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How-To: Create a Learning and Development Budget

The 2018 UK Learning and Development Report revealed that over 50% of respondents spend up to £200 per employee per year, although 12% spend over £1,000.


A clamp holds money over a calculator, on a sheet detailing CPD budgets

However, the pandemic has produced a huge change in how learning and development is carried out. It has shifted to taking place mostly online, and any in-person sessions have had to be readjusted in terms of venues and class sizes to be safer for attendees. We’ve been out of strict social distancing regulations for a while and are heading into a new year with new regulations. Therefore, now is the best time for heads of learning and development to be reassessing their budgets to suit 2022 strategies.


If you’re ones of these heads of L&D, read the below article to look into how to create or alter your next training budget.


A CPD team sit around laptops working on a learning and development budget

Starting Point


The best starting point is to look historically at your budgets. Find out what percentage of last year’s salary costs you spent on training. If your training needs are the same, you would usually keep working with this percentage. However, post-pandemic training needs and methods are likely to be quite different.


In 2020, 57% of learning and development professionals planned to spend more on online learning, but 35% of those people had prioritised self-directed learning and engagement. In 2022, we expect self-directed learning to still be a part of learning and development, but your budget for this can be expected to drop compared to 2021. However, it will be more stable than this year. 2021 saw rapidly altering regulations, lockdowns, and delays to lockdowns being lifted, but we shouldn’t see the same patterns in 2022. Therefore, we recommend only slightly reducing your budgets for online learning, and not expecting fluctuations in it throughout the year.


Usually, the percentage of your salary budget that you put into training will be anything from 1-5%. This will depend upon your organisation’s size, industry, and any other factors relevant to your organisation’s specific situation. Now furlough has ended, this figure need not be altered by reduced salaries, and it can be used for a much longer forecasted estimate than the previous 2 years.


However, using this percentage method will not work if your organisation is experiencing hyper-growth or acquisition soon or currently. Nor will it work if your organisation expects to dramatically reduce in size this year. Therefore, remember to relate this to the needs and overall landscape of your organisation.


Regarding other ways in which the pandemic will have affected your learning and development budget plan, instead of it being dedicated to perhaps one major annual conference plus a few smaller workshops, you will probably be holding more, smaller, events, to account for social distancing and to allow for people in your industry to actually meet face-to-face without having to worry about these smaller sessions being cancelled.



A man and woman sit at a laptop to work on an organisational plan.

Alternative Starting Point


An alternative method might therefore be to take an inventory of your organisation’s different learning needs (e.g. leadership development, communication skills, on-boarding for new employees or members). Then, assign what costs will be assigned to these. For instance, how many participants can take part in a leadership development course for it to be effective? How many instructors would be effective for this class size? For how many hours do you need to pay them? What resources or materials do you require for these sessions, that your instructor cannot provide? What is the structure of this training?


Additionally, we’re living in an age of hybrid working and hybrid CPD. Therefore, you need to take into account how your learning and development resources will reach your audience. Do you need to livestream group sessions, record on-demand resources, or charge your learners for accessing an online e-book? These prices all need to be considered.


You’ll also need to add new technologies to your budgetary considerations. Using the latest technology is essential to keep your learning and development offerings up-to-date. ThinkHR stated that last year, 33% of people development professionals used a learning management system, while 49% used online compliance training.


If your training is delivered via a course, one of your very first steps should be to investigate which course providers will give a volume discount for enrolling a large amount of participants at once. This will significantly affect how much of your budget is devoted to the base training delivery.

A professional camera records a CPD event

Top Tip For Increasing Your Budget:


If a large portion of your budget was initially spent on delivering multiple training sessions, you can very easily create a larger budget by getting your first session recorded, so it can simply be replayed at your next session rather than you needing to spend extra for the same session to be held again. This is a great way to create an efficient training budget.


A group of colleagues have a group discussion at some sofas, about their development

Democracy in Learning and Development


Our final tip is to listen to your learners. Just because you’ve spent more on a certain course, or the price looks reasonable for your learners, does not mean that the learning itself will be effective. And if it’s ineffective, learners won’t be motivated to complete it or participate in future CPD from you.


Survey your learners about what they want to see in your learning and development sessions. Adjust them accordingly, and cut things from your budget that your learners are uninterested in and that are irrelevant to their career path.


We’ve talked before about the Great Resignation – if you want to keep your employees invested in your company, you need to listen to them about the learning and development that they want and expect to receive.


Overall


In conclusion, 2022 training and development budgets need to take into account salary changes, new learning and development technologies, and the opinions of your learners.


To talk to us about your 2022 event budget, so that we can help you incorporate livestreaming and training videos in a cost-effective manner, contact us via our form here.

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