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Budgeting for Employee Training

Guest post by: Louis Trahan

Article Overview: The issue of employee training is a contentious one, especially when it comes to budgeting. How much is too much in terms of allocating funds to training staff? Is it an investment or a redundant expense? It seems that business owners around the world are divided on the issue.

Budgeting for Employee Training

The issue of employee training is a contentious one, especially when it comes to budgeting. How much is too much in terms of allocating funds to training staff? Is it an investment or a redundant expense? It seems that business owners around the world are divided on the issue.

Stresses and Concerns.

There are a number of factors that can influence how much of a company’s budget is allocated to corporate training. Amongst the top concerns is the notion that employees will receive corporate training and abruptly leave the company for greener pastures, thus leaving no return on the investment. Other concerns are related to the volatility of staff.
These concerns should never be used to rationalize the lack of a training program. Instead, incentives should be utilized to make training more attractive to employees and to retain staff. Training is an integral part of corporate growth and should never be undercut due to primal fears.

Looking at the Numbers.

It can be informative to inspect statistics to study the significance of employee training. According to The Conference Board of Canada, Canadian businesses are spending an average of $850 per annum per employee on training. This amount is considered to be lower than most countries in the industrialized world, including the United States.
It turns out that Canadians are spending about 17% less on training than their counterparts were a decade ago. This may occur because employers are succumbing more to the aforementioned stresses and concerns and less to the needs and requirements of a thriving business.

The Importance of Training.

Despite employers spending less money on training and development, most agree that it is still of considerable importance. In fact, 86% of small business owners in Canada view training as highly important. This suggests a discrepancy in the desires and in the output of today’s companies. If training is considered to be so highly important, why don’t more businesses provide financing for it?

The answer to this is likely a combination of the pervasive stresses and concerns and the rising costs of training. Hiring a training company can be greatly expensive and uncertain, as there is no reliable way to determine results. Nevertheless, employee training remains a core focus of most businesses and an elusive prospect in many more.

Sources:
Conference Board: http://www.newswire.ca/en/releases/archive/May2007/01/c3343.html
Ipsos-Reid: http://www.microsoft.com/canada/media/releases/2006_09_12.mspx

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Article Tags: employee training, training budgets



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Re: Budgeting Approach - Budgeting plays a vital role in any business. I totally agree with Ringo what he said and how they had planned to invest and continue with their business. The information you share over here is nice peter. Small entrepreneur will get a great help from your provided information.
Post subject: It's Not Personal, just business - I so agree! Actually, the business world as we know it IS in trouble. I heard some stats last week that they expect by the time 2050 that 70% of workers will be freelancers. Employee/Executive Bullying won't be able to stand it when it could be easier for someone to simply contract with the nicer guy (or gal). I, for one, will be choosing the nicer ones!
Re: Budgeting Approach - [quote="baconmarius":252nopeg]Budgeting plays a vital role in any business. I totally agree with Ringo what he said and how they had planned to invest and continue with their business. The information you share over here is nice peter. Small entrepreneur will get a great help from your provided information.[/quote:252nopeg] Good points. Also, there's no successful business without a settled budget for this and that so you really have to mange the money inside the pocket, the assets/investments as well as the liquid ones so you'll always have something to grab the moment you need it the most.
Budget. - I believe the biggest barrier is related to budget. Training tends to be a normal practice for a big company. But I have to consider it seriously as an entrepreneur.


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