Offering training and development in your company is a perk you can add to your compensation and benefits package. It’s a perk employees seek and consider when job searching.
Not only does offering learning and development (L&D) opportunities help you retain employees, but also drives your company forward.
But where do you start with L&D? It’s best to allocate a training and development budget for the company as a whole and for different teams.
There is no one-size-fits-all with training and development budgets. They vary based on the size of the company, the teams that need training and development the most, the size of each team, among others.
Keep reading to uncover the benefits of offering L&D in your company. We’ll also show you how to create a training and development budget.
Why is training and development important?
Companies benefit from training and development in many ways.
1) Up-skilling the workforce
Companies offering L&D opportunities can up-skill their teams and employees so they’re more competitive in the company and the market.
This means they’re able to do their jobs better and faster. They’re also more proactive and more productive.
2) Stronger connections and higher purpose
In LinkedIn’s Workplace Learning Report 2024, respondents view learning and development as breaking barriers and boosting their “sense of connection.”
According to the research, 70% of employees who get training and development report higher “sense of connection to their organization.” Meanwhile, 80% said “learning adds purpose to their work.”
Companies can see this in the form of pro-activeness, higher productivity, a desire to become leaders, and potentially faster growth.
3) Employee retention
Training and development is one of the top reasons employees choose to stay at a company.
When companies invest in their teams and employees, the latter become loyal to the company. They become comfortable in their growth and accordingly, work on helping the company grow, too.
Investing in your employees and teams increases employee retention and loyalty.
“Employee growth, through learning and career development, spurs company growth. Likewise, company growth, through business innovation, energizes people to stay and grow even more.” LinkedIn Workplace Learning Report 2024
4) Reduce employee turnover
Naturally, with higher loyalty and retention, you can reduce employee turnover.
Aside from seeking higher pay, one of the top reasons employees leave their current jobs is because there are no training or growth opportunities.
A 2021 survey by the Pew Research Center found “low pay” and “no opportunities for advancement” as the top reasons employees quit the jobs.
5) Better engagement
Another benefit of offering training and development opportunities for employees is higher employee engagement.
When employees get training, they become more confident in doing their jobs, making them productive and more engaged at work.
6) Higher job satisfaction
Higher employee engagement combined with L&D programs and easier internal movements translates to better job satisfaction for employees.
Employees who are satisfied in their roles are more likely to stay, and less likely to leave.
In other words, training and development improves satisfaction, retention, and engagement.
7) Better employer branding
A long-term benefit of offering training perks in your company is its positive impact on your employer branding.
While this shouldn’t be the reason you offer L&D opportunities, it does impact your company’s reputation in the market.
Companies offering training to their employees enjoy a reputation of investing in their teams, and accordingly retaining them for longer.
A strong employer brand acts as a magnet for talented candidates and contributes to employee retention.
How to determine your company’s learning and development plan
There are three main ways or models companies determine how to go about providing learning and development for teams.
- You can review your company’s needs and assess them accordingly to create a training program.
- The manager or team leader identifies the problem and searches for ways to solve it through L&D accordingly.
- You can offer continuous training through an L&D team.
This team is tasked with following the company’s objectives and offering training in the form of leadership and team-building events.
They offer training to both new and current employees.
What to consider when setting up a training and development budget
Before you can offer training opportunities in your company, you need to set up a training and development budget.
But where do you start? Here are X tips and considerations from me as Tawzef business development manager.
1) Assess your team(s) and their needs
The first step in setting up a training and development budget is figuring out what each team in your company needs.
This step should be carried out by both HR and team leaders or managers. Each manager should identify the areas they need to improve across their team.
HR should then get this information from every team in the company to create an L&D budget per team and for the entire company.
The best way to figure out each team’s needs is to ask them about the problems they’re facing.
Ask team members what areas they need training for to get an idea of problems they have and types of training they need.
2) Uncover top pain points
To offer meaningful L&D opportunities to your employees, you need to uncover the pain points plaguing each team and the company as a whole.
Doing so requires talking to managers in different teams and departments.
Team leaders and managers should identify the top pain points in their teams. They should also ask their team members about their problems to get an idea of the problems they may not be aware of.
For example, one team member maybe overloaded with administrative tasks that take up time and effort. This employee may suggest getting training for automation tools that speed up their work and give them more space to focus on other areas that need their attention.
3) Determine the type(s) of training needed
Once you’ve figured out the needs of each team, you need to determine the type or types of training you’d like to offer.
These are the main types of training companies offer:
- Development of soft skills, like negotiation, sales, and leadership skills
- Increasing knowledge of certain areas or fields to improve workflow
- Training for a new tool or software
Training can be carried out
- Internally, by having a manager offer the training.
- In-house but by hiring an external instructor or training company.
- Online, by exploring various training and development programs for employees.
- A combination of the internal, in-house, and online.
4) Estimate number of hours needed
The next step is to estimate the number of hours needed for the training you’re offering.
This is especially important if you’re hiring an external training company or instructor as it’ll have a strong impact on your training and development budget.
5) Set up KPIs
Part of creating a training and development program and budget for your teams is to set up relevant key performance indicators (KPIs).
Training and development KPIs measure the impact of your L&D on teams and the company. They also measure the responsiveness of team members to your learning and development plan.
Some of the top training KPIs include:
- Average time to completion
- Training pass and fail rates
- Impact on job performance
- Learner retention rate
6) Calculate estimated ROI for this training
Finally, you should estimate the return on investment (ROI) of your training programs. The ROI doesn’t have to be a financial return but it can be measured in different ways.
For example, training ROI can look like
- Number of hours saved per week/month
- Increase in number of deals (by percentage)
- Increase in number of tasks (specify tasks) completed per week/month
Among others.
Each team will have different ROI results depending on the problem you’re trying to solve and the training they receive.
Consider continuous L&D for your company
It’s important to look at training and development as a continuous process. It’s not a one-time thing.
For example, if your company runs a call center, you should offer continuous learning and development for call center employees.
This helps them help customers faster, finish calls faster, and close tickets quickly, which, in turn, translates to a higher ROI and customer retention.
Conclusion
There are different ways to look at your company’s needs when it comes to offering training and development benefits.
It’s important to determine how you want to offer L&D in your company. Like many things in business, setting up your training and development budget is a learning opportunity in itself.
Including your team in the decision to get training is important to ensure they’re receptive to the training offered. It can also shed light on issues you may not be aware they’re struggling with.
Need help determining your teams’ needs and offering the right training to them?
Get in touch with Tawzef. Our experts will help you identify your needs, estimate your ROI, create your training and development budget, and grow your business.
