I think the best way to challenge our expectations about what works and what doesn’t is to ask compelling questions. I participated in a webinar by Brandon Hall Group titled, How are you utilizing learning analytics. I’m not sure what I expected, but with a webinar with “analytics” in the title, I must have thought I’d have time to multi-task and work on clearing my email box.
I didn’t. Instead, I furiously took notes on where training dollars are spent and pondered the question put to us by the webinar hosts, “Are you spending money in the right places?”
This post is the first of three in a series where I’ll explore the people, content, and modalities or methods, where our training dollars are going. Together, we’ll explore the questions that can lead you to the best spend of training dollars for your organization.
With just a quick search online I’m convinced the question, “Are you spending your training dollars in the right places?” is far more compelling than the popular searches.
The questions I see and hear most often are:
- Why should we spend money on training?
- How much can we afford to spend on training?
- Is the money we’re spending on training worth it?
For this post and the two subsequent posts in the series, I’m going to ask you to make several assumptions.
- You are investing in regular training for your employees.
- Whatever you are spending, it’s enough.
- You want to increase the ROI from your training dollars.
Okay, now that you know I’m not going to convince you to spend more on training, you can relax and join me in exploring a deeper question.
Who is getting the biggest share of your training dollars?
In a 2016 study*, the Brandon Hall Group (BHG) surveyed small (>999 employees), mid-sized (1,000-9,999 employees), and large companies (10,000+ employees). Budgets ranged from $25,000 (small) to $500,000 (mid) to $1,000,000 (large) in size.
Here’s where things get interesting.
When BHG looked at the people that received the bulk of the training dollars, they discovered the following*:
- Just over 50% of companies spend $1,000+ per learner on senior management positions.
- 35.5% of businesses invested between $500-$999 per learner on mid-level managers.
- 30.5% of businesses spent between $100-$499 per learner on supervisors.
If we keep with the assumption that the budget is the budget, then the question is; are you spending your budget on the right people?
A current deficit of needed leadership skills is a problem; a gap between current leadership bench strength and future leadership demands is a serious liability. ~ Center for Creative Leadership
Documented in the Center for Creative Leadership‘s 2015 study is the existence of a leadership gap. Basically, a gap exists between senior leaders and a company’s pipeline to the next line-up of senior leaders. Given this phenomenon, what might happen to the leadership gap if organizations shift a greater proportion of training dollars to mid-level managers and supervisors?
Most companies spend more on senior leaders expecting them to coach downward. Unfortunately, the idea of a coaching culture is relatively new. The necessary shift to embed coaching and teaching as a core value throughout an organization takes a monumental effort and can’t be accomplished by providing training only to senior leaders.
You might be interested in the following post. 4 out of 6 Reasons Your Employees Don’t Perform.
Harvard Business Review, in their article, Why do we Spend so much Developing Senior Leaders and so Little Training New Managers? offers three key factors for the imbalance.
- The people who control the budgets are themselves, senior leaders. Their concerns are most top of mind.
- It’s “sexier” to develop leadership skills than management skills. There is more sizzle in leadership training, but is that the greatest need in your organization?
- It’s where the money, influence, and intellectual horsepower reside. Naturally, the most-sophisticated suppliers gravitate there.” I had to quote this one directly from the article. I couldn’t have said it better than author Victor Lipman.
If these factors hold true, then the money spent per learner on senior leadership may not be the most effective place to spend them, but the most convenient.
Who’s directing where you spend your training dollars, and just as importantly, on whom you spend them?
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* Data summarized from 2016 How are you utilizing learning analytics? webinar.