9 Things to Consider When Creating Your Learning and Development Budget

7 Considerations When Developing Your Training BudgetThis blog post was originally published on September 20, 2017 and was updated on December 2, 2020.

Creating a budget for developing your people can be a daunting task for many HR professionals. Throw in a global pandemic and you've got an even more challenging task. While there are many unknowns, it's still critical to plan and be clear about specific learning needs and associated costs.

You can alleviate some of these “pains" by doing your due diligence during the creation of your learning and development budget. Here are nine actions to consider when creating your budget.

1. Benchmark Your Organization

The average direct learning expenditure per employee is $1,299, and the average amount of formal learning hours per employee is 34.0, not including informal learning such as on-the-job learning.[1]

Understanding your industry and how your organization compares to these national figures may give you a baseline for your budget planning. However, every organization is different, and therefore, has differing needs and approaches to staff development.

2. Conduct a Training Needs Assessment

A Training Needs Assessment is one method that can be used to improve the predictability of your professional development for the next year and for years to come. It is best to conduct a Training Needs Assessment annually. A Training Needs Assessment can be conducted in-house or you can bring in an outside consultant to assess the needs of your organization.

An assessment like this can help determine where the opportunities for improvement are in your organization. It can determine if you need to dedicate monies to leadership development, or succession planning if you have an executive or manager that will be transitioning out of the organization. It can also determine if you need to re-train managers on how to conduct performance reviews or at least provide refreshers on a regular basis.

You can determine these things by talking to your people and looking at your people metrics. If your turnover rate is increasing, find out why, then figure out what type of training, either for the managers or the employees, is necessary to improve that metric.

When conducting a Training Needs Assessment, it helps to assess needs categorically (e.g. by location; division/department; position level, manager vs. individual contributor, etc.). When there are large groups who need the same training, it makes it easier to know whether classroom training is the answer, individuals should be sent out, or webinars or e-learning should be used. 

3. Initiate Employee Engagement Surveys

With millions of employees working remotely, employers should consider adding employee engagement surveys to their budgets. An employee engagement survey measures the strength of the employees' emotional connection and commitment to the organization and its goals. Research shows engagement contributes to a number of business outcomes, including increased retention, motivation, and productivity.  

Employee engagement surveys are usually administered online. Standard and pulse versions are typically available. The data can be segmented and analyzed by using demographic categories like location, division/department, and position level.  

4. Review Administrative Costs

The administration costs that you can budget for truly depend on the size of your company. If you are a small organization and the only administrative aspects to training fall on an HR Generalist to coordinate and schedule training for a group of 60 people three times a year, your administrative line may be very minimal.

However, if you are a larger organization that needs to track and evaluate the training of 500+ employees, you may want to invest in an LMS (learning management system) to document, track, and report all of your training programs.

5. Invest in Consultations

Not every workforce “pain” you experience can be fixed by sending a handful of employees to training. Sometimes the pain is actually a strategic misstep that needs to be addressed on a higher level. Sometimes the pain is when only one employee is experiencing issues which may be resolved with one-on-one coaching rather than sending the employee off to training. 

For instance, if you are having trouble with one or two recruiters bringing in talent to your organization, you may be able to alleviate this issue by training those recruiters directly.

However, if your organization is experiencing a high turnover rate and is losing out on high-performing talent during the recruitment process, it may be time to take a look at your overall talent management strategy.

6. Experiment with Train-the-Trainer

Mid-size or large organizations that already have an in-house trainer on staff for onboarding new employees or training on soft skills can actually send their already-salaried trainer to training that teaches them how to train employees on a specific topic.

This is ideal for organizations that already have an instructor on staff and are looking to expand their in-house training capabilities.

7. Support Employees with Coaching and Mentoring

For many avenues of professional development, particularly for employees on leadership tracks, it’s important to support those employees by helping them achieve their objectives and goals. Coaching is typically focused on ensuring that key employees such as senior leaders and executives are continuing to develop effective workplace behaviors. Coaching can be paired with assessments that help identify leadership and interpersonal styles and areas of improvement.

Mentoring programs can also be developed for employees who may not be (or desire to be) on leadership tracks but are still looking to grow as a professional. Mentoring programs can either be set-up in-house in which more senior employees are mentoring entry-level or associate employees, or they can be set-up to involve outside professional networks. In either case, training for both the mentors and for those being mentored is necessary to ensure the mentees get the direction and development they need.

