Return to blog home

February 9, 2021

3 tips to improve your continuous training budget

Managing people and managing numbers are opposite concepts.

When the time comes to allocate a budget for continuous training activities, no wonder why the task is difficult!

The perceived value of talent development is different from one department to another in the same company. For human resources, it’s an organizational necessity, for marketing, it’s an investment in the brand, and for finances, it’s an expense.

To convince management to invest in continuous training, it is, therefore, necessary to know how to prepare a strong budget and speech!

We had the chance to receive Pascal Parent, CFO at Qohash, to give us his best advice. In an interview, he took the time to answer the following questions:

  • How to establish a credible budget for a department?
  • What key factor should our budget be based on?
  • How much should I budget for continuous training?
  • What are the mistakes to avoid in the preparation of a budget?

Here are 3 tips from Pascal to improve your continuous training budget.

1. Take the organizational reality into account

When establishing the training schedule for your various employees, take the organizational reality into account.

As in any business, there are holiday periods and stronger or busy seasons. At these key times, it is important that all resources are available for replacements and to meet demand.

So that is not the time to plan training for your teams!

Rather, use off-peak times of each department to determine the professional development schedule.

2. Know the different budget envelopes

The costs incurred for salaries, room location and your LMS do not always come from the same budget envelope!

To better understand which expenses fall under which part of the budget, seek help from the finances responsible. Together, you can establish the best way to prepare your budget while respecting the financial structure of the company.

No more budget requests with a hard-to-justify total amount!

Use these categories to explain how the money is used, but also to track spending over the ongoing year.

3. Understand the complexity of preparing a budget

It's a myth that anyone can easily make a departmental budget that holds up!

There are several methods of budgeting that can make the task more or less complex. Pascal Parent explained to us that there are 2 major axes that can be taken into consideration.

First up is the level of complexity we’re ready to assume. 

On the lower side of this scale, you could simply take last year’s budget and adjust to the current situation. You could maybe, for example, add 5% to the amount and roll with it.

On the higher level of complexity, you would probably want to start from scratch every year! That means you’ll have to interview each of your managers and analyze a lot of data before making any decision.

Truth is, neither of these will be 100% realistic, so it depends on your level of agility and adaptability.

The other axe would be the direction of the decision making.

In a top-down business model, the budget comes from the board of directors. In a bottom-up case, the managers of each department ask for the budget that they need.

The most efficient strategy might be a hybrid solution, where managers ask for budgets and the board gives the final call.

Nonetheless, you should always be analyzing and measuring your expenses throughout the year to make sure you’re still on track. You’ll also have better data to start from the following year!

Presenting your budget to the decision-makers

Let’s face it: preparing your budget is only part of the actual task.

Presenting your continuous training budget can be hard depending on the openness of the people in charge of making the final decisions.

For businesses that value growth and human experience, it will be much easier to convince investing in the training of your staff.

On the other hand, for businesses that are stable and are not seeking expansion, it might be harder to prove your points.

To put all chances on your side, make sure your expenses are in line with the vision, mission, values and culture of your organization!

In both cases, it’s up to you to understand and explain the return on investment of your department’s expenses. With the right words and a clear vision, you might be able to get what you want.

Other articles of interest to you

Also, use our Training Budget Optimization Calculator to calculate your current expenses and see how much you could save with an LMS!

Marie-Hélène Couette

Marie-Hélène Couette is Digital Strategist and marketing manager at Didacte. She is also very passionate about entrepreneurship and human development. She creates all the educational content for our clients, both for HR and for training sales.