6 Best Practices to L&D Budgeting in the New Normal

Cipla ropes in Ratna Joshi as Global Head - Talent Management from M&M Ltd
Prior to this, Ratna was working with M&M Ltd as Head of Learning & Development, Mahindra & Mahindra, Automotive & Farm Equipment Sectors for more than 10 years serving in various roles.

6 Best Practices to L&D Budgeting in the New Normal

Organisations that fuel a culture of continuous learning and development are often considered more resilient and responsive from within. In a world driven by paradigm shifts and disruptive trends, the readiness of organisations to pivot nimbly comes from the ability to drive “dual transformation” which is about ‘managing the core” superbly and equally being adept at “repositioning the present” and “creating the future”. It is indeed true that organisations make choices with respect to focus areas that allow them to excel/ differentiate and be ahead of their industry peers.

“This has been seen to be better for organisations with a strong foundation of L&D – process, execution, and allied budgetary allocations. However, with disruptions as the new normal, the L&D budgets are getting disrupted too.”

In the near term, it is an outcome of the covid related impact of work going remote, possible hybrid working in the future, work/life boundaries getting blurred, severe the covid related strain on businesses/financials and technological advancements leading to higher expectations from leaders w.r.t L&D as a product & service delivered to them.

The L&D budget, which simply put is an amalgamation of all the direct & indirect costs associated with designing, delivering, evaluating and sustaining learning & developmental efforts in an organisation, is getting disrupted and we are witnessing a wide range of conversations around L&D budgets, right from complete suspension to sustaining it need-based to optimisations to maintaining the erstwhile status unchanged. Described below are the Six Mantras or Best practices which most businesses and L&D professionals can adopt for effective & efficient learning delivery in the New Normal.

Saving in Short-Term Vs Results in Long-Term

Disruptive events, Paradigm shifts, changing trends, intensity of competitive pressure, etc are now not just a part of business lingo but as much a part of what executives have to deal with it. More often than others, when such challenges impact volumes, revenues, shares, contribution margins, etc, organisations tend to cut back sharply on the fixed costs. The axe falls largely on discretionary ones like L&D, which are perceived to have low impact on short to medium term on organisation success.While in a knee-jerk reaction to curtail fixed costs, businesses might end up suspending L&D budgets, organisations and leaders should also bear in mind the long-term and wide-reaching impact it might create.

While the numbers might look better, the long term impact and the ripple effect it may cause in terms of driving sales or customer experience, employee engagement, productivity and level of managerial supervision, also need to be factored back in monetary terms clearly. A balanced view to L&D budgets, might help organisations handle the motivation & business outcomes better and not enter a red zone in the long term, demanding possibly even higher investments.

Challenging Times Bring in the Best

Challenging times provide for rethinking – revisiting many business assumptions. It also is a time to pivot to new models, options, and for employees to shift to new orbits with pace and often at scale. Given the need to justify the L&D spends even more in times like these, the L&D and business can actually spend a good time defining tighter & sharper L&D goals with a clear linkage to business objectives.

This in a way also enhances the much-needed leadership’s commitment to the L&D agenda. The L&D budgets can then be deployed only to specific focus areas. The fact that an adult learner too commits to learning agendas with clear relevance, it’s actually, a sweet spot of business linked L&D objectives and learner commitment. The challenges posed by the New Normal can actually end up benefiting business, L&D as well as learners by creating a multiplier effect through L&D spends.

Partnerships with Internal SMEs

In times good or tough, learning organisations have successfully created a culture wherein internal resources drive retraining, reskilling, and upskilling programs, benefiting both learners and trainers. This lifts all the boats by allowing a better linkage to business context enhanced transfer of learning and also build trainer’s leadership skills by responding to difficult questions, etc. In the New normal, the internal pool of resources – designers, trainers, functional experts, SMEs, coaches, and certificate holders can be strategically and systematically leveraged to blend the external trainers and resources.

The pool of internal resources can be further invested upon as a clear bucket under the L&D budgets. L&D investments along with adequate and innovative recognition to the internal SMEs for contributing to the learning agenda of the organisation is bound to have a spiraling effect on their commitment and motivation levels as well.

Win-Win Collaboration with the External World

The current Covid period has shown that collaborative possibilities abound – the proliferation of webinars has provided an opportunity to test who is the best in the business to work with. With a higher supply of professionals willing to contribute digitally the cost and possibility to negotiate help foster a win-win collaborative model. There cannot be a better time, to renew relationships, explore inter-company, inter-sector partnerships, and arrive at formats to deliver right inputs to the learners.

The resources already invested upon or content already available can re-deployed and cross-pollinated for higher returns on the L&D spends. The external partners and internal L&D can work collaboratively to support and complement each other across the learning value chain – from in-sighting to designing to evaluating stages towards best-in-class ROI on L&D budgets.

Optimising Learning Delivery Opportunities

Basis the business-specific needs derived in point 2 above and mapped to delivery through existing or new resources as refereed in points 3 & 4 above, the next step is to map it on a time horizon and organize for groups or cohorts which can leverage the common topics together as far as knowledge/ concept dissemination is concerned.

The cohort-level dissemination can be well – supported by byte-sized practice elements, reflection pointers, toolkits which learners can leverage basis his /her style at his or her pace for effective transfer of learning. The relevant collaborative external forums can be leveraged effectively with advance planning, group discounts availed without diluting the essence of the learning need delivery.

Learner’s Commitment & Communication

Last but not least, there can be organisational specific methods to garner commitment and relevant consequence management measure, in place (gelling well with the larger organisational culture and context), if a learner fails to leverage the paid program or certification or the journey which he or she was nominated to. The advance and relevant communication and ways and means of soliciting confirmation from learners is the first critical step to ensure the learner does not miss the opportunity extended. In select situations, learners can also be encouraged to share back the learnings and experience for wider leverage by many more.

A continuously learning organisation helps foster a culture of meritocracy and outperformance. Leadership commitment is fundamental to L&D and the need to create a process where business leaders can involve themselves in the progress of top talent in particular. This can provide two-way facilitation for the continuous improvement of the L&D process and the ones who partake. The impact of L&D on TM is another facet that the best in class has successfully delivered.


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