 2021.
The data show a fresh recognition of the need to equip leaders with new skills, and to offer training as a way to recruit and retain senior executives.
The greatest demand was for training on leadership and change management, but — in a sign of the influence of the Black Lives Matter movement — diversity and inclusion was ranked third overall. The theme was cited by 55 per cent of respondents and a still higher share of US employers.
In a reflection of the disruption to working practices caused by the Covid-19 pandemic, many CLOs also want fresh insights into resilience, wellbeing and remote or online collaboration.
The survey responses offer hope to training organisations, highlighting fresh demand after an initial wave of cost cutting dragged business schools’ collective revenues down by a third, to $1.3bn, in the 12 months to June 2020.
Campus lockdowns to contain the pandemic triggered a wave of course cancellations. Insead in France reported a 20 per cent drop in revenue from executive education in its 2019-20 annual report, although these courses still generated 32 per cent of the school’s income.
However, schools have also been quick to adapt, investing heavily in online teaching techniques and developing new programmes targeted at post-Covid recovery.
Most respondents to the survey said in-person learning was best, but predicted a blend of physical and online training would be the “new normal”. Four-fifths agreed that digital delivery had increased flexibility and access to learning, allowing companies to reach a broader group of leaders and employees.
Patrick de Greve, general director of Vlerick Business School in Belgium, where executive education accounts for about 30 per cent of revenues, said clients had postponed in-person courses rather than cancelled, while others had switched to online versions.
“If we did not have online asynchronous [not studied simultaneously] self-led classes, we would not have our client base,” he added.
An analysis by the FT of 91 leading business schools offering open-enrolment executive education programmes showed that nearly a dozen — including MIT, Wharton and Stanford in the US, HEC and Insead in France, and IMD in Switzerland — still reported annual revenues in excess of $20m each for these courses.
Four schools — Duke Corporate Education in the US, Insead, IMD and the Indian Institute of Management, Bangalore — also reported annual revenues above $20m for custom programmes, tailored to the needs of individual corporate clients, and eight schools said they had more than 100 corporate clients during the past year.
However, the survey revealed that many CLOs were exploring the use of alternative external providers other than business schools, and were increasingly seeking ways to evaluate more rigorously the value for money of training programmes.
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