The market has shown consistent growth in eLearning over the last 5 years. Forecasts also suggest reasonably good growth for the upcoming years. But how will the recent economic downturn impact the growth of eLearning?

Training and Development (T&L) budgets in corporations are very sensitive to profitability. In times of economic downturn, T&L budgets are slashed as a result of lower profitability. This adverse effect will have a significant impact on the bottom line of privately-held educational institutions whose revenue mainly comes from corporations.

No training firm will be immune to the latest economic downturn, but relatively speaking, organizations that offer eLearning services to their clients should perform much better than their competitors that strictly offer conventional, face-to-face training.

As T&L budgets get slashed, the need for training and development remains. Consequently, corporations will look for cost-effective alternatives. eLearning is likely to benefit from recessionary conditions as it is a proven, cost-friendly alternative to a traditional classroom.

The share of eLearning hours will likely increase from 25% to 50% or more due to two factors:

1.       Lowered base of overall number of training hours, as expected during a recession

2.       Increased share of eLearning.

Those who have resisted eLearning in the past have done so claiming that eLearning is not nearly as effective as instructor-led classrooms. This can usually be attributed to a manager’s past experience with text-based eLearning courses. While text-based modules offered over the Internet theoretically qualify as electronic learning, they share more similarities with conventional textbooks or PDF files than multimedia Web-based training.

High-quality, interactive eLearning courses that are based on sound design principles such as the dual coding theory close the effectiveness gap, thereby removing the barriers of acceptance. As T&L budgets get slashed and training managers are forced to re-evaluate this cost-effective alternative, I believe that eLearning will become part of every corporation’s training strategy, even post-recession.

The eLearning industry in general has a great future irrespective of the recession, mainly because conventional, face-to-face training will shrink at the expense of eLearning. Its proven cost-effective benefit, ever-increasing effectiveness and ability to train people “anywhere, anytime” – something instructor-led training will never be able to accomplish – will protect for-profit educational institutions that offer eLearning services to their clients during the expected economic downturn.