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How do we split our training budget?


We have just learnt what our training budget for 2009 will be and the Head of HR has asked me to look into how to best split the budget this year.

We are divided into operations and central (finance, HR, IT, sales etc) and it was suggested that we just allocate an amount per head (FTE). However, we do not feel that this appropriate as most courses for HR, IT, finance and sales are much more expensive than the training for operations staff.

Please does anybody have any suggestions as to how I can find a solution to this?

Many thanks


Heather Bruce

7 Responses

  1. What does the business need?
    Hi Heather

    My answer is actually some more questions for you. You probably need to do some TNA

    What does the business need to achieve this year?
    What do the staff need to be able to do to achieve that?
    What can/can’t they do at the moment?
    What is essential to ‘plug’ the gaps?
    What would be a ‘nice to’
    Can it be done internally or would you need to outsource?

    The answers to all these questions should then help you allocate the resources/budget you have most effectively

    Hope this helps



  2. Be Business Led

    I think allocating an amount per head and giving it to your divisions on that basis would be inappropriate.

    Your learning needs to be aligned with your business priorities. These might mean a focus on say compliance, sales, product knowledge, new systems, customer services or professional skills depending upon your business needs.

    Alignment is a key factor for success according to ASTD, you can read more on strategies for alignment here

    How you spend your learning budget is also important. The Bersin review of US companies in 2008 found the following split for large companies:

    Virtual classrooms 13%
    Classroom 55.5%
    Online e-learning 21%
    Other 10.5%

    You can see the report here

    Hope this helps.


  3. Split it with a weighting?
    Taking on board the previous comments that spend should really be split in a way that achieves your corporate goals for the year.

    Would it be possible for you to then allocate it on a per-head basis but with an appropriate weighting fo the more expensive parts of your business to train.

    So if the average cost of a course in Finance, HR, IT. Sales, etc is 2.5 times the cost of a course in operations you allocate 30% of the pot to Ops and 70% of the pot to the rest (that was a really rough calculation so I hope I’ve got it in the right ball park!)

  4. Allocating the budget
    I’d steer clear of any simple distribution formula. As you have already spotted, the cost differential is one spanner in the works but there are others. Things that may affect different levels of training include performance levels, turnover of staff and any operational changes. Things that affect the cost include types of learning solutions available, the numbers needing any particular learning and discretion exercised by line managers.
    I’m afraid there is no substitute for analysis and distribution according to prioritised needs.

  5. Another spanner…
    Hi Heather

    I would just like to add another facet to this. As if you didn’t have enough!

    According to Reuters’ 70:20:10 rule, (which is a variation on Jay Cross’s 80:20 rule), 70% of work-related learning takes place as “learning on the job”, 20% is learning through coaching, feedback, networks, etc. and only 10% is the result of formal learning. But of course, it is into this 10% that the bulk of our training budgets are poured.

    How about considering investing a larger percentage of your budget in empowering staff members to access coaching/mentoring or to take an active part in online communities of practice? I reckon you’d get a lot more bang for your buck that way! On top of which, you’d be at the leading edge of emerging technologies for organisational learning and development!

  6. Focus on priorities and impact
    Hi Heather

    I think in these challenging economic times it is vital to allocate scarce resources to those areas that are likely to have biggest impact on business performance.

    Think about the challenges your organisation faces and think about what mix of development opportunities could you could propose that would make a difference across the whole organisation.

    In some of the functional disciplines like HR and Finance make sure your people are taking full advantage of the many free and low cost options offered through their professional memberships.

    Hope that helps.

    Duncan Brodie
    Goals and Achievements


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