How do you communicate and justify your training and development budget to your stakeholders?

What data you present will vary based upon the audience. CFO's might need to see benchmarks on L&D spend per employee compared to the industry peers, while CHRO's might want to see % of Center of Expertise dollars that go to L&D and compare that with best practices. Employees might need to know that their org invests more than average in key areas that impact their perception of career advancement and growth support. It is helpful to consider what their going in perspective might be on the amount spent and what your goal is in terms of what conclusion you want them to have. If, for instance, you think the CFO believes the org spends too much on L&D and your goal is to increase spending, develop the reporting and agenda accordingly.

Training as a fundamental tool for enabling business expectations: to provide value to the customers. Customer is evolving and consequently Business has to evolve: such evolution requires new and specific competencies. Using such paradigma it’s not difficult to evidence to stakeholders that if they wants to increase their profits they need continuously to sustain training development with specific budget. Training development has to be factual and ad hoc so it’s fundamental that it’s designed by the relevant business function within the company: only them knows which skills and competencies are required to enabling business expectations.

A key issue is to agree on how does success look like? How does this training impact the business? What variables? What are participants doing better/knowing better/feeling better about after the intervention?

The credibility of the T&D team's relationships with these stakeholders will also be important. How they connect with them when it's not budget time will help them create a plan that can be positioned well because there is genuine connection with their needs So the plans reflect different department perspectives.

Actually, I disagree with the premise. Yes, alignment is needed — but, it’s not with the L&D department’s objectives, but, with the organization’s vision! HR and Training Departments must recognize that they’re service functions (they don’t exist without an organization to support). Hence, they’re customers are the functional areas that comprise the enterprise. A solid training budget, one that will gain traction most always, is the one that aligns with, and enables, those functional area “customers” to achieve THEIR objectives.

L&D credibility is gained and maintained through scrupulous research, utilizing true subject matter experts, and refusing fall into the trap of style over substance. Engaging, interactive learning is important, but if the content is light, speciously sourced, or represents a point of view more than it does points of fact, your training will ultimately fail your students. And that's not acceptable to any L&D professional.

In my experience in the roofing industry, utilizing evidence and data-driven insights is key. For example, leveraging surveys, assessments, and industry benchmarks helps identify our workforce's specific skills and knowledge gaps. It's important to show how T&D initiatives directly contribute to improved performance, enhanced safety practices, and increased employee engagement and retention. By quantifying the benefits – such as reduced accident rates, higher project efficiency, or better customer satisfaction – we can present a compelling case that our T&D investments yield measurable, valuable returns for the organization. This approach transforms the T&D budget from a cost to a strategic investment in our company's future.

A comprehensive approach will be to use the scopes within four-level framework for evaluating the effectiveness of training programs. This will lessen the likelihood of a piece meal justification of training and development budget, such as only using ROI or first level evaluation form only. For example, sources of information from document review of past results at each level can help to support the budget.

Determining the right level of transparency will be based on trust and the strength of the relationship. If the relationship is immature and trust is low, be prepared to have specific details. However, more important is explaining the why behind those details. And, when you explain the why, make sure you're personalizing it to the audience. Don't explain why in a way that's convincing to you. You need to be able to explain it in a way that resonates with what they care about. Over time, you'll build the kind of trust that gives you more flexibility and autonomy. However, you must always be prepared to explain the what and the why.

This is an absolutely critical element of success for L&D/T&D budget planning. Involving stakeholders in the T&D budgeting process is a crucial step in ensuring the success of any initiative. In my experience, it's about more than just getting buy-in; it's about creating a shared vision for the future of the organization. This has been true as an internal manager as well as a external learning partner responsible for 6 and 7-figure budgets. By actively seeking feedback, validation, and collaboration, you can ensure that T&D initiatives are not only effective but also aligned with the broader strategic goals of the organization. This is how to turn the T&D budget from a cost center into a value driver!

Our training and development budget is an essential part of our operational strategy. It provides the resources needed to create a productive and engaged workforce that can help us achieve our organizational goals. We communicate this to stakeholders by providing detailed reports on how our training and development budget will be utilized, including any potential cost savings or improvements in productivity. We also explain the importance of investing in the long-term success of the organization through employee growth and development.