As the financial year draws to a close in Australia, organisations are busy finalising budgets and planning for the year ahead. One line item that should not be overlooked during this process is allocating adequate resources for Learning & Development (L&D). Investing in employee development is not only beneficial for individual growth and business performance but also plays a pivotal role in enhancing employee retention.
In the past paying for training or L&D has been perceived as an unnecessary expense and in my experience, it is the first item to be impacted when there is a need to reduce costs, however, there is evidence to support being proactive about budgeting for investment in Learning & Development can positively impact your bottom line, business performance and culture.
So what can you expect if you budget for Learning & Development activities in your business?
Increased Employee Retention
Employee retention is a concern for all organisations. Research has consistently shown how a strong correlation between learning opportunities and employee satisfaction, engagement, and loyalty. When employees feel that their development needs are being met, they are more likely to remain committed to their organisation. This, in turn, contributes to a stable and motivated workforce. According to an article in Australian Financial Review, companies wanting to attract and retain staff need to invest more in upskilling, with 70% of Australian workers saying they prioritise training opportunities over salary when looking for a new role.
Increased Job Satisfaction & Engagement
Budgeting for L&D demonstrates a commitment to employee growth, which can significantly impact job satisfaction and engagement levels. In this AFR article runners-up in the professional services category of Best Places to Work is insight agency TRA and their research showed that learning and development programs are key to boosting employee job satisfaction, motivation and retention. By allocating resources to training programs, workshops and skill-building initiatives, organisations foster a positive work environment and encourage employees to be more engaged in their roles.
Enhanced Employee Skills and Competencies
In today’s rapidly evolving business landscape, skills and competencies can quickly become outdated. By investing in L&D, organisations ensure that their employees possess the necessary knowledge and skills to adapt to changing demands. This not only benefits individual employees but also boosts business performance. A whitepaper published by Deloitte found companies who invested $1 in training received a return of $4.70 in revenue per employee in the same year. Budgeting for L&D allows organisations to stay ahead of the curve and foster a culture of continuous learning.
Retaining Top Talent & Reducing Turnover Costs
High employee turnover can have a significant impact on your business’s bottom line. The costs associated with recruiting, hiring, and training new employees can be substantial. Investing in L&D demonstrates a commitment to employee growth and development, making employees more likely to say with the organisation in the long term. According to a Forbes article, 76% of employees are more likely to stay with a company that offers continual training. By allocating resources toward L&D initiatives, organisations can retain top talent and mitigate the financial burden of turnover.
In conclusion, the business case is clear on the importance of providing opportunities to develop you and your teams. Budgeting for this means that your leaders and your team are empowered to make it happen.
The FifthEagle team can provide you and your HR team the support to ensure you have a strategy for L&D and budget effectively for it in your business. From advisory, guidance and coaching to more hands-on creation of L&D strategy and practices, we can assist with as little or as much help as you need. Get in touch to talk through how we can help.