Devising your L&D budget during a downturn
In a continuation of our series on prepping L&D for rough economic trends, we’re covering our top tips for creating your budget for the year ahead.
Helen Marshall Chief Learning Officer
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| 5 min read
Cometh the hour, cometh the person who has been upskilled to a satisfactory level and can now complete whole new tasks.
Matt Bristow Digital Marketing Specialist
Often, at the start of blogs like this, writers will start with a scary stat, that’s meant to grab the reader's attention, and make them more intrigued in the blogs content. However, we buck trends here at THRIVE. That’s why I’ve chosen to start with 3 attention-grabbing stats instead.
See, packs more of a punch when it is three rather than one right! And there is a kicker. Most of the studies and surveys that these statistics are garnered from a time before the entire world economy started unravelling like a candy floss wetsuit due to the cost of living crisis. This means that the economic impact of reskilling/upskilling (or potential lack of continuous upskilling in your organisation) are going to be far more pronounced than originally expected.
But as highlighted by the World Economic Forums findings listed above (scary fact #3), companies can’t afford to slow down on reskilling and upskilling efforts. If you slack on investing in skills, your organisation is going to end up with reduced revenue and outdated skills to be able to generate new opportunities.
I should probably move on from the “grabbing your attention” bit and move on to the “heroic yet humble solution to the problem I just introduced” bit shouldn’t I?
Back to doing more with less. Productivity and ingenuity are core concepts that will steer every organisation through tough economic times. And one of the best ways to hit these new heights is with a motivated and skilled workforce. In software engineering there is a concept called a 10Xer. A 10Xer is an engineer so talented and resourceful that their work is similar to that of 10 other engineers.
Unless I’ve been hanging out with the wrong crowd, I haven’t met anyone born to code.
The habits and knowledge that comprise a 10Xer are learned and taught through the years. You can create your own 10Xers in any department through targeted upskilling and reskilling campaigns that are future focused, deal with real business impact and are tailored to your learners. Through this you can reduce hiring costs, salary expenses and seize new opportunities whilst remaining agile, which are so key to navigating less-than-friendly economic environments.
Here’s a stat that is going to only become more and more relevant. 93% of millennial and Gen Z workers expect employers to provide training opportunities as standard. By 2030, 75% of the workforce will be comprised of these generations, which means you better be working to develop your training options or you are going to struggle in the recruitment race to hire the best talent.
The key to skills training reducing turnover is decreasing stagnation! According to a Cengage report on what has now become known as the “Great Resignation”, 83% of workers who resigned stated stagnation as one of the reasons they were leaving. It makes sense that if someone is feeling like they aren’t learning anything, then they are going to look for a new opportunity.
We’ve written at length before about the cost of recruiting but I will summarise here, you don’t want to be spending hundreds of thousands of pounds on recruiting new talent during an economic downturn because your turnover is too high.
So, you want to prevent stagnation by investing in your employees skills, so what are you going to teach them? It’s probably not going to be Aramaic or Welsh, but core skills related to the function of your business, which means you are benefiting in A) less turnover and B) more skilled workers. Did somebody say win win?
Human beings love learning. It’s been present in us since the first caveperson wondered if they could get that fish out of that lake with that stick. It speaks to the stagnation point earlier that staff morale is closely related to how much they feel invested in, and how much they are learning.
An economic downturn is, let’s be honest, likely to lower the morale of your organisation, and there may not be many cost effective ways you can raise that morale. Gone are the days for most organisations of being able to fly the entire company out to a swanky resort, you’ll have to get creative and impactful with the investment in your people.
There’s no better way to make employees feel cared for than progression, taking time to understand what new skills they want to develop, and putting structures and investment in place to make that happen. And guess what? Your organisation benefits from this in the long run too!
So that’s reduced turnover, increased productivity and improved morale, all by investing in skills. You can check out how THRIVE helps organisations develop a user led, agile skills strategy or schedule a time to chat to our learning experts!
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