Do you know what considerations you need to make when setting your L&D budget? Or even where to start when building a business case to senior stakeholders when requiring the funds for training?
Securing budgets for training has always been a challenge. Organisations have many competing needs for funds, learning is just one in a long list of investment needs. So, what can L&D do to ensure learning is not the poor relation when it comes to capital spend?
Like many things, planning and preparation is absolutely fundamental. By spending time establishing learning needs and how learning activity will impact on individual, team, departmental, and organisational performance.
We’d like to share a few observations and thoughts about some of the actions you can consider to help you secure and get the most of your L&D budget.
The value of learning shouldn’t be underestimated, and therefore the investment to properly provide this learning is paramount. Unfortunately though, too many times, when budgets get slashed, the L&D budget is one of the first pots impacted. To help ratify this, when it comes to obtaining a budget for your L&D programmes, so much more needs to be done in the ‘preparation’ stage, to prove its worth, that may just help protect it in the future. This article looks at what you need to consider when building a case for your L&D budget.
In a recent survey with over 2,000 of our learners we asked what their main motivation to learn at work was, and a staggering 82.7% said to improve their skills. This has not been more important than right now when we are faced with huge industry wide skills gaps.
In fact, in an interview we conducted with Nick Bate, Co-Founder & Director of Blue Eskimo, leading specialist recruitment company which focuses on servicing the UK learning sector, Nick was keen to point out that “Many job roles and functions of today won’t even exist in ten years’ time, so the pressure and demand on L&D teams to re-skill and up-skill is probably higher than it has ever been. Having this ability to plan for the future will enable these organisations to remain competitive.”
Seeing stats like this only reinforces the need for L&D budgets to properly support training programmes.
Aside of this, L&D programmes not only create benefits for employees, which we’ll come back to, but they can also create a number of positives that the business will benefit from, such as:
We understand that setting a training budget can be difficult - where do you start? What do you want to achieve through this training programme and how do you evidence the ROI?
We see there being two important stages that must be done ahead of prepping for your L&D budget:
Let’s start with engaging stakeholders…
Up until recently staff learning and development was often seen as a ‘nice to have’ but with expectations from employees shifting from ‘having’ to learn, to 'wanting' to learn, there is the greater need to utilise your L&D budgets in the best way possible.
Sometimes getting the commitment from senior stakeholders to invest in learning and development can be a challenge. Often a good place to start is with the stakeholders you are looking to invest in. A good point made by David James, Chief Learning Officer at Looop, when we spoke to him about investing in your learners, was that L&D teams need to simply speak to stakeholders differently to improve their ‘service’. This is so that when a stakeholder requests some training, L&D teams can look to ask the right questions such as:
This shows that as a team they are interested in making a difference.
Once L&D teams have this insight, they can produce a more focused training solution to the problem that it is less risky and will ensure that the outcome addresses the initial difficulties these stakeholders were facing. This means that L&D teams start to solve real problems, one at a time.
This then allows L&D teams to create a business case for the budget required to support this training need and have meaningful conversations with senior stakeholders to secure this budget.
Often to gain any financial investment you have to prove why you need the money and what will change as a result of it. Proving the ROI of any learning and development programme can be tricky. How do you quantify what people will learn from it, and more importantly how will they change as a result, and how will the business benefit afterwards?
The most important factor here is that you set out the outcomes of the programme up front and define what success looks like. If you don’t do this then you have nothing to base the success, or dare we say it, the failure against.
This can be helped by going through the questions laid out above, with those who have the training need. If you can evidence where the gaps are, and the impact it is having on productivity and an employee’s ability to get the job done, it is then easier to go back and reference this and prove how the training has resolved these problems.
And whilst L&D programmes should very much help alleviate issues being faced by your employees in their day to day, they can also help bring round other benefits for them, to include:
So, based on some of what we have said in this article, what things do you need to consider in order to get the budget required to support your employees training needs as well as the needs of the business?