8. Factor in Direct Costs (The Basics)

Whether you are using an outside firm or an in-house instructor, there are a laundry list of questions you must ask and things you must account for, direct-cost-related, when developing your learning and development budget. Also, depending on your organization's comfort level with the risks associated with the global pandemic, you may want to factor in (or out) instructor travel, facility rentals, and any costs associated with in-person training. Here’s a list of a few direct-costs to consider, if applicable:

  • Trainee travel, lodging, meals, etc.
  • Instructor travel, lodging, meals, etc.
  • Instructor fees
  • Facility rental
  • Technology costs
  • Materials (workbooks, videos, etc.)
  • Evaluations

9. Don't Forget Indirect Costs

There are a number of indirect costs you also have to account for when developing your budget. These indirect costs include things such as employee absence and impact on the organization. In fact, if organizations are averaging 34.0 hours of formal learning per employee per year, accounting for employee absences adds up quickly.

This also affects any position that may need a replacement to fill-in during their time in training and that cost should be accounted for in your budget. 

[1]The Association for Talent Development’s (ATD) 2019 State of the Industry report

ERC provides customized training for organizations across the nation.

Train Your Employees

Using Assessments to Develop Employee Learning Paths

Developing Learning Paths for Employees with Assessments

Talent, in many organizations, seek learning and development opportunities to advance their careers. They often look to their employer for support and guidance. Therefore, it is important for organizations to provide structured learning. However, many employees may not know where to start when it comes to their professional and career development. Organizations have the unique opportunity to provide the “where to start” for employees in conjunction with developing the skills necessary for the overall goals of the organization.

Read this article...

4 Rising Training Trends of 2017

4 Rising Training Trends of 2017

A report by IBM found that “84% of employees in Best Performing Organizations are receiving the training they need compared with 16% in the worst performing companies.” To ensure that employees are receiving the training they need, it is important to stay up training trends. Learning and development is an ever-evolving concept that adapts to enhance the experience and the outcomes of learners.

Read this article...

7 Rising Trends in Employee Training and Development in 2016

2016 Training Trends

“The only thing worse than training employees and losing them is not training them and keeping them.” This Zig Ziglar quote is one many businesses can relate to. The cost of NOT training employees can be substantial to a business. However, when it comes to training employees, it is beneficial to be up-to-date on the ever-evolving trends. In Josh Bersin’s Forbes article, “The Learning Curve Is The Earning Curve,” he points out that “learning is part of economic survival for most of us” and if businesses don’t make an effort to continuously re-skill employees, they will fall behind.

Read this article...

The 15 Attributes of a Great Workplace

The 15 Attributes of a Great Workplace

ERC's NorthCoast 99 program recognizes great workplaces that excel at the attraction, retention, and motivation of top performers. ERC is proud to have recognized great workplaces in Northeast Ohio, and has accumulated a great deal of insight into what makes a workplace truly great through the research we conduct as part of the program.

What makes a great workplace that draws extraordinary employees to love coming to work every day? What makes a great workplace that attracts, retains, and motivates the very best talent?

Here are 15 attributes that we believe are characteristic of great workplaces for top talent, based on our research over the last 15 years.

1. Offer Challenging and Meaningful Work

Great workplaces understand the importance of keeping employees' work interesting, exciting, challenging and meaningful, because consistently, top performers say that challenging and meaningful work is the number one attribute they seek in a job.

2. Hire and Retain Great People

Great workplaces are made up of great people. Within great workplaces, top performers work alongside other top performers who are positive, hardworking, committed and loyal, believe in what the organization does, and participate in making the workplace great.

3. Provide Competitive Compensation

Great workplaces offer competitive and fair compensation, above-average pay increases, and opportunities to earn more pay based on performance, such as bonuses, profit sharing, and other incentives to keep and reward top performing talent as well as attract new talent.

4. Value and Reward Employee Contributions

Great workplaces show they appreciate and value employees and their contributions. They celebrate success often, and praise, recognize, and reward employees in a variety of formal and informal ways. They never miss an opportunity to say 'thanks' for employees' hard work.

5. Invest in Training and Development

Great workplaces invest in training and development for their workforce to grow their talents and capabilities. They make time for learning and support it by paying for employees to participate in various opportunities and offering/delivering a variety of training and career development programs.

6. Guide, Support, and Develop Top Performers

Through performance management practices that help guide, support, and develop exceptional performance, great workplaces provide clarity on how to be a top performer, help other employees become top performers, and assist existing top performers in sustaining top performance. Reaching for excellence each and every day is what makes great workplaces successful.

7. Encourage Work/Life Balance

Great workplaces are flexible to employees' work/life needs and encourage work/life balance by offering flexible schedules, providing generous paid time off, accommodating individual requests and needs, and creating a supportive work environment that is understanding of personal and family obligations.

8. Invest in Employees' Health and Wellness

Great workplaces genuinely care about their employees' well-being. They offer wellness options that help employees develop healthy lifestyle behaviors as well as provide an array of benefits which support their employees' health and personal welfare.

