Five components that will help L&D managers to justify investments
Market studies suggest that despite tight budget monitoring, the outlook for L&D in the coming times remain positive
Five critical components help an L&D manager justify investments - objectives, delivery, capabilities, scale and accountability
While every single business function has come under the cost scanner in the last two years, the organisation’s L&D function speaks a different story. Market studies suggest that despite tight budget monitoring, the outlook for L&D in the coming times remain positive.
Vinay Kumar, Principal Consultant at C2C Consulting, a learning consulting firm, says, “The slowdown has actually impacted the L&D space positively as it has given the chance for organisations to step back and take stock of competencies.” L&D spend across the spectrum of Indian industries continues to grow and handsomely. Most companies intend to invest in L&D this year as a way to engage, attract and retain employees.
While several factors contribute to the increase in L&D spending in the coming years, employers are now focused on training talent for quality. In a series of interviews we conducted with both buyers and providers of training services in India, respondents revealed that hiring and retaining quality talent has become a key priority for organisations.
Piyush Mehta, Senior VP-HR, Genpact, says, “The economy is facing a shortage of talent with quality skills in India and organisations like ours have realised that investing in training is a great way to keep pace with the skill demands of the business.” Genpact is an IT services company. This trend doesn’t hold true only for India, but also globally.
Bersin & Associates released a study in 2011 highlighting that L&D budgets grew by 9.5 per cent year-on-year and the trend will continue in the next two years. The analysis mentions that most companies have realised that they cannot afford to cut down L&D budgets as it has a near-immediate impact on talent contribution.
Companies invest in training to meet various business objectives and some of the key themes that seem to have emerged for this year include engagement, talent retention, leadership development, cross-cultural training and business effectiveness.
Companies are much more focused on tying the L&D agenda with business objectives. Suriesh Nathan, Vice President, Asia-Pacific, at Center for Creative Leadership says, “The last financial crisis has taught companies to spend more strategically and hence L&D programmes are aligned to the core business themes of companies.”
How to know what justifies L&D investments
Several questions arise for an L&D manager while selecting programmes and services that justify investments. One of the key challenges is to balance requirements with key business agendas for the year. Research suggests that before engaging with service providers, the L&D manager needs to have a detailed plan of the following five components:
Objectives from the L&D plan: Includes details of business requirements and talent gaps that drive the business needs for each L&D intervention. For example, the business need for geographical expansion into new global markets might lead to specific global leadership and cultural training programmes.
Training delivery: Documents what kind of trainings should be centralised or decentralised, classroom-based or computer-based, and instructor-led or self-driven.
Capability mapping: Maps existing training capabilities with the needs of the enterprise, thereby highlighting which training programmes to outsource. It also details the budget allocations for all proposed L&D programmes.
Scale of training: Includes detailed plan of the number of participants and participant profiles for proposed programmes.
Accountability: Details the programme champions for each programme, individual responsibilities of programme administrators, and the communication and co-ordination plan with the service provider.
WHILE ASSESSING AN L&D SERVICE PROVIDER
Professional track record
a) What do customer testimonials on independent platforms and social media speak about the depth, experience, and professionalism of the service provider?
b) Does the service provider have experience within the industry as well as diverse pan-industry experience?
a) Does the service provider provide “off-the-shelf” or customised training?
b) What kind of channels does the service provider predominantly offer (instructor-led or computer-based)?
Cost efficiency and flexibility
a) Is the service provider willing to embrace new methodologies and training ideas both from the organisation and from the industry?
b) Is the service provider willing to create favourable pricing structures based on our requirements?
c) Are the training and administrative support costs of the service provider minimum?
a) Does the service provider have a wide network of trainers and L&D professionals?
b) Does the service provider hold memberships with accreditation agencies such as American Society for Training and Development and Indian Society for Training and Development?
a) Are there any case examples available of the service provider having facilitated demonstrable cost savings?
b) Is the service provider willing to understand the alignment of L&D programs with the business objectives?
a) If there was a past relationship, does the L&D service provider have the ability to work against a Service Level Agreement?
b) What were the key reasons for which the service provider was considered in the past?
c) Is there anyone in the organisation who has worked with the service provider in the past?