Allocated budgets can seem like a luxury in the workplace. Take the annual Christmas party, for example; an overly keen team member may try and extend it as much as possible. They will bargain with managers, cut costs wherever possible and even volunteer to pop to the local Aldi and pick up a frozen seafood platter and some 70s inspired Voulevants instead of opting for catering.
Other budgets, however, need to be taken a little more seriously. As we welcome our focus back from the last two years of pandemic blues, companies are finding increasing pressure from their workforce to invest in training, not just to better the individual but also to better the company’s culture. The results speak for themselves. Organisations benefit from offering learning and development incentives to their workforce.
As we enter into a new development phase, companies are being encouraged to find a budget for Learning and development, especially now that significant competitors are setting yearly KPIs and benchmarks based on company improvement and growth.
What is the difference between development & learning and training?
There is a fundamental difference between development training and Learning. According to eFront Learning, training courses teach “general skills or knowledge that we’re tasked with transferring to our job when the opportunity arises. Learning has a personal touch. It typically brings people’s existing knowledge and skills into view so that they can learn relevant things that make them better at their role. Typically, this requires learning in the flow of work, meaning that it presents less forgetting curve risk than our training budget scenario.”
The challenge associated with training is that the information absorbed within the moment gets forgotten about due to it not being implemented and being too generic. “If most of the information is lost, it’s pretty hard to present a good return on your investment and training budget.”
Let’s start with facts: How many companies offer an L&D budget?
After conducting a poll on Twitter, we determined that out of 40 votes, 63% of participants said that their company did offer a learning and development budget, and 33% did not. 5% were unsure, indicating that the budget had not been advertised or made accessible, or it didn’t exist. These percentages show that we are on the right track in terms of allocated budget, but more needs to be done.
According to Culture Amp, “workplace learning and development programs empower people to gain new skills and grow professionally. Employees are more likely to be engaged at work when companies offer learning and development opportunities. A focus on learning and development can also increase retention.” This is very apparent when we look at #ambitiouscompanies such as Airbnb and Esty. Recently, Airbnb launched a Fireside Chats incentive, an internal event that brings industry leaders together and encourages them to share their knowledge of specific topics with the team. Esty has carried out a similar idea to this. The business has launched “Etsy School”, which the Learning and Development team manage. The classes are designed to help employees find a focus for their career development.
What’s the average budget?
According to Efront, a typical company will allocate 2-2.5% of its budget to employee training and development. This can cover anything from online or IRL courses, maintaining training, coaching and staff retainment.
In a report published this year, Statista documented that the average employee spend on Learning and development worldwide has increased from 2008 to an average of 1,308 U.S. dollars (1057.35 GBP) per worker. That means that companies are willing to invest in their employees more so than ever.
Where can the budget be spent?
Some budgets are spent on conference training and learning programs, whereas others are spent on coaching qualifications or development. Companies such as Hustle Crew have hired a careers coach for their HQ team, which consists of a monthly one to one and group coaching session focusing on mental and physical barriers and how to overcome them.
Other companies offer development planning, Professional Growth Planning, Vision and goals programs and stretch roles.
But how do we increase awareness of asking for an L&D budget within your organisation? And how do we measure its success rate?
A great way to measure the success rate is staff retention. We see trends in many industries where members will stay within a role for 12 months to 2.5 years and then decide to leave. This is more reflective of a junior or entry-level role. Many senior positions tend to be filled longer. This could be because individuals are more confident and assertive when in a senior position. When someone starts in a junior role, typically, company culture isn’t always the most encouraging, and that career projection isn’t there.
Below are some tips on how to increase awareness when asking for an L&D budget…
Look into what competitor companies are doing and how they are allocating their budget. Look at Glass Ceiling and see if anyone from that organisation has mentioned L&D training or company culture.
Define company pressure points
Map out where development training would be beneficial. That might look like investing in career skills coaching or industry knowledge.
Use the SMART approach
Rely on SMART goals to determine your roadmap – Specific, Measurable, Achievable, Relevant and Time.
Book a meeting with your manager
Schedule some time with the head of your department or manager so you can talk through your request. Remember to come prepared!
However you decide to package the offering, L&d budgets are a must when wanting to keep your workforce engaged and productive. Gone are the days when an employee would stay at a company for 25 years because it was the done thing. We are now in an age where the digital nomad is thriving, and people are clocking onto the fact that company culture can make or break an individual. Investing in a team or member is crucial to any successful business, so don’t get left behind. Invest today. Check out my workshops and programmes for more info on how to develop and support your team.