9. Involve and Empower Employees

Great workplaces involve and empower employees by listening to their input, involving them in moving the organization forward, and giving them opportunities to lead initiatives, collaborate with one another, participate in decision-making, and make a meaningful difference at work. At great workplaces, employees believe that their opinions matter and that they can positively impact their organizations.

10. Share Information About the Organization's Performance

Leaders frequently share information about the organization's performance, its financials, the vision and direction of the organization, and other critical information and updates at great workplaces. In addition, leaders regularly interact with and communicate with employees one-on-one, in small groups, and as an entire staff. Additionally, great workplaces help everyone understand the mission and purpose of the organization, and how their work connects to the big picture.

11. Are Led by Exceptional Leaders

Great workplaces are led by exceptional and inspiring leaders. Leaders set the example from the top and lead the organization well. They genuinely care about and value employees. Relationships between leaders and employees are characterized by mutual respect, trust,  honesty, and support.

12. Encourage Innovation and Growth

Great workplaces are successful, growing, and innovative. They hold themselves to high standards, are focused on delivering exceptional customer service and quality, and strive to innovate and continuously improve their organizations. They are always raising the bar in their businesses and in their workplaces.

13. Hire the Best of the Best

Great workplaces hire the best—and only the best. They recognize that a great workplace and culture results from great people. They define the talent they need, strategically recruit it, and put into place selection practices that identify top performers, as well as on-boarding practices that engage top performers and set them up for success from the start.

14. Create and Sustain a Unique Culture

Great workplaces have a unique culture that is their own, often described as fun, congenial, collaborative, positive, passionate, and creative. Their work environments, people, and workplace practices all help create a vibrant, positive, magnetic, and infectious culture.

15. Serve the Community

And last but not least, great workplaces make an impact on and give back to their local community. Not only do they generously donate their company resources to the community, but they also serve their communities by helping others in need and offering their staff's time and talents.

There is no magic formula for achieving a great workplace, and these are just some common attributes of many that great workplaces seem to have. While no workplace is perfect, many organizations strive to become a truly great workplace and come close. The NorthCoast 99 winners are among these organizations, and they, as well as all other organizations that strive everyday to be great workplaces, should be applauded for their efforts to become employers of choice in Northeast Ohio. They are truly making a difference.

Want to stay up-to-date on the latest HR trends?

Subscribe to ERC's emails to stay up-to-date with the latest updates and trends in the Human Resources and learning & development industry.

Subscribe Now

Are Your Supervisors Prepared for These 5 Challenges?

are-your-supervisors-prepared-for-these-5-challenges

The following is a complimentary audit and assessment consisting of key questions your organization should ask to determine if your supervisors and managers have the appropriate skills and competencies to combat the most common management pitfalls. Additionally, tips we frequently recommend to organizations in addressing these pitfalls are summarized.

Challenge 1: Exposing the organization to liabilities

Organizations are exposed to liabilities when their supervisors and managers are not knowledgeable of employment law or understand how to apply legal guidelines. For example, supervisors and managers may make selection decisions based on non-job related criteria or subjective biases, ask inappropriate interview questions, not document performance, misapply wage and hour law (not recording overtime worked, not providing necessary breaks, etc.), or fail to handle employee issues with consistency.

Key questions include:

  • Are supervisors and managers knowledgeable of employment laws and do they successfully apply these legal guidelines in the workplace?
  • Do supervisors and managers ask appropriate interview questions, if they are responsible for hiring duties?
  • Do supervisors and managers participate in making legal selection decisions, based on job-related factors and qualifications and not based on any protected criteria (such as gender, race, national origin, religion, etc.)?
  • Do supervisors and managers understand wage and hour law (FLSA) and how it affects the pay of their employees?
  • Do supervisors and managers discipline or handle issues of employee conduct with consistency?
  • Do supervisors and managers understand the basics of managing employee leave, particularly FMLA?

Challenge 2: Failing to document and manage performance

Performance management is a common struggle for many supervisors and managers. Oftentimes, we find that the supervisors and managers are not doing enough to support the employee in achieving their performance expectations and standards and not providing regular feedback, counseling, and coaching. In addition, correctly documenting performance is commonly overlooked.

Key questions include:

  • Do supervisors and managers generally have a high performance work team, or do their employees struggle in reaching certain performance standards or goals?
  • Are employees aware of what is expected of them in terms of performance?  Do supervisors and managers communicate these expectations to employees?
  • Do supervisors and managers take the performance review process seriously? Do they understand its importance and how to prepare for and deliver a performance review?
  • Do supervisors and managers document any and all incidents of poor performance? (note: this is also a potential liability)
  • Do supervisors and managers guide performance through regular feedback and coaching?
  • Do supervisors and managers support performance with development and training if needed?
  • Do supervisors and managers have conversations with employees about their career aspirations and developmental interests? Do they follow-up on insights obtained in these conversations?
  • Do supervisors and managers continually challenge and empower their employees?
  • Do supervisors and managers make themselves available to answer employee questions about projects, assignments, and tasks?
  • Do supervisors and managers recognize and thank employees for their contributions when they do a good job?
  • Do supervisors and managers criticize more than they praise? Is there an imbalance of negative and positive feedback, and is this justified?

