Sometimes a learning or training budget can seem like a luxury. However, without one, your business can really fall behind.
Providing a learning budget for your team has so many benefits, that extend way beyond the ability to upskill your team and have a more diverse skills pool. Learning budgets can boost motivation, make employees feel valued and help your people to develop in their careers. The real question then, is perhaps why would you not give your team a learning budget?!
Take a look at the top reasons we think a learning budget is one of the best initiatives for any business.
You’ll normally find people using the terms learning and training interchangeably, and the same thing happens when we talk about learning and training budgets. However, there are clear differences between the two, which influences how they’re spent and the return you get on your investment. So, how do learning and training budgets differ exactly?
Most of us have been on training courses. We’re taught general skills or knowledge that we’re tasked with transferring to our job when the opportunity arises. The challenge is whether we get a chance to apply it before we fall foul to the forgetting curve – the natural process of information escaping our brains in the hours and days after we learn it.
If the majority of the information is lost, it’s pretty hard to present a good return on your investment and training budget. Normally, you’ll see training materials distributed to tackle this, but when they’re long-form and unable to provide specific guidance in overcoming hurdles, they’re unlikely to help with recall.
Learning has the 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.
When the two words are mentioned, think about your perception of how and where they happen. For most of us, training sounds like something formal and scheduled rigidly into our calendar, whereas learning is something we do informally all the time.
That also has an implication for our learning vs training budget debate. Training courses want to present value for money, meaning they’ll try and teach you a huge amount of information in a limited time period – most likely increasing our slide down the forgetting curve. The amount you’ll supposedly learn from the course and the follow up training materials justify a fairly handsome fee and that’s where most of our training budget gets spent.
Our learning budget, however, takes a little and often approach. Rather than trying to teach a single employee everything on a particular topic, they can learn when the moment of need arises. Imagine there’s a new product launch coming up and we have a good copywriter in the marketing team but little PR experience.
In that instance, we can provide learning content on how to write a press release. We’ve taken into account their current skills (they’re a good writer), recognised what they need to reach a short-term goal (crafting a press release) and not overloaded them with knowledge, skills and training materials that’ll soon be forgotten (like signing them up for a two-day course on public relations as we might be tempted to do in training budget world).
Essentially, it’s a mindset shift away from training to learning. For years, training budget has been a staple in the management and HR vocabulary, but we need to retrain our brains to think learning budget. If we do, and we provide each employee with a development pot of their own, we’ll have plenty more benefits than when we’re stuck in the training budget paradigm.
When there are skills gaps within your business, it becomes a priority to fix those gaps before you fall behind. Annoyingly, this process can be time consuming and expensive.
In fact, research suggests that replacement costs for an employee can be as high as 50-60% of an employees annual salary – so potentially tens of thousands of pounds.
With a healthy investment in L&D and a learning budget for your team, you’ll be able to upskill the people you already have rather than having to employ new members of staff. This can save huge amounts on hiring costs, and result in a team that grows together.
One of the most obvious benefits of giving your team a learning budget is that your business will have a highly skilled workforce that’s better equipped to deal with business challenges.
With a learning budget in place, you give your people the power to identify their weaknesses and invest in the areas that need work so that they can flourish within your organisation.
This in turn makes your people, teams and business on whole, a lot more competitive. A skilled workforce is a lot more agile and able to adapt to challenges than one that is stagnant and reliant on old skills to get them through.
With the ever-changing world of technology impacting businesses and causing disruptive changes, it’s essential that your people have the tools they need to evolve and keep growing.
Another major benefit of giving your people a learning budget is that they will be more motivated to work for you. This creates the benefit of having happier, more fulfilled people working for you and also increases the likelihood of them excelling their role and boosting your bottom line.
We all love learning new things, and when an employer invests in us, it makes us feel valued. Research has shown that companies who spend above average on training per employee are twice as likely to have highly satisfied employees, which in turn keeps them happy and motivated in their roles. It’s a win win!
Following on from the last point, when employees are motivated and happy at work, they are much more likely to stay. We all know that hiring costs are excessive, and it’s much more effective to retain the talent you have, but many businesses don’t realise how a learning budget can affect this.
The truth is, teams with a learning budget keep their people, which results in lowered hiring costs and a more fulfilled team that grows with the business. In a recent study none of the companies surveyed who spent £300+ on training per employee had a retention rate of less than 6 months.
This shows that spending on a learning budget for your people really pays off, and helps you keep them in the long run.
Giving your team a learning budget will not only make your people happier, more skilled and more engaged at work, it will also make your business money.
According to Business Training Expert, companies that offer comprehensive training programs have a 218% higher income per employee. Plus, these companies also enjoy a 24% higher profit margin than those who spend less on training.
It makes sense that this would be the case, since employees who have the tools to excel in their jobs are much more likely to be a valuable asset to the business.
Do you want to learn more about the best ways to offer your team online training? With an AI powered platform that is tailored to each employee, you’ll be able to upskill your team in no time.