Training budgets: Don’t cut back on training, cut out the inefficiencies

With training budgets under more pressure than the San Andreas Fault, learning and development (L&D) managers must look for savings wherever they can find them without compromising quality. Kevin Lovell says working harder isn’t the answer – addressing four key areas is.

Hard-pressed L&D teams face a tough dilemma. On one hand, they have to deliver the learning, but at the same time many are being asked to make significant cost reductions.

You can’t cut 30% off your learning costs simply by working harder. However, I’ve written a white paper  – Are You Cutting It?: How to reduce your cost of learning by 30% – that highlights that L&D teams can make this level of saving by looking closely at four areas of potential inefficiency: supplier management, administration, scheduling and solution design.

A typical breakdown of learning costs, excluding delegates’ salaries and travel expenses, would be: 5% on L&D management 10% on consultancy, needs analysis, learning design and development 25% on L&D administration 20% on learning delivery (internal resources) and 40% on learning delivery (external, third-party costs).

Taking supplier management, administration, scheduling and solution design in turn, let’s see how we might cut these costs by 30%. These numbers are based on our experience of working with and delivering training for L&D teams.

As much as 7% of your supplier costs can be saved by improving your supplier management. Creating a preferred supplier list for all external training minimises the number of supplier relationships you have to manage and it maximises the potential for discounts. After negotiating the best deals, it is important to ensure that everyone uses only those suppliers.

Training administration is the bugbear of L&D. Many organisations still process large volumes of course bookings and post-course evaluations manually. This repetitive and labour-intensive work often swallows up huge amounts of resource.

Automation can dramatically increase efficiency and lead to substantial cost reductions. By using specialist technology to automate the booking, authorisation and post-course evaluation of training, you can cut your L&D administration costs by around 30%, which equates to a 7.5% reduction in the overall cost of learning.

What about scheduling? Our experience is that a focus on efficiency by the admin team will yield significant savings of around 12% of the overall cost. Specifically, the key areas are: an insistence on higher fill rates formal six or 12-monthly planning to assess the expected future demand for training and a disciplined approach that reduces last-minute changes to training. The ability to react to short-term changes is a virtue but we can lose sight of how much constant flexibility costs.

Finally, think about solution design. You can save another 9.5% by redesigning your learning solutions. The relevance and effectiveness of training interventions should be reviewed every two years, as the needs of the business will change – as, for that matter, do learning delivery methods. Perhaps classroom-based courses can be redesigned and delivered using blended learning?

The obvious place to look when making learning budget cuts is external supplier costs. However, greater reductions are possible through ‘intelligent’ scheduling and solution design. A 30% cut in learning costs may sound extreme, but you’d be surprised how often it can be achieved.

Kevin Lovell is learning strategy director at KnowledgePool

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