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Should L&D control spend or give people learning budgets?

Learning and development teams can be pretty protective over the purse strings. And you can’t really blame them!

When times get tough, it’s often one of the first things on the budget chopping block. In Gartner’s 2021 HR Budget and Staffing Survey, 25% of HR leaders said they would cut L&D spend, representing the second-highest reduction.

What’s interesting is that 37% were planning to increase their spend, which shows the tightrope L&D teams are walking. The impact they can show from that budget normally decides whether they make it to the platform at the end or plummet into organisational obscurity. 

And it’s that fear that drives L&D teams to make all the decisions on how budget is spent, believing it’s their best chance to show a return on investment (ROI). 

But is it? That’s what we’re here to answer in this article. Spoiler alert, it’s probably not because it doesn’t exactly help people grow and provide the best ROI or impact of them all – an improvement in their performance.

The trouble with how L&D budgets are normally spent

When management is driving the spending decisions, we often end up with well-intentioned but badly executed choices. The best example is a course library – giving everyone access to a whole load of content and hoping they find something that works for them.

Leaders are normally time-strapped, and so they think making this executive decision will give people value in the long term while ensuring they’re not the bottleneck. People can get out right away and start finding content on topics they’re interested in. But they’re offering control and autonomy in the wrong way.

They’re simultaneously offering access to one, a lot of and too many things at once. 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!

People don’t want loads of content, they want the right content, which leads us nicely onto…

Learning experiences shouldn’t be built around admin needs

The manager’s convenience is probably the least helpful way to build learning experiences, and yet it happens this way all the time. 

There are two conflicting time issues at the heart of why this doesn’t work. 49% of employees want to learn at their point of need, but a manager’s busy diary means they aren’t always set up to help them do that.

Let’s explain that with an all-too-common example, the end of year review.

Somehow another 12 months have flown by, and your company tells you they want to review the past year, but also plan the one ahead, specifically how you see development happening. In that conversation and the weeks that follow, you’re expected to agree on how your slice of the learning budget pie is consumed.

Normally, this means you become committed to an event or course at some point in the year, and the learning exercise box is ticked. Say you sign up for a four-day course, it took up all your money and then at various points throughout the year, you spot half-day ticketed events that are really relevant to what you’re working on right now.

The money’s gone! And all because your learning and development decisions happened at the manager’s convenience.

Could a bottom-up approach give you more bang for your L&D bucks?

It’s fairly obvious that we’ve been plodding towards this point, but the answer is a resounding yes – in a sense. The caveat to it all is that as a manager or L&D professional, you need to help people establish impact and provide the guard rails for getting there. 

Defining impact so people can learn effectively in moments of need

If you’ve set clear goals, skills to be built and development objectives, there is much more clarity around what needs to be learnt! And that’s because when people are completing the day-to-day tasks associated with those objectives, they can spot knowledge gaps holding them back. In those moments, it’s crucial people have mechanisms for finding the resources and information to conquer those.

Now, in most cases, that actually has very little to do with learning budgets and everything to do with L&D strategy, culture and tech. However, there will be moments of need where a financial component and quick turnaround are needed!

Let’s say you’re drafted in to work on a new product launch that’s weeks away. The team’s lacking a dedicated PR person, and so you decide this is something you can work on over the coming days to give it your best shot. You find a paid webinar and a short online course that are a perfect fit for the topic at hand – wouldn’t it be great if someone could…

Create ongoing channels for communication and learning requests

Our example above shows the importance of having clear channels for making learning requests and having a system that strikes while the iron is hot. 

Managers, we feel a bit bad because we’ve given you a bad rep up to this point, but it’s often a case that the right tools and systems aren’t in place. And this has never been more true for learning requests! Most of the time, you’re dealing with manual email requests that are flooding into an already creaking inbox.

But we’re not the type to come up with problems and no solutions, so let us introduce our Learning Budgets feature!

In a nutshell, L&D admins and managers can set individual learning budgets in HowNow and empower employees to make requests for how it’s spent. All your notifications, explanations and ability to approve or reject requests in one place, making it far easier to manage the process!

Setting a learning budget for your employees to manage in HowNow

We’ll show you it in the flesh if you like? Just book a demo today and we’ll talk about learning budgets, content, all your L&D needs, the weather – whatever it is you want to know about HowNow.

People thrive off flexibility, autonomy and having a say

If you had a dollar for every time people had said flexibility or autonomy over the past year, the learning budget wouldn’t be the pot of cash concerning you right now, trust us!

The irony is that within all those conversations about helping people work where, when and how they do it best, learning rarely crept into the picture. 

This Harvard Business Review article is the perfect example. It’s all about how employees want autonomy more than flexibility in the hybrid working arrangement, making arguments like:

“Intrinsic human motivation — that is, one’s autonomous motivation for personal, psychological growth — is the foundational catalyst of human success and fulfillment.

“According to the two researchers, self-determination is made up of three components: autonomy, competence, and relatedness. They defined autonomy as “the desire to be the causal agent of one’s own life.”

Forget deciding whether it’s a coffee shop or office space, imagine the power autonomy could have on fulfilment if it’s on offer in your learning, development and career progress.

Essentially, with every argument you’ve heard about flexibility or autonomy, apply the principle to learning, and you’ve got the perfect reasoning for giving people a bigger say in how their learning budget is spent!