The Quiet Insourcing of Employee Development

The 2026 SHRM L&D benchmarking study, drawn from more than 4600 organisations (surveyed between Nov 2025 and Jan 2026), highlights three critical findings. But all together they point to the same headline – development is now  moving closer to managers.

The first finding reveals a disconnect. Training hours held steady at a median of eight per FTE, unchanged from 2025, even as spending per employee fell 28%. Organizations didn't train less; they spent far less doing it.

Second, is an explanation. External training dropped from 25% to 15% of L&D budgets, with small and midsize organisations cutting the deepest. Development did not disappear;  more of it is being brought in-house, increasing the importance of managers, peers and internal programs.

Third, presents an opportunity. When asked which skills matter most over the next 5 years, executives put critical thinking, judgment, and decision-making at the very top – the number one priority across every industry group. And those are precisely the capabilities that can’t be taken over by ashort external course. Judgment is built through exposure, high stakes, and feedback on real decisions; exactly the kind of ‘in-the-flow-of-work' development that happens when learning is embedded in the work itself. 

For leaders, this alignment is the real headline. The market has quietly pushed development closer to the work, at the very moment when the most-valued skill is one that only real work can cultivate. The organisations that pull ahead will not be the ones that spend the most; they’ll be the ones that treat this shift as a deliberate choice rather than a cost cut.

These three moves can turn this shift into an advantage. 

• Investing in managers as developers – coaching, feedback, and stretch assignments are now core to the role, not a nice-to-have. 

• Build light internal structure, so learning stays consistent when it rests on people rather than vendors.  

• And protect time for development, so the task with no deadline doesn't lose to the ones that have them.

Do that, and the numbers start to tell an encouraging story: leaner budgets, learning that sits closer to the work, and a sharper focus on the human skills that will define the next five years. The vendor may have a smaller role to play, but for leaders ready to seize the moment, this is the chance to build a development engine that's more capable, more connected, and closer to the work.