How to get the most value out of your L&D Budget

By Reg Agyeman

4 minute read

It is often said that L&D struggles to sell its value to the wider organisation regarding the impact they have on people within a business. At the same time, L&D is picky about where it spends money to build a case that the business can assess value against. This makes it seem at times like getting learning solutions into organisations is a long and arduous process for what can, on face value, be seen to be inexpensive solutions. 

The reason for this is the constant tightrope that L&D has to walk, particularly in challenging economic climates, between being a cost-centre to cut and a source of future value to invest in. Gartner's 2021 HR Budget and Staffing Survey found that 25% of HR leaders said they would cut the L&D budget vs 37% of the same leaders who said they wanted to increase L&D spend! With rising labour costs and inflation, investing in L&D can be seen as indulgent. However, will your business be left behind as future managers, innovators, and thought leaders lag behind their counterparts in other companies that chose to invest?

This illustrates precisely the conundrum faced by L&D, which can perhaps see benefits to some intangible impacts that it believes will be of value while the organisation at large is searching for the specific and measurable value that moves the needle forward on their people.

While the mood music at C-Level towards L&D is changing, evidence of delivering genuine value is what determines whether L&D gets a seat at the table or is left holding the perception of a cost centre within a business. This, in turn, drives the size of the budget allocated to L&D and leads to decision-making driven by showing return on investment (ROI), which is often a difficult thing to prove.

Learning content and the value question

Online content, which is a key pillar of L&D strategy, is an area where the question of value to an organisation is often overlooked by instead focussing on the volume of learning assets procured by L&D. 

The theory is that the investment in one or multiple libraries of content from premium providers offers:

  • huge amounts of digital learning assets
  • a broad choice for colleagues within the organisation
  • a lower cost per course...
  • and, as a result, the potential for higher levels of engagement through learning platforms. 

On paper, a case can be presented that offers ROI on these investments. Indeed, some organisations will cling to low levels of usage that amount to hundreds or thousands of learning hours as evidence that the price paid is justified.

However, with the development of people and their skills being of paramount importance, what if the learning assets provided do not make the individuals better at their job or develop them personally and, instead, Google becomes the first point of call for content that will appeal to them?  How do we place a value on the learning assets in this scenario?

Content libraries alone, with no direction or help in finding relevant content, tend to overwhelm users and engagement decreases. So that once impressive cost per course declines in value over time – sometimes long before the expiry of the subscription – meaning the L&D labours on with irrelevant content offering minimal value to the business, a form of Content Chaos.

How to assess the value of learning content

People don’t want loads of content, they want the right content, and delivering value through content comes from understanding what the business and its people require, then ensuring that the learning platforms enable the delivery of relevant content at the right time.

While this sounds like a simple task, often it is the most difficult.

L&D must act as a translator, taking the organisation's requirements and the skills its people need to develop and applying them to different content libraries that do not use the same language. And L&D can only deliver value by ensuring upfront that the content is in line with the business's developmental objectives over at least a 1-3 year period. 

To achieve this, L&D departments are transforming their strategies by looking more and more at where content can make the most impact rather than evaluating vendors based on the size of the plethora of content that's available. This means thoroughly analysing the requirements of the business and assessing this against the data available on the assets of an external vendor. How these align will provide a better understanding of how compatible the content is for a particular organisation. In turn, that creates a solid foundation for decision-making on where investment can be made.

The key areas that can assist in determining value are:

  •   Critical skill areas within an organisation are the benchmark against which content should be aligned.  These skill areas do not need to be an exclusive or elaborate taxonomies but should be able to describe what the skill means to a particular business, which then enables L&D to assess content requirements against a defined criteria enabling all content vendors propose libraries using a common standard.

  •   Data, data, data! The information on the content preferences on your people have is embedded within learning platforms.  Don't look at what has been completed or the most taken courses. It’s activity against dimensions like modality, style duration, among others, and search terms, that can be used to assess how to advance the content selection strategy.

  •   ROI? How does or should the business judge a return on the investment in content?  While there is comfort in presenting completions, learning hours, or just having a sizeable library, what does your organisation care about?  The C-Level are looking for improved performance and capability. To meet this objective this, the content must be aligned to the skills and the learning platforms must have the ability to clearly define the improvement in skills and the part content has played.

These are just some of the areas that can assist in providing the level of data to both enable the right decisions and to gain increased investment in L&D by delivering the proof the business requires.  Many organisations are now adopting a similar approach. Not only does it challenge L&D to deliver against the objectives and aspirations of their businesses but also forces vendors to up their game on the content they provide and the commercial models that support subscriptions.

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