Six out of ten L&D managers say that their training budget is one of the first to be cut when times are hard, according to a survey by KnowledgePool, the managed learning company.
104 L&D managers were asked about their perception of training within their organisation, 61% claim that cost-cutting exercises during times of financial constraint hit the training budget hard and fast. However the solution to this, may well lie in their own hands; 79% agreed that the sector needed to improve the way training was evaluated, and that ROI in training could be improved.
Kevin Lovell, Learning Consultancy Director at KnowledgePool agrees. “Drastic L&D cuts are not the answer in these tough times,” he explains. “Training that is tightly aligned to business goals is much more important. It ensures that businesses are in good shape to weather current storms and take advantage of the recovery when it comes. One of the great challenges for L&D is how to take a business-oriented view of learning.”
The problem, according to Lovell, is that it is much easier to see training as a cost rather than an investment; and cutting costs by improving efficiency or reducing waste is uncomfortable but defensible in the current climate.
However, the way savings are made often points to an underlying problem. “We know a great deal about what learning costs, but very little about its value to an organisation. Our approach to the evaluation of learning involves post-training analysis which is time consuming, costly and by the time you get the result, it’s too late”.
Lovell suggests a more pro-active approach to assessing ROI.
“Our suggestion is that, rather than trying to assess the business benefit after the training, why not think about the likely business benefit before it takes place? It is quite possible to estimate the expected value of a learning activity at the planning stage – you do it by asking these sorts of questions:
- What business issues do you expect the training will resolve or diminish?
- What business improvements or behavioural changes are you expecting to see after the training, that you can’t see now?
- What past experiences make you think that the proposed learning will achieve these changes?
By asking these questions, you can quickly assess the business value of the proposed learning. Having done that, a number of possibilities open up:
- You can see how well your proposed learning aligns to the business strategy.
- You can estimate the return on investment (ROI) of the proposed learning.
- You can prioritise your learning according to the level of business impact.
- You can tell your business managers the impact of not doing whatever training doesn’t fit within the budget you’ve got.
- You can begin to argue for training budget on a commercial business basis, instead of saying ‘it’s really important’.
“The important thing is you’ll be talking to your business managers using commercial language they will understand,” says Lovell. “We are talking about estimates here, but our experience of analysing learning outcomes after the event shows that most outcomes (good and bad) are not unexpected and could have been anticipated at the outset.”
