A year in L&D – budgets still constrained, but attitudes improving
At the beginning of 2014, we conducted our L&D survey for the first time, asking L&D decision-makers and influencers across multiple industries about their L&D spend, priorities and challenges. The results were eye-opening.
We found that the biggest constraint for those individuals was a lack of budget. The statistics did suggest, however, that L&D budgets were in a better place than in 2013, and no longer plummeting as they had done in previous years, with 29% saying they expected an increase in budget for 2014 and 50% saying they expected their budget to stay the same.
Management and leadership was the top focus area in terms of capability, closely followed by personal development and IT. In terms of employee type, supervisors and middle managers were the clear priority when it came to training (72% chose this), which suggests that concerns about management and leadership skills gaps are not about the leaders already in place.
The 2015 results
We decided to undertake the same survey in 2015 because we wanted to find out how the L&D landscape had shifted in the space of a year. We asked 177 L&D influencers – from HR to L&D professionals – the same questions we asked in 2014, including what their budgets are, where their budgets are likely to be heading, and what their priorities and challenges are when it comes to delivering learning.
The respondents came from a wide range of industries and organisations, as we wanted to get a balanced view of the L&D landscape as a whole. It was another really interesting set of results, and we have collated some of the key findings below.
Budget constraint still an issue
Perhaps one of the most alarming findings was that, while 47% of respondents said they expect their L&D budget to stay the same this year, and 27% expect it to increase, 26% said they are actually expecting a decrease in their L&D budget. Given that only 14% expected a decrease this time last year, this suggests, worryingly, that budgets are actually moving in the wrong direction for some organisations.
There could be a number of explanations for this drop. We know from the CIPD’s research in 2014, for example, that organisations increasingly want to see a tangible return from the learning they invest in. But many L&D providers still struggle when it comes to proving ROI and impact, which could be causing companies to be cautious with their spend. Another potential explanation could be the rise of the more ‘organic’ or culturally imbedded learning solutions. Creating a strong learning or coaching culture within your business, for example, can have a powerful impact without a huge financial investment.
Middle management gets the focus
While supervisors and middle managers were still picked as the top focus area for training, the same as last year, the percentage of people who chose this option was significantly lower (only 49% VS last year’s 72%), and sales staff experienced a similar drop, from 41% last year to only 26% this year.
The focus on top management also dropped, from 30% to 19%, which could mean companies are spending more time and money on developing middle managers into future leaders, rather than investing in those already in leadership positions. One potential reason for this could be cost – top management development is generally more expensive, so it can be more economical (not to mention better from an employer branding and employee engagement point of view) to develop talent further down the career ladder.
Management and leadership still a priority, but project management is on the rise
Management and leadership is still the top focus area in terms of capability, and this makes sense when viewed alongside some of the other research we have seen in recent months. In the infographic we created last October titled ‘How to be the ultimate leader,’ we discussed the fact that only 36% of businesses feel prepared to fill leadership positions, and 60% report a shortage in leadership talent, so clearly this is still a concern for many organisations.
Management and leadership was closely followed by personal development, although the percentage of people who selected these capability areas (43% and 42% respectively), dropped significantly against the previous year. Sales and marketing also experienced a big drop, with only 17% of respondents choosing it against last year’s 28%, which, when you view it alongside the figures for training sales staff mentioned above, suggests that organisations are putting much less prominence on developing their overall sales capability than they were last year. IT and computing stayed roughly the same with 33%, suggesting this core capability is still, and will continue to be, highly valued.
Project and risk management, however, saw a significant increase, with a quarter of respondents saying this would be their top focus area for 2015 (up from a fifth in 2014), a figure which could, in part, be contributed to by the increasing appetite for properly trained project planners.
Productivity and retention still top goals
The goals for L&D have not changed much since last year, with the top two coming out the same. Increased productivity was top of the list with 54%, and employee retention came out second with 53%. Similarly to last year, they were closely followed by employee engagement at 41%.
It is no surprise that employee engagement continues to be picked along with productivity and retention – there is an increasing amount of research showing a causal link between high levels of employee engagement and productive staff who want to stay with the business. We would therefore expect this to appear high on the list as long as productivity and retention are seen as top priorities.
Limited budget still a challenge, but attitudes towards learning are improving
As mentioned above, budgets are, for the most part, staying the same, with only a quarter expecting an increase this year. This suggests that limited budget is still a barrier for many L&D owners, and our figures seem to support that. 52% of respondents cited budget constraints as their main challenge or frustration, a 5% increase on last year, with access to staff and organisational behaviour toward L&D coming out as the second and third biggest hurdles.
The good news, however, is that, while access to staff and organisational behaviour came out high on the list, they both dropped significantly when compared to 2014’s results, with access to staff dropping from 41% to 32%, and organisational behaviour towards L&D dropping from 40% to 28%. These figures suggest that attitudes towards learning are really shifting in the right direction, and hopefully we will see that have a knock-on effect on the budget constraint issue in future as organisations increasingly see the value in learning investment.
Some positive changes on the horizon
The most striking thing about this year’s results is how similar they are to last year’s in places. A great deal can change in the space of a year, but it seems that, for many organisations, the priorities, goals and challenges when it comes to investing in and delivering learning are, by and large, the same.
We have, however, seen some very positive changes. The fact that organisational behaviour towards L&D is moving in the right direction is a positive, and could have a real impact on the way in which, and the extent to which, business invest in learning in future. We have also seen that getting access to staff for learning in improving, which means line managers are clearly seeing more value in sending their staff on learning interventions than in previous years. This could also be due to the increasing quality of the learning interventions we are seeing, which tend to be more about experience and relating it back to the employee’s job rather than simply putting people in classrooms. If managers can see a real, tangible link between the learning and the employee’s role, they are more likely to approve.
Overall the results show a promising insight into the L&D landscape for the coming year. Based on these results, we would expect to see a continuing focus on creating a robust leadership talent pipeline, with IT and project management continuing to be key areas too. If the positive trend around organisational behaviour towards learning continues, we would expect this to open up an increasing number of opportunities for impactful learning, and if attitudes improve enough to have a positive effect on the budget constraint issue, 2016 could potentially be a really exciting year for L&D.
To read the original version of this article, and more like it, download issue 4 of Enhance. If you are looking to increase investment or appreciation of L&D within your organisation, read our information for sceptics and guide to making a business case for L&D.