In today’s rapidly evolving work environment, professional development is no longer a nice-to-have perk, it’s an imperative. With budgets tightening and workforce disruptions such as layoffs affecting many sectors, now is not the time for organizations to eliminate employee professional development and training. Likewise, individuals should continue to upskill regardless of whether organizational resources are plentiful. In this article, we explore ways that executives may approach learning and development (L&D) spending, as well as strategies for employees to secure professional development funding.
For Managers: How L&D Can Keep Teams Competitive
In this first section, we’ll explore three key strategies for managers to effectively allocate resources for L&D, even during difficult economic times. When they better understand the importance of such programs, leaders can make more informed decisions that benefit the organization in the long term.
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1. Assess the risk of cutting L&D budgets.
When budgets are tight, L&D is often among the first programs to suffer cutbacks. This frequently happens because training is perceived as the low-hanging fruit when it comes to justifying budget cuts. However, these types of short-term cost-saving measures may not be a wise strategic move for executives. Having well-trained employees is critical to staying competitive, and we encourage executives to assess the risks their organization will be taking should they decide to eliminate employee training dollars.
For example, organizations that cut L&D spending may fall behind when the economy recovers compared with those that maintain their investments. As a result, workers could lack the critical skills needed for organizational success. Furthermore, investing in L&D helps companies do more with less. The number of skills needed for a single job has increased 10% annually since 2017, according to research conducted by Gartner. Those organizations that continue to prioritize upskilling will have employees who are up to date on the skills needed to accomplish their work, whereas organizations that significantly cut L&D likely will not.
PwC’s annual CEO survey found that companies with advanced L&D programs in place had higher employee engagement and were better at attracting and retaining top talent. Executives must keep this in mind, even in the face of economic downturns, because slashing L&D budgets can increase the risk of losing talented employees.