Talent development is an important part of creating new competitive advantages.
A more skilled team can produce more work of higher quality no matter what industry you work in. The benefits go beyond a marginal improvement in daily output, though: They also empower innovation by equipping contributors with tools for creative problem-solving.
And there’s one more vital benefit that’s simple, but easy to overlook:
An investment in your people is an investment in your people.
When you choose to make employee training a priority, you send a message: People matter.
In today’s economy, skilled professionals are in huge demand. While few people expect to spend the rest of their lives at their current company, they are always on the lookout for opportunities to grow. When they find those opportunities, they are more likely to stay where they are.
That helps you recruit and retain the best teams at all levels of the organization.
Employee training is no longer limited to onboarding. The best employee training programs have a comprehensive approach with many touch points, allowing professionals with different areas of responsibility to stay up to date on the skills that let them perform at their best.
Once an employee training program is in motion, team members who participate see benefits.
The challenge: Building a financial framework around a program where return on investment isn’t always directly provable in the short-term.
Not only do you need hard numbers, but the ability to make the case to executives.
Let’s look at both halves of that process: Developing the budget plan and presenting it.
4 Steps to Outline Your Employee Training Budget the Right Way
Employee training investments aren’t an exact science. That said, you can get a good idea of your needs by following these four steps:
There are several must-haves in any employee training budget:
- The cost of hiring, developing, and retaining your training staff.
- Necessary learning facilities, such as meeting rooms or laboratories.
- Training materials and hardware, potentially including computers.
- The cost of consultants to set up curricula or train your personnel.
Naturally, the structure of your employee training program will make a big difference. You may be able to avoid many additional investments in computer hardware if you establish an IT device management policy that allows people to bring their own devices from home, for example.
In some cases, initial assessment can take longest of all the steps. You might need to look at solutions on the market, contact vendors, and request proposals. Robust research at this stage is worth it, though, since it ensures your budget will get you where you want to go.
Although you can’t predict how each employee will use the new knowledge from a training program, you can evaluate where you stand to gain advantages through new knowledge capital.
Skills may be the bottleneck holding you back from using particular software, equipment, or techniques. Getting detailed 360° feedback from all stakeholders is the best way to go.
Remember, front line managers and team members often have a very different take on what they need than directors or executives. It may take time to synthesize all perspectives into a clear plan.
Although face to face training can make a huge difference, it’s not scalable or sustainable for all enterprises. The cost-effective way to deliver knowledge on demand is with SaaS solutions.
Software provides customization and flexibility to tailor material to the needs of specific learning groups. This is true whether you purchase access to a platform that offers pre-loaded content or develop your own – most simply, by recording lectures your trainers give.
There are three generally accepted ways to calculate an employee training budget:
1 - Total Annual Salary Budget x 1%-3%
This method ensures your training investment grows with your organization. You select the specific percentage based on your training goals or the norms within your industry. As you grow, your ability to share wisdom will as well.
2 - Per Employee Average x Employees
Many industry associations offer research on the average training investment per employee in their sector. Aligning your training expenditure with industry expectations helps ensure you won’t fall behind your direct competitors.
3 - Cost Estimate Basis
If you’ve developed a detailed estimate of the potential costs of your plan, then you can use it to estimate costs. Although there’s no specific formula to help with this, it’s a good idea to take the budget figure you created and add 10%. Divide it by 12 for monthly estimates.
Presenting Your Employee Training Budget to the COO
Presenting to executives is a skill that takes time and practice to master.
The more you’ve presented in the past, the easier it is to get over any jitters you might have. But the art of presenting to high-level decision-makers is nuanced. It requires you to get out of your own head and get into theirs.
Here’s how you can make an outstanding impression:
1. Get to the Point Quickly.
First and foremost, understand that executives have a lot on their plate. They are showing you respect by giving you an opportunity: Do the same by using your time wisely.
In most cases, it’s best to start with the centerpiece of your idea, then add context and supporting details. Starting with the biggest idea will frame everything else you say.
2. Plan for Questions and Interruptions.
Interruptions happen with top-level leaders. Be ready to think fast on your feet and handle them as they come. Questions tell you what the audience is interested in and where you might need improvement or follow-up.
No matter how much time you’re given, prepare and rehearse material for about half of it. Be ready to open the floor for questions in the remaining time.
3. Talk in Terms of Metrics, Outcomes, and ROI.
Executives care about measurable outcomes. You can connect training investments to results if you delve deep into your business situation. Getting feedback from across the enterprise is the key.
For example, you may learn you could gain 10% sales productivity if the sales team was trained to use the latest CRM and enablement tools. How would that translate for your business?
4. Include Strong Competitive Research.
Competitive research cuts through the clutter by providing stark choices in relation to the biggest potential challenges to your market leadership. Just as in marketing and sales, what works for your rivals may well work for you. Third-party overviews on the state of your industry can help you make the case for more proactive investments in your talent pool.
5. Make Your Data Easy to Digest.
Although your own words form the heart of any presentation, many executives want to double-check your facts. Presentations should come with plenty of clear visual aids, especially when making sense of data.
Help the audience retain and engage with your work by ensuring materials are available for your audience’s review, both in digital and a professionally printed format.
For both your budget and your presentation, preparation is the key. It makes the difference between a “nice to have” and a foundational element of your operations plan that enables your long-term strategy. Luckily, investing in people pays off!