Strategic metrics: making a case for your training budget

L&D teams are under a unique pressure to prove the value of their training programs to their enterprise. An L&D team doesn’t only have to design a complex budget for training, but also must defend that budget with analysis, facts, and a measurable return on investment (ROI). Formulating a budget requires careful consideration, but justifying those numbers is equally challenging, and arguably, far more important.

So, how do you gain budgetary support for learning and growth opportunities? What does it take for a company to say ‘yes’ to a learning program? What kind of metrics matter?

Today, we will examine a simple approach to making a case for a training budget with the hope of empowering L&D teams to improve company growth and satisfaction.

Be clear on your objectives#

Making a case for a training budget requires one simple principle: be clear on your objective. Formulating your plan around a justifiable objective that is defended by measurable results will ensure success and foster credibility for your team. Start with three simple questions when making a case for a budget:

What is my goal?

What do I actually want to measure?

What are the objectives of my company?

These three questions keep your budget plan grounded and direct. Many L&D teams attempt to justify their expenditures with data that they cannot measure once their training programs are implemented. Hard data is different depending on the end-goals. Being clear on your objective will help to avoid miscommunication and wasted budget plans.

Similarly, it is important to tie that objective into your company objective. A training budget that doesn’t serve the larger system is less likely to be accepted. You may even consider the personal motivations of the person to whom you are pitching your case. What are their motivations? How is that person measured? How will my training budget benefit them?

Let’s take a look at two common L&D goals to consider how we might make a case for them.

So, what are the main L&D goals, and how do I measure them?#

I want to increase employee engagement#

Increasing employee engagement is tricky because it is somewhat subjective and harder to measure. As an L&D team, you need to make sure your employees and departments are passionate and supported in their work.

Making a case for training programs centered around employee engagement, therefore, requires data unlike that of marketing or sales. Instead of promising numbers to reaffirm your program’s value, which will likely not accurately reflect its efficacy, consider measuring employee engagement through Glassdoor ratings and reviews.

I want to improve technical skills#

Perhaps counterintuitively, making a case for hard skills development does not require as many hard numbers as you might think. Even if you make a case for an LMS (Learning Management System) based on employee engagement with the software, your employees may not use it, and your results will not fare well. Purchasing an LMS, therefore, should be justified through the necessity for growth rather than the results of that learning.

Make a case that is built around why hard-skill changes are needed. You can even research dollar figures for a risk assessment statement if that training does not occur. Utilizing a narrative-based approach to hard-skills is far more effective than a purely numbers-driven justification.

Even the nature of the hard skills will change your approach to making a case. Not all hard skills can be measured the same way, and not all hard skills training serves the same end. Are you trying to increase tangible skills as your team moves to new technology? Or are you trying to make it a priority for all engineers to have a working knowledge of machine learning? Consider the problem that needs to be solved as you are formulating your case. Your objective matters!

Utilize strategic metrics#

The metrics for these different training programs will largely affect the success and credibility of your budget. Do not justify your training budget with metrics that you are not actually measuring through your L&D program, otherwise, your program will fail to meet standards it was never intended to address. Comprehensive learning metrics encourage trust between business leaders, employees, and L&D teams.

This kind of planning requires some degree of strategizing. Here’s how we recommend approaching your training budget from a strategic, holistic approach:

1. Identify with your end goal. What problem needs to be solved?

2. Determine the best metric for measuring that goal. How do we measure success?

3. Factor in the learners’ intent to learn or participate. How engaged will employees be?

4. Consider how this L&D program fits with corporate aims. How does this serve the company?

5. Formulate your case around these factors and interconnections. How do these four factors intersect to form my case for an L&D program?

Why bother?#

It is important that companies of all sizes invest time and money in learning and development. Improving performance, job satisfaction, and competency is central to the success of any company. And making an accurate, thoughtful case for a training budget helps to protect the budget amount you receive the following years for similar programs.

Your team, employees, or department deserve the chance to learn, develop, and contribute to the improvement of their workplace.