Fall is in the air. That means four conversations have taken over the workplace: Football, the election, all things pumpkin-spice, and planning for your 2017 training budget. MSEC might not be able to help you with the first three, but we can help you tackle the last one. If you want to improve the odds of scoring a touchdown on your 2017 training budget, consider the following:
- Hours: The number of hours employers dedicate to training initiatives can vary. According to great Places to Work, which measures policies and habits of Fortune 100 companies, top organizations on average provide salaried and hourly employees with 73 and 58 annual hours of training, respectively.
- Percent of Payroll: There is no set formula defining what a training budget should be. According to the Association for Training and Development (ATD), most training budgets range from 1 percent to 3 percent of payroll. Training budgets of more than 4 percent are often differentiators of true learning-focused organizations and best places to work.
- Amount per learner: According to Training Magazine’s Training Industry Report, organizations spent, on average, $702 per learner in 2015. This included payroll and spending on external products and services.
Designing Your Playbook
As you begin your budgeting process, consider the end zone. What are your goals for the year? How do the training initiatives you are trying to support align with business outcomes? Prioritize those needs based on the overall impact to the business. Training topics to consider include industry- or profession-specific training, compliance (e.g. harassment, safety, etc.), business procedures, management and leadership skills, and technical and interpersonal skills.
As you evaluate your goals, consider the following questions:
- What training needs are the most urgent or imperative?
- What training needs are critical to reducing important risks?
- What training needs will have the most impact on performance (quality, efficiency, etc.)?
- What training needs do current and future leaders have, or are critical for succession planning?
- What training needs will have the greatest impact on morale, retention, and engagement?
- What training needs are best addressed through in-house development vs. external partners?
Avoid a Technical Foul
While a winning strategy is built on understanding the big picture, don’t blow the game by neglecting to consider some of the more technical details. These include:
- Do you anticipate turnover? Is your organization expected to grow next year? All of these will impact your overall expenses.
- Will you be making investments into technology to support training? Do you need a Learning Management System (LMS) to track training progress? Will you be engaged in online learning? Do you need to purchase software? How will you manage remote learners?
- Do you need to budget for travel? These little training expenses can add up.
The Wrap Up
Investing in your employees’ knowledge and skills makes smart business sense. Well-trained employees perform better and make fewer mistakes. They have greater motivation and drive to do well. They have increased loyalty toward their employers. Just as importantly, they pose less liability. Whether it be the hard liability of negligence in complying with industry-specific laws and regulations or the soft liability of customer service or employee retention, a poorly trained workforce costs you much more than you could ever spend. Now time to get back to that pumpkin-spice latte.