Creating an ROI-Focused L&D Budget: 6 Questions to Ask
Creating an L&D budget is a huge undertaking. It takes a lot of time and planning, and you need to be able to show ROI every step of the way. In this blog, we look at what you need to know.
As much as it pains us learning professionals—there’s only so much money to go around. So, when companies decide to invest in L&D programs, they want to see return on their investment (ROI).
While those in L&D roles should always be mindful of ROI, it’s most important for the ones making budget decisions. But ensuring your decisions are efficient and effective means answering a few key questions first.
6 Questions for Creating the Right L&D Budget for Your Program
Use these questions to inform every step of the L&D process. Framing your decisions around these questions will help keep your L&D program focused on getting the best results for the least amount of spend, maximizing ROI from design to development to implementation.
#1) What Are Your Corporate Objectives?
The objectives of the company inform every aspect of designing and implementing an L&D program; therefore, they will always inform the budget. Be sure that the budget is adequate to succeed in reaching these corporate objectives.
If it’s not, be prepared to show the company why their budget won’t help them reach their objectives. You might be able to convince them to give more funding if you can effectively show that funding will directly lead to better, measurable results that make it easier to achieve larger corporate objectives.
#2) How Does Training Align with Corporate Objectives?
Now that you know the corporate objectives, it’s time to develop training that aligns with those objectives. This question will be more useful for course designers and learning managers as they create learning strategy and implement the course.
But in terms of the program budget, think of it this way: How do you best align the budget to the training that will achieve desired results for the least amount of money?
Be in constant communication with your managers and designers. Make sure that what they suggest is within budget scope. If you need to look for alternatives to the original design at any step of the way, make sure they can also achieve the necessary alignment between training and corporate objectives.
#3) How Will You Determine Success?
Success can be determined in a lot of ways—course completion, certificates gained, measurable outcomes reached. It’s important from a budgeting standpoint to know how success will be determined and measured. The more granular a company wants to get with their data and reporting, the more expensive the reporting solution will be.
If measurably proving success is important (and it usually is), then you need to make room in the budget.
As budget planner, you need to be informed on every step of the L&D process. You need to be able to get input from multiple departments—research, design, management and implementation—and make the most prudent decision on where to allocate resources to achieve overall success based on each of their KPIs.
#4) How Do Your Learners Learn Best?
Finding a way to best serve your learners for the least amount of spend is critical. This knowledge is particularly helpful for designers who determine what the training will look like—including the methods, technology, modality, delivery method and program length.
If designers determine that a robust Learning Management System will drive the best outcomes by better accommodating the learners, then you need to be able to defend that decision in the budget if there’s pushback from the company.
#5) How Do You Prepare Everyone for Training?
When companies decide to embark on L&D initiatives, it usually causes shakeups in organizational processes and structure. One of the goals of training employees is to drive and bring about some sort of change for the better.
Proper change management helps prepare the entire organization for the new training program - increasing engagement and improving the overall success of the L&D program. So you’ll want to make sure your budget includes funds for developing a strong change management strategy.
#6) What Will It Look Like 2–3 Years from Now?
Technology changes rapidly, and the way business is done changes as a result. Are your training topics evergreen? Or will you need to make updates?
When you make a training program, L&D professionals own that program from end to end. That includes updates to course material and structure, should things change. Like everything else, that cost needs to be in the scope of the budget.
At the end of the day, you’re responsible for building a budget that accounts for what your employees and company needs, every step of the way. Answering the above questions will help you think about your program’s design, development, outcomes, and the impact on learners down the line. By the end, you’ll have a complete and defendable L&D budget.