My last post discussed why learning and development (L&D) should be a budget priority: it is easier to nudge a spinning wheel than to start from zero. In the end, headquarters agreed but still wanted cuts. So to match the 10% workforce reduction, I took a 10% reduction in student load, and absorbed the cuts across my various learning programs.
Still, I kept 90% of my annual budget under threat of deeper cuts. My argument started like this. For an organization with an annual budget of $10 billion US, my L&D team had a budget of $5 million US (with roughly $4 million of that sunk salary cost and $1 million operating cost).
“Would you be willing to bet that spending half of a tenth of one percent in developing the workforce will return at least that amount in productivity over the course of a year?”
Headquarters reluctantly agreed: it was probably a good bet. Looked at another way, my $5 million budget supported a 50,000-person workforce. I said,
“Do you think betting $100 per person on their L&D will return at least $100 as productivity (or just good will) per person?”
Of course – that’s less than nine dollars per month, or 30 cents per day!
When defending your L&D budget, I suggest a similar approach. Get the best numbers you can about organizational budget, the amount directed at L&D, and the size of your workforce. Then do the math, and if possible frame the results as a good bet.
And now, let me know what the answer looks like for your organization!
(My book West By Sea is 20% off in August with discount code. Enjoy!)