Committing to the future
For many companies, December is budget season. When senior leaders sharpen their pencils and start reassessing spend for the following year. When savings are required, the first thing on the chopping block is the last thing that should be considered. People and culture development.
It's predictable. Learning and development budgets are consistently the first casualties when organisations tighten their belts. Less than one in four L&D professionals expect their budget to increase this year, according to research from Fosway Group. When economic uncertainty hits, training gets slashed whilst leaders convince themselves they're making ‘tough but necessary decisions.’
They're wrong. And the data proves it.
Organisations with comprehensive training programmes have 218% higher income per employee and see 24% higher profit margins than those that don't invest.
Yet 74% of workers say lack of development programmes is the reason they're not reaching their full potential. I see it and hear about it all the time. It takes some organisations years to commit proper funding to development, then when they do they always say, ‘we should have done this sooner’.
The turnover cost alone should terrify any senior leader paying attention. Replacing an employee costs between half to twice their annual salary, 33% on average. For highly trained employees, that figure climbs to 213% of annual salary. Meanwhile, organisations offering comprehensive training see 24% lower employee turnover.
The maths isn't complicated. Every pound you don't spend on development costs you several pounds in recruitment, lost productivity, and institutional knowledge walking out the door. 94% percent of employees would stay longer if you invested in their development. 70% would leave for a company that does.
Budget season isn't the time to retreat. It's the time to double down on what actually drives performance, your people.
This requires courage. Courage to resist the easy cut. Courage to challenge the spreadsheet logic that treats people development as a cost rather than an investment. Courage to look at the evidence - all of it pointing in one direction - and act on it.
CEOs and People and Culture leaders, this is your moment. The organisations that emerge stronger from any period of constraint are the ones that invested in their people when others didn't. Your competitors are likely cutting their L&D budgets right now. That's your opportunity.
You get the culture that you choose to build. If you want high performance, you must invest in the people who create it. It's not complicated. It's just hard to do when everyone around you is cutting.
