We’ve all heard it: ‘People costs are high, quick, cut the Learning & Development budget!’ This kind of thinking is similar to when a business cuts the marketing & advertising spend but they want more sales.

It’s all well and good to reduce costs affecting the bottom line but considering the consequences of those cost reductions is paramount. Taking a knife to your Learning and Development budget can result in lower employee engagement, less career progression and employees without the knowledge or skills they need to perform productively in their role.

In turn, this affects the bottom line,

  • People leave (recruitment costs hit the bottom line)
  • Employees become, frustrated & disengaged (productivity falls, costs money)
  • Gaps widen in skills and knowledge (poor service means customers don’t come back, sales drop).

There are so many ways in which Learning & Development can contribute to the bottom line.

Here are our Top Three:

1) Turning your organisational objectives into Learning & Development Programs … If you want to drive the ‘Customer Experience’ (meaning it’s more than just ‘standard’ service), it starts with your team knowing what you mean by this and how they go about it. Or, if you want to add more to the bottom line by building in efficiencies and cost savings, consider if the leadership team has the financial nouse to make it happen.

2) Finding out why people leave … Did you know that, statistically, the majority of people leave a job because of poor leadership? Are your Leaders leading in a way that makes your orgainisational vision ring true? Are they in-tune with ‘how they come across’ and their own leadership style?

3) Finding your organisation’s biggest problems, and working with people to solve them … When people don’t know the answer, this costs money. If they pass on a problem, this costs money. If they can’t do the job that’s expected of them, this costs money. Having people on a path of learning (to ensure they can do the job asked of them) delivers dollars to your bottom line and means less performance management. (Now that’s reason in itself)! 

It’s no doubt that employee costs are some of the highest costs in business, if not the highest. That also makes it a common target for cost savings. But before you take a knife to your L&D budget ask yourself…

  • Do I cut Learning and Development or do I reduce headcount and make my current team more efficient and effective? (tough one I know)
  • Is it a cost issue or is it the way money is being spent? Are there more effective Learning & Development programs to impact the bottom line?
  • When was the last time organisational objectives were linked to Learning & Development?
  • Do people feel Learning & Development is a chore or are they excited by it? If it’s not the latter, then it’s costing even more money.

Finding the right mix of Learning & Development, delivered in the right way and where it adds value, is a non-negotiable. We shouldn’t have a disjointed L&D agenda – it should be seamless in assisting the orgainisational objectives to grow.

If you want more on your bottom line, get your people performing at 100%. Learning & Development is a commercial activity and should be managed this way.

Ben Roulston – Commercial L&D Advocate

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