Challenge 3: Poorly communicating

Inadequate communication manifests itself in a number of problems including poor supervisor-employee work relationships, frequent misunderstandings of job tasks or policies/procedures, and unclear expectations. These issues often surface from poor listening, relationship building, clarifying, and feedback skills and lead to frequent supervisory problems.

Key questions include:

  • Do supervisors and managers establish rapport and positive relationships with employees?
  • Do supervisors and managers engage in frequent methods of in-person communication?
  • Do supervisors and managers actively listen to employees’ concerns, problems, and questions?
  • Do supervisors and managers clarify points and issues, trying to better understand work problems employees have?
  • Do supervisors and managers ask for employees’ viewpoints and opinions?
  • Do supervisors and managers exhibit effective non-verbal communication with employees? Do their words match their body language?
  • Do employees often feel confused when completing work assignments, or do misunderstandings frequently occur?
  • Do employees receive enough performance feedback from supervisors and managers? Do they understand where they excel and where they need to improve?
  • Is the feedback provided by supervisors and managers constructive and well-targeted at behaviors needing changed?

Challenge 4: Failing to resolve conflict

Many managers fail to resolve conflicts between employees and coworkers or may perpetuate too much conflict in their groups. It’s common for supervisors and managers to avoid conflict altogether. In addition, they may not do enough to prevent conflict.

Key questions include:

  • Do supervisors and managers work to accurately define and identify key workplace conflicts or are problems frequently incorrectly identified? 
  • Do supervisors and managers recognize the causes of conflict?
  • Do supervisors and managers understand and costs of conflict on your business and recognize its effects on productivity?
  • Do conflicts generally go unresolved by supervisors and managers, or do supervisors and managers create different strategies to manage and resolve conflict, ensuring that it has a limited effect on performance?
  • Do supervisors and managers frequently collaborate and strive for “win-win” approaches to conflict?
  • Do supervisors and managers try to prevent conflict by encouraging positive coworker relationships, encouraging recognition of individual differences, and addressing work problems quickly before they escalate?
  • Do supervisors try to adapt to different personalities and styles in order to maximize their effectiveness?

Challenge 5: Not understanding their role

Typically promoted from individual contributor roles, supervisors and managers find themselves not understanding the new requirements and expectations of their role, or encountering common challenges like micromanaging, distrusting employees, treating employees poorly, or not making time for them. 

Key questions include:

  • Do supervisors and managers frequently encounter challenges on the job, in dealing with employee issues and problems?
  • Do supervisors and managers understand how their role is different than that of their previous role as an individual contributor? Do they understand its importance in driving results through others?
  • Do supervisors and managers understand the responsibilities of their role and how to carry them out?
  • Do supervisors and managers make time for employees, balancing task completion and building supportive relationships?
  • Do supervisors and managers show trust and confidence in employees?
  • Are employees excessively directed and micromanaged?
  • Are employees treated with respect and courtesy? 

Addressing Management Challenges

If your supervisors don’t have the right competencies in place, there are a number of ways to develop them. In our experience, these are the most common and effective ways to build supervisory and management skills:

  • Supervisory and managerial training
    Training is one of the best and most common ways to develop supervisors’ and managers’ abilities. Consider registering them to attend ERC’s Supervisory Series, an affordable training program that develops their skills in all of these critical managerial areas including communication, conflict resolution, performance management, and employment law. This program can also be delivered on-site and customized to your organization’s needs. 
  • Skills coaching and mentoring
    Sometimes a more personalized and customized approach is necessary to develop skills and solve specific managerial and supervisory issues, particularly when training has already been conducted. This can be facilitated either through mentorship of leaders internally or skills coaching with an external consultant
  • Management literature and educational materials
    Articles and learning aids are another great way for supervisors and managers to develop their capabilities and can be great follow-up resources for after training to help transfer skills learned back to the workplace. Checklists and forms that guide behaviors learned in training can help them stay better organized on the job. These can be created in-house or training programs may have them available.  

Interested in learning more about training your supervisors?

Submit your contact information and receive instant access to a video highlighting our process and a brochure featuring our courses, delivery methods, and success stories.

Preview Supervisory Training

 

Receive email updates

Never miss an update. Sign up to receive weekly emails with our latest posts.

Subscribe

RSS Feed

Recent Posts

Tag Cloud

See all