Stop the Slash! How to Save Your Training Budget from Cuts

by Julie Winkle Giulioni | Posted | Learning

Stop the Slash! How to Save Your Training Budget from Cuts

Whenever the calendar flips over to a fresh, new twelve months, many senior leaders, charged with managing the bottom line, find themselves at cross-purposes with learning and development departments. They look at the horizon and view conditions such as reduced sales, increased competition, downward pricing pressures and high turnover as reasons to cut expenses. And we all know a frequent first stop on the budget-slashing tour: training.

Those who’ve been in the learning and development field for any amount of time are likely familiar with this annual exercise. You gird yourself and find ways to do even more with even less. And yet, you know that these conditions that prompt your organization to believe that it can’t afford training are actually the very evidence that you need more—not less—focus and resources on the development of people.

Not surprisingly, numerous studies point to the challenges associated with adequate funding for training. Recent research conducted by Xyleme points to “lack of resources and lack of budget being the two largest challenges faced today. Learning and development knows where they need to go, but lack of time and money is creating a bottleneck to progress.”

So, before the conversation begins and your training expenses are trimmed yet again, maybe the following arguments will justify preserving (or even perhaps growing) your budget in the coming year.

Argument #1: Training is already meaner and leaner than ever before

Over the years, many learning and development departments have found effective and creative strategies to economize—to deliver greater services and results in increasingly cost-effective ways. They have:

  • Dramatically increased the use of technology to scale their efforts globally at a lower per-participant cost.
  • Reduced the expenses associated with travel by offering a range of alternate delivery options—from eLearning to webinars to MOOCs.
  • Leveraged internal subject-matter experts to offer insights, instruction and coaching rather than paying external consulting fees for similar services.
  • Offered a range of self-service, pull-based learning and development tools that require little staff effort once developed.
  • Produced fewer print-based materials, supporting sustainability efforts and reducing program-related costs.

While fewer resources can inspire creativity to a point, once inefficiencies and opportunities have been fully exploited, further cuts compromise the core mission. And they certainly don’t allow for the innovation that will be required to anticipate and address the state-of-the-art skills required to support evolving organizational needs.

Argument #2: Training contributes to the bottom line

The learning and development function has traditionally been viewed as an expense line or cost center. However, organizations are increasingly beginning to recognize the potential that training has to actually drive business results and contribute to the bottom line. For instance, training contributes to engagement and highly-engaged employees who are 38 percent more likely to have above-average productivity according to the Workplace Research Foundation. And, if you conduct a level-4 analysis of your training efforts, you have customized data to share with executives to justify learning as a business-building and profit-generating function (rather than a drain on the organization).

Argument #3: Training builds talent brand

By all indications, the war for talent will wage on for some time. Competing for fewer top resources means finding ways to distinguish your organization in an increasingly competitive environment. Training can be the differentiator. Establishing a positive reputation or brand around a commitment to employees’ professional development and career advancement can enhance your organization’s ability to recruit the best and brightest resources available in the talent marketplace.

‘Everybody else’ is investing in training

While using the “everybody else is doing it” argument as a kid might not have gotten you very far, maybe this is the year to dust it off!  It is worth noting that “nearly half (49 percent) of CLOs expect their training budget to increase over the next 12 to 18 months,” according to CLO Magazine’s recent 2018 predictions. Failing to adequately fund learning and development can put your organization and its people at a distinct disadvantage in the coming year and beyond.

Training is not merely an expense, but rather, an investment—an investment in skills, knowledge, engagement, performance, retention, productivity and in the organization’s future.  As budgets are built and scrutinized, learning and development professionals must be prepared to help make this future a reality—by defending the investment in learning and development and advocating for the resource levels required to support evolving organizational needs.

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