Zensai recently sponsored ATD’s 2026 State of the Industry report, which found that organizations have reduced learning and development (L&D) spending despite increasing their time spent learning. While dedicated employee training time is generally great to see, asking L&D teams to do more with less can be risky.
That’s why we’re going through ATD’s findings for 2026, to understand what’s behind this seemingly contradictory trend, and how organizations can get the most out of employee learning hours without disrupting real work or overburdening their L&D teams.
What’s driving this shift in employee training priorities?
According to the State of the Industry report, the average number of formal learning hours per employee was 16.7 in 2025, which is a three-hour increase from 2024. At the same time, however, businesses reduced the direct learning expenditure per employee from $1,254 to $846.
As a result, L&D investment as a share of revenue fell from 2.9% to just 2%. That’s significant no matter how you look at it. So, what’s driving this shift and how does it mesh with an increase in formal employee training hours?
Genuine cost reduction
Businesses have reduced spending per hour of employee training time by increasingly adopting methods that are more cost-effective. Cost per learning hour fell from $165 in 2024 to $120 in 2025, which is a reduction of 27%.
83% of organizations use live, instructor-led, virtual classrooms, a significant increase from 58% the previous year. This reduces setup and travel costs, which accumulate quickly when you’re running programs across multiple locations. Businesses have also reduced the costs of repeating courses by allowing employees who missed live courses to catch up asynchronously. 77% use asynchronous e-learning while 66% take a blended approach, giving L&D teams more flexibility in how they deliver training without increasing spend.
Increased efficiency
Much of this efficiency comes from operational maturity. A modern learning management system (LMS) handles enrollments, recommendations, and certification tracking automatically, freeing L&D teams from manual administration.
For an L&D manager running a team of three, that means fewer hours on manual tasks and more time on programs that actually move performance. The average number of employees per TD team member was 510 in 2025.
But not every efficiency gain is cause for celebration. 25% of organizations decreased their TD headcount, pulling just ahead of the 24% that increased theirs. Headcount reductions like this are often a response to budgetary pressure.
Budgetary pressure
The budgetary pressures pushing organizations to change their approach to employee training are, in large part, the result of “volatile” economic forecasts according to ATD’s State of the Industry report. That’s the external driver. Only 28% of TD leaders expect their financial resources to increase, down from 48% in 2024. Meanwhile, 25% expect a decrease, up from 8% the previous year. The gap between optimism and reality is closing fast, and L&D leaders are navigating the consequences.
But there are also internal pressures as a result of this. Top challenges include pressure to prioritize with multiple demands (46%), scaling with few resources (33%), inadequate budget or resources (27%), and coping with the pace of change (27%).
Why focus on outcomes over activities?
Insisting on increasing learning hours puts the focus on activities rather than outcomes. Some focus on activities is good, like using on-the-job learning to supplement formal employee training. But without a focus on learning outcomes, you can’t gauge training effectiveness and respond accordingly.
Understanding this risk points you toward the solution. For example, the most-used success metrics were employees trained (82%) and hours delivered (69%). All these numbers tell you is the amount of learning activity.
By comparison, only 13% measure training ROI across all learning programs, but 54% don’t measure ROI at all. That’s low, considering only 41% of organizations rank connecting learning programs to business goals as a top three TD priority. An L&D leader walking into a budget conversation with completion rates alone doesn’t have the evidence to defend investment. One who can show how training changed customer retention does.
Let’s say your goal is to increase repeat customers by 50% this year. So, you assign your sales team training on conversations with customers.
You could then prove that training’s ROI by tracking the percentage of returning customers alongside employees who complete the course. For more detail, you could bring in customer satisfaction for each employee before and after they complete the course.
The pressure your L&D team faces and what to do about it
The combination of rising learning demand and tightening budgets is fundamentally reshaping the pressure on L&D teams. Employee training hours are increasing, but team sizes are not. Costs are falling, but expectations of impact are rising. At the same time, 66% of learning budgets are now allocated to internal services, shifting more responsibility onto already constrained teams.
L&D must scale delivery, maintain quality, demonstrate value, and manage increasingly complex internal workloads, often without the resources or measurement frameworks to fully meet those expectations. Leadership expects L&D teams to drive outcomes, but they’re still operationally set up to deliver activity.
This is an opportunity to rethink how you design, deliver, measure, and improve employee training. Leading organizations are already connecting learning more closely to performance, embedding development into the flow of work, linking it to real outcomes, and using that visibility to guide decisions. This approach reduces reliance on standalone programs and creates a clearer line between effort and impact.
Organizations that move beyond tracking participation and instead bring learning, performance, progress, and measurement together in one place will be better positioned to show value and sustain growth over time.
Why connect employee training with performance?
The way most organizations measure employee training doesn’t answer the question leaders are actually asking. Teams track training through activity metrics such as employees trained and learning hours delivered, while the business tracks performance through outcomes such as engagement, customer satisfaction, retention, and productivity. Without a direct connection between the two, organizations can’t show what training changes in practice.
When both training and performance data live in the same system, that visibility changes. L&D can track whether a course actually closed a skill gap, whether a team’s performance shifted after completing a program, and whether development activity aligns with the goals the business has set. That turns learning from a record of participation into a signal of progress.
This also changes how L&D prioritizes. Instead of building programs based on requests or assumptions, teams can direct development toward the gaps that performance data reveals. The result is fewer standalone programs, tighter alignment with business priorities, and a clearer case for continued investment.
Rethink how you measure and deliver employee training
The report makes one thing clear: organizations need a different system for learning. Measuring participation alone doesn’t provide enough insight, and increasing training volume at a lower cost doesn’t necessarily demonstrate impact. To meet rising expectations, organizations must rethink how learning connects to performance, how it is delivered at scale, how its impact is measured, and how investment is justified.
When an L&D team can show how training influenced retention, closed a skill gap, lifted productivity, or moved a customer satisfaction metric, the conversation shifts from defending cost to demonstrating value. That’s what this data is pointing toward. It’s also why Zensai sponsored this research, and why we built a platform for learning, performance, and engagement that lives inside Microsoft 365.
For the complete picture of how businesses are adapting to changing L&D needs, read ATD’s full State of the Industry report for 2026.