developUs Blog

July 11, 2023 in Blog

4 (and a half) Things to Consider when Planning Your L&D Budget

3 Distinct Budget Scenarios

So… it’s budget time.  It’s either the best or the worst time of the year for L&D professionals.  We’ve been in the L&D game for 2+ decades, 10 of that as developUs Worldwide, serving clients in countries all over the world.  Near and far, no matter when your fiscal year starts and when your budgets are due, there are three things we consistently hear about L&D budgets.

  1. “I’m planning my budget and a need to get a quote from you for next year.”  For obvious reasons, we love these calls.  Not just because people want to engage with us, but because it means training is not just valued, but funded, and the L&D team is empowered to do what’s right.  Perhaps my favorite call ever was from a client that we’ve now worked with for 9 years, who sent an email asking how much they should put in the budget for our partnership the following year. 
  2. “It’s November. We have training dollars to spend or we will lose them.” This is a call that makes us happy for business purposes. It’s also an indication that there was a budget that wasn’t spent yet, which is a red flag that we’re always curious to explore.  This call happens more often than the first.  Companies have either heard of us or have had some experience with us and have money to spend under a use-it-or-lose-it budget philosophy.
  3. “We need so much help, but I don’t have a budget… is there anything you can do?”  While we love to help and will gladly work to find a solution that falls into any budget wherever possible, this is usually an indication that L&D and the holders of the purse strings aren’t aligned on what’s most important.  If you’re in this situation, struggling to claim enough of the budget to develop people, this blog’s for you (Everyone else can keep reading too. Good stuff follows!).

Consideration #1 – What Matters Most?

For every department or critical role, what core skills, if enhanced, would drive the efficiencies and effectiveness that impact business results?

Budget planning requires an understanding of how money is best spent – not how to quiet the squeaky wheel or loudest voice.  Start by building a strong understanding of the business metrics that are being tracked by the C-suite and each department.  Once you understand the metrics that matter, you can hold discovery meetings with department head to identify the skills that the team needs to achieve those results. 

When established strategic goals and business outcomes (revenue generation, cost savings, brand building, and culture building) are directly tied to business results, training is viewed as more of the strategic investment in can and should be and less as the dreaded, easily cut “overhead”.

Bonus Tip: Also consider reducing the cost of stress at work.  Stress-related costs total in the billions (with a “b”) each year due to safety, employee turnover, mistakes, poor customer service, health impact, social media, and employee relations impacts.

Consideration #2 – Learner Experience

Is training positioned and delivered in a way that maximizes learning opportunities and minimizes business disruptions?

When learners participate in training as hostages or vacationers, less learning occurs.  If people are stuck in class when they are worried about their workload, what’s happening back in the office, and their growing email and to-do list, training barely stands a chance no matter how good the design is.  Similarly, when training is an escape from the day-to-day, learners likely aren’t in it to win it. 

When budget planning, consider the following:

  • How can we reduce business disruptions?
  • How can we build structure around training that drives expectations?
  • How can we include reinforcement that includes the manager and performance evaluations (yes, this is a big mountain to climb, we know!)?
  • How can we make the in-learning experience enjoyable for the audience (No, Happy Hour afterward doesn’t compensate for boring classroom training.)?

Learners who are enjoying the learning process learn better, so evaluate your current training with the learner experience in mind.  If the world were your oyster, what would you do?  Yes, you can turn that day-long, in-person training into 6 lunch-and-learns for the manager to lead!  Yes, you can build amazing just-in-time microlearnings to have immediate real-world impact!  Yes, you can bring people in to do cultural alignment work together!  You just have to budget for it.

Consideration #3 – Leadership Skills

What leadership skills would help leaders get more from their teams and prepare new hires for early success?

Training doesn’t change behavior nearly as effectively as leaders do.  There, I said it.  Yet, leaders are often the LEAST trained people in the company.  It’s like we all just expect them to know how to magically make the switch from doing the work to getting other people to do the work, and lead change, and build culture, and handle HR issues and, and, and, and, and.

The best-spent dollars are often on leadership training, so think long and hard about it.  Great leaders get more out of people and get new hires up to speed faster.  Undeveloped leaders usually chase away good talent and allow poor performance to continue.  Budget for it.  Every year. It’s worth it.

Consideration #4 – Consider Your Evaluation Process

How do you plan to measure the impact of training to determine if people really learned anything, and if they did, did it matter?

For those of you who just thought about performance evaluations and not training evaluations, don’t worry, you’re not alone.  Yes, performance evaluations are a great place to start when determining what training to build, but sadly, most performance evaluations are not done with any level of specificity that would drive decisions about training needs.  Ideally, training would support high scores on performance evals for every role, and performance evals would include a connection to the core skills that were taught in training.  For example, if a new revenue-generating method was rolled out via training in a call center to drive revenue, the performance eval for the employees and managers in the call center would include evaluation of that revenue generation activity.  I know, I know, that’s the dream state, but if I’m going to dream at all, I’m going to dream big (PS: If your company does this well, please call me!  I’d love to interview you!)!

But in this training related context, we’re talking about training evaluations.  Good, old-fashioned, yet universally applicable Kirkpatrick’s Levels of evaluations.  We ask about evaluation All.  The. Time.  Above all, our motivator here at developUs is impact.  Training creates learning, and learning changes things.  No change?  No learning.  No learning?  Then what the heck did you just pay us do to?

And yet, more often than not, we hear, “Well, we have a standard evaluation that we use…  Oh, we should be doing more?… Yeah, well, I can’t bite that off right now, but it would be nice to have someday…”  Crash course in evaluation coming in 3…2…1…

  • Level 1: Did they like it?  Think smile sheets.  The facilitator was knowledgeable.  The room was comfortable.  The food was good.  I’d recommend it to a colleague.  Most people stop here.
  • Level 2: Did they learn it?  Think testing.  Many people avoid going here for any number of reasons.  Find a way to overcome it.
  • Level 3: Do they leverage it? This one is all about transfer back to the job.  This is where things get tricky on the surface, but can be easily solved with a little creative thinking.  The solution is different for every client, but if people aren’t doing what you taught them to do back on the job, what was the point of teaching them to do it at all?
  • Level 4: Should we do it again?  Did the intended metrics change?  Did “time to close” go down for your sales team?  Did the call center become a revenue generating center?  Did your managers’ improved career planning conversations produce a clearly defined pipeline of talent for leadership roles?  Did the number of injuries decline while reporting of injuries maintained high levels of accuracy?

Evaluations need to be considered at the beginning, middle, and end of your training process and therefore take time, expertise, and – you guessed it – dollars.  But there’s good news, if you can tie the impact of training to your business metrics in no uncertain terms, you’ve got job security for years to come.

Consideration #4.5 – Determine how, where, and with whom to spend the money.

No matter which one of the budget scenarios listed above you fall into, we’d be honored to have you spend your training dollars with us (I know, I’m biased.).  But an even bigger compliment to the work we’ve done and who we are would be for your trust with a conversation.  If you are struggling with how to get the right budget in place to do the work that needs to be done to support your company’s and your employees’ needs, give us a call.  I’d be happy to help you sort this out, point you in the right direction, be a sounding board, or just be a place to vent.  Most training pros have to fight for every penny they get, so spending it wisely makes a ton of sense.  We’re here to help – no secret sales pitch, just one L&D guru to another.

Kelly Irons


Have thoughts on this?  I look forward to your comments below!

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