For those of us working in the Learning and Development field, we know the benefits that come from an organisation running training for its staff: increased employee productivity, engagement and retention, to name just a few. We also know one of the biggest limitations for what actually gets achieved within an organisation is access to an adequate budget.
When senior managers don’t appreciate what L&D could bring to their teams, they tend to be less inclined to fund larger programmes, and ultimately the entire organisation suffers. This is why we’re outlining ways that can help you convince the key decision-makers in your organisation of not just the benefits of training, but also how it’s a smart financial investment that ends up paying for itself.
Understand the decision-making process
For your first step, make sure you know who you need to convince. Is it your manager, or are his or her decisions simply a mouthpiece for their superior? This is crucial for understanding the viewpoints and priorities you’ll have to contend with.
The next step is to actually understand why your company runs L&D in the first place. In the mind of the senior team, is learning truly about developing the workforce and enriching staff’s lives, is it all about upskilling in the name of increased output or a combination of these things?
Know your key metrics
Whichever approach your organisation takes to staff learning and development, it’s likely that success will be measured against certain key metrics. This means knowing how to quantify, measure and analyse these should be central to your work as an L&D professional.
Remember, these metrics aren’t necessarily the ones you believe are most important, but the ones you think will convince the decision-makers of the benefits of L&D. Your goal here is to prove L&D’s ROI by matching your learning solutions to the business’s core objectives, so pick metrics which align with this. If the company takes the view that training is purely to boost productivity, then you want to focus on measurable increases in sales figures or staff output. If they want to take the enrichment route, then you should start thinking of ways you can measure staff satisfaction levels before and after training. Ideally you will include both.
It’s important to make sure the business benefits are clear either way. If you’re able to align what you measure with what’s important strategically to the business you’ll get greater buy-in.
Work with senior managers to decide your key metrics for measuring your return on investment. By collaborating together, you can be sure you’ve set rules you both agree with, and you know you’re focussing on their strategic priorities. This means that when you come to organise learning events, you can be sure you’re hitting all the most relevant points.
Consider the real costs of learning solutions
Before you can justify the costs of L&D, you need to know what those costs are. Of course, there are upfront financial costs of buying online solutions or organising training, but it ends up costing more than just that. Factors such as the time spent on consulting, design work, setting up courses or virtual sessions and staff expenses are all things you might have to defend.
Also, choosing to run a particular course means that you’re not running something else. For example, you may have chosen to help one team with their presentation skills, which means you’ve effectively made the choice not to help another team with their time management skills. Be prepared to explain, using your key metrics, why you decided this specific solution was the better option.
Be aware that many people may resent your training for taking time away from actively working. However, this time away from their desks should be looked at as a positive investment. Compare it to being in a long strategic planning meeting: in very literal and practical terms, you don’t produce anything during that time, but you leave the meeting with a better understanding of the company, the project and the vision, meaning when you do get back to your desk, you’re in a better position to work more effectively. Similarly, sitting in a two-day training course might initially seem like a bad use of your staff’s time, but the new skills they learn will make them much more productive and engaged in the long run.
Employee retention vs the cost of replacing staff
Up to 94% of employees say that they’d stay at an organisation for longer if it invested in their learning and development.1 This means organisations should view learning as an investment in their workforce, saving the cost of hiring new employees.
Generally speaking, the cost of replacing an employee is between 50-250% of their annual salary (depending on what they earn).2 Knowing these sorts of real-term figures can be a very helpful and persuasive when justifying your L&D budgets.
It’s also important to note when you do need to recruit new staff members, being able to boast you have a strong culture of learning and development makes you more attractive to better candidates, especially the newer generation of workers who want to know that their jobs will offer them opportunities for personal growth.
Training helps to upskill your workforce…
Although L&D doesn’t just have to be about training your staff in the practical skills directly related to their jobs – it probably should involve this at some level. Once senior staff and decision-makers recognise how your training can bolster these abilities, especially if you do so within the context of specific metrics and ROI, they should be much more open to funding your training courses.
This is true of ‘soft skills’ too. Although these are sometimes less directly linked to the performance of a specific job, they do help people to be all-round better employees. Things like time management and communication skills are transferrable between many different roles and creates a more adaptable workforce.
…which leads to increased productivity and engagement
If the promise of a more adaptable and effective workforce doesn’t convince your organisation to fund your L&D solutions, you may want to inform them that surveys have shown 17% of the workforce is actively disengaged from their job.3 This means they’re unhappy at work, turn up late, miss days and generally have lower productivity. This type of behaviour is estimated to cost up to 34% of an employee’s annual salary.
Additionally, the CIPD found that 54% of long-term absences for work are related to stress, and of those 62% are linked to the employee’s workload. They also found that only half of managers have been trained to manage stress, and just 30% say that they’d feel confident having sensitive conversations with their teams.4
If you keep your staff happy and engaged, run training to boost their productivity and help with their workload, and train managers in the right communication skills, then the cost of training staff versus the money wasted on disengagement should easily tip the scale in favour of L&D.
The training must be good
Once you’ve persuaded your decision-makers to give you a budget to run training sessions, you need to use it wisely. We’ve already looked at your metrics and justifying the costs, but this all assumes that you’ll put on worthwhile training. Some senior staff may be tempted to give you a bare minimum amount to run average quality training, but this would be a mistake.
The most important thing to remember is any training you run must be results based and linked to the company’s overall strategy. The annual spend on corporate sales training in America is estimated to be around $3 billion a year, and is increasing, but they’re seeing a 5-year decline in annual quota attainment. This is believed to be due to training being based on knowledge and theory, rather than linked to real world results.5
A recent survey of learners found that only 27% felt their organisation’s training was “meaningful and useful,” compared to 32% who found it “not useful.”6 At best, this means bad training is merely a waste of time and money, but of those 94% of employees who stay in a company because of the training opportunities, how many of them will be put off by having to sit through bad training?
Overall, it should already be obvious to those of us with an understanding of L&D that running training for staff can create a real financial boost to an organisation, but those in other positions often need convincing. By using actual figures to show the financial costs, plus extras like the number of hours out the office, balanced against the expected growth in productivity, engagement and staff retention, you should be able to show how your training courses will pay for themselves, if not create an overall profit.
Check out our training courses to find some engaging programmes for your organisation.
1 LinkedIn (2019) 2019 Workplace Learning Report
2 LinkedIn (2017) 2017 Workplace Learning Report
3 LinkedIn (2017) 2017 Workplace Learning Report
4 CIPD (2019) Health and Well-being at Work Survey 2019
5 Sales Performance International (2019) The Sales Training Dilemma
6 Intrepid (2019) The State of High-Stakes Learning