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Elements of a Good Training Budget
by Arron Baxter - Saturday, 26 September 2015, 12:00 PM
 

According to the Training Industry Report, the nationwide training expenditure was $52.8 billion in 2010, with an average of $1,041 spent per learner. Small companies reported an average training budget of $234,850. Your training budget is important because it is an investment in your organization; training expenditures have been positively correlated with employee retention, customer retention, sales and overall profitability. In the United States training averages between 2 and 2.5 percent of a company's budget, though some businesses spend as much as 3 percent. Your training budget needs to be established based on your specific business's training needs.

 

Planning a Comprehensive Training Budget

The Society for Human Resource Management recommends that a training budget include the costs for training staff salaries, appropriate learning facilities, training materials, hardware and the cost of outside consultants. Businesses may find it more effective to outsource certain training needs to vendors or benefit from advances in learning technologies to reduce training costs. It is important that the training budget adequately covers the realistic costs associated with the training methods your business employs.

Budgeting for Training Needs

Assess the training needs of your business before you begin planning your budget. Businesses may initially need to spend money on discovering or researching which skill deficit is hindering productivity and performance. The true training need may be overlooked if care is not taken to identify it. Ask for feedback on training needs from all stakeholders. A good training budget is designed to address the real issues by spending money on the actual needs of the business and its employees.

Prioritizing Training Needs

Prioritize the training needs within your company. Address those that are both important and urgent first. According to the 2005 State of the Industry Report from the American Society for Training and Development, industry- or profession-specific training has been the highest priority of organizations. Other high-priority training topics include compliance training, business procedures, supervision skills and technical skills. Determine your company's priorities by conducting a needs analysis, researching those needs identified by stakeholders such as customers, employees and supervisors.

Part of an article by Sara Mahuron