Classrooms Still Play Critical Role PRINCIPAL FINANCIAL'S ONLINE TRAINING BOOM When Dick Hannasch joined Principal Financial Group in 1987, the company had five computer-based training courses. Fast forward to the present: that number has grown to 300. "With nearly 17,000 employees worldwide, we don't have enough classroom space for all the new training that's needed," says Hannasch, senior training consultant for the Des Moines, Iowa-based financial services company.

The delivery of computer-based training at Principal Financial began on a Phoenix mainframe and progressed to a local area network and CD-ROMs. Today, Hannasch is busy designing online programs that are delivered via the company's intranet or Internet site.

"Business units that haven't used computer-based training before are looking at online training to drive down costs," Hannasch notes, "and they want to focus their time and energy on business issues, not on classroom instruction." He cites the example of a compliance course for agents available at a secure area of Principal Financial's Internet site. The online course is cost-effective, and an automated system makes it easy for managers to monitor test results.

A helpful rule of thumb from Hannasch: A minimum of 150 people over the span of a year need to take an online course in order for you to break even on development costs.

Principal Financial's push for online training doesn't mean that face-to-face training is gone for good. "Not only can't we get the cost benefit out of converting to computer-based training for small groups, but there are times when we really need instructor/student interaction," says Hannasch.

Here are some scenarios where Principal Financial finds classroom training to be most effective:

* The training requires role-playing or needs to answer varied, complex questions.

* High-performance leadership courses bring in top executives to talk to the group.

* People from different areas of the company are brought together to interact and work as strategic decision-making teams.

Only face-to-face training, says Hannasch, can help form bonds between people.

Where TrainingDollars Go According to Training magazine, U.S. companies with 100 or more employees spent $62.5 billion on formal training in 1999. Among the line items:

* Seminars & conferences: $4.4 billion (7 percent)

* Off-the-shelf materials: $2.3 billion (4 percent)

* Custom materials: $2.1 billion (3 percent)

* Outside services: $2.2 billion (4 percent)

* Training staff salaries: $43 billion (69 percent)