Since the beginning of the COVID-19 pandemic, economic uncertainty has left companies struggling to adapt. For many businesses, this has also triggered a major shift in focus from experimental growth to cost effectiveness, and extending cash runway.
Doing more with less has become a higher priority across all industries. Although many L&D departments are no exception to shrinking budgets, it’s not all doom and gloom. With talent acquisition on the back burner, L&D teams are now at the frontline helping companies retain and upskill their existing workforces. Employee retention has renewed importance, as L&D programs support employees affected by wavering morale and heavier workloads post-layoffs.
This means now is the prime time to optimize your L&D strategy and prove your impact–but it can be tough to know where to begin. That’s why we spoke to industry experts from our L&D Collective about their experiences and strategies to maximize L&D budget efficiency in the face of economic downturn.
Read on for their top five tips to make your learning & development budgets go further in 2023.
1. Practice hyper-visibility with stakeholders
David James, CLO at 360Learning, led the UK Learning & Development team at Disney during the economic downturn of the late 2000s. Knowing how important it is to do more with restrictions on budgets, he says, “My first instinct at that point was survival.”
During tough times, L&D budgets are often the first to be cut. That’s because it can be notoriously difficult to measure ROI, despite making up a considerable amount of company spend.
David’s advice this time around is for L&D leaders to become hyper-visible. That means taking the initiative to regularly consult with your stakeholders, so you can proactively diagnose critical issues that you could add value to. Then address these with deeper discussions, workshops, and digital resources.
The first step is engaging in conversations with stakeholders about what’s keeping them up at night. Discuss their business priorities (rather than their learning priorities) and explore ways you can facilitate team conversations and add value.
“My first instinct at that point was survival.”
During these tough times, employees want to feel that their prospects are improving, even if their pay isn’t. So seek to understand what this actually means to them and find ways to help them take advantage of development opportunities.
To achieve more with less, L&D professionals need to be laser-focused on first understanding, then addressing, actual points of friction. Apply this to conversations and at scale with highly-contextual digital resources–and don’t hesitate to lean on internal experts for both.
Speaking of points of friction: as you prepare to discuss money matters with company leadership, check out our cheatsheet below with talking points on how to defend your L&D budget to your CFO.
L&D budget conversation? Nail it with these talking points.
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2. Double down on DIY employee training
It’s no surprise that budgets will shrink in 2023, making it more important than ever to get the most out of a small L&D budget. Joshua A. Luna, Founder at Mgmt On-Demand, achieves this with a DIY approach to employee skills development.
When companies work with flexible budgets, L&D can invest in enterprise software to train their staff, or develop original content and programs for specific training needs. But these processes take significant time and money to define, implement, and execute.
So when faced with budget restrictions, taking a DIY approach to employee training can still drive impactful results, at a fraction of the cost. Josh explains that building your team’s interdisciplinary skills can create value that far exceeds any budget limitations.
There are now a plethora of affordable and accessible online resources to learn skills like graphic design, video editing, and even copywriting. By supporting your team to expand their range of interdisciplinary skills, you can help them find creative and cost-effective solutions to challenging problems.
Combine this with a dedicated learning and training schedule for your team, and you’ll have upskilled employees who can push the boundaries of what an L&D team can accomplish. All without breaking the bank.
3. Use frontline L&D insights to drive better learning impact
Everyone has a role to play in driving impact with fewer resources. Though of course, not all L&D roles involve direct budget management. L&D professionals without budgetary oversight can still contribute significantly to cost savings by deciphering what's working best with their learners, and replicating that success.
Dolores Gaut, Training Specialist at Cognizant, breaks down exactly how these employees without budget responsibilities can still drive efficiencies in L&D spending on a larger scale.
“Oftentimes, if you’re not in a formal leadership role, you're likely on the frontlines training,” explains Dolores. “This means you’re listening to the pulse as it’s beating.” To make the most of what you have and what you’re given, you need to be a true L&D specialist. That means knowing your role inside out, how it impacts the business, and how it makes your leaders’ lives easier–and harder.
Identify the learning strategies and tactics that work best in the field, and communicate these insights with higher-ups. To do this effectively, position yourself as an advocate for stakeholders on both sides, i.e. team members and budget managers. This way, you can increase operational efficiency, saving the company time and money.
By supporting your team to expand their range of interdisciplinary skills, you can help them find creative and cost-effective solutions to challenging problems.
4. Prioritize L&D spend on higher ROI initiatives
It’s natural for L&D budgets to fluctuate from year to year. However, L&D professionals should always strive to achieve the highest learning value for their learners and business.
For Shane Halifax, L&D Partner at Burendo, the secret to smart budgeting is prioritization. “Start by critically examining every expenditure and learning initiative, and quantifying what benefits each brings, whilst also considering how this aligns with our company's business goals,” he explains.
This process should be data-driven and include insights from your key stakeholders. Once you’ve compiled this list, review every program and expenditure by assessing their level of impact on the business. After identifying those with the least impact, decide whether they can be removed, replaced or reduced.
By methodically removing initiatives that don’t meet business targets, you can replace them with more cost-effective alternatives. This process of auditing and pruning L&D spend also enables teams to investigate how to achieve similar or greater impact by reducing costs.
5. Align L&D strategy with greater business objectives
ROI from L&D isn’t always clear cut, which can make it challenging to justify new initiatives. Arizona Parker, L&D Manager at Sendoso, is an expert at developing L&D strategies in the face of shifting priorities, big goals, and tight budgets.
Her insider tip? Ensure your initiatives are closely aligned with the overall goals of the company. If possible, connect with department leaders and key stakeholders to identify their top priorities (as they’ve likely changed), and use this information to guide you as you prioritize expenses for 2023.
Arizona also emphasizes the power and value of internal knowledge-sharing. Every employee has unique knowledge that can enable and inspire other team members to do their jobs more effectively. Explore ways to capture this knowledge and make it shareable.
At Sendoso, the L&D team hosts monthly learning sessions that feature employees from different departments. Each session is recorded and made accessible through their company intranet. These sessions are an engaging way to highlight employees’ accomplishments, build skills and department knowledge, and connect learners - all with little to no cost.
And building on Joshua’s excellent advice, Arizona points out the value of diversifying your L&D strategy with more accessible training resources. For example, if your company provides a learning stipend to employees, you can put together a list of top courses and certificates. Another idea is curating articles, podcasts, and videos through an internal newsletter or Slack channel.
Diversify your L&D strategy and network
Smaller budgets can make L&D more challenging, but not impossible. By staying curious, experimenting, and collaborating with learners, you can still provide learning opportunities that make a lasting impact.
Want more L&D insights and discussions? Join our global Slack community, The L&D Collective, below to connect with industry leaders and fellow professionals shaping the future of L&D.
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