Determining an IT training budget is a difficult job. Nevertheless, this is a necessary job. A benchmark report that we conducted recently (2017) showed that no fewer than 23% of the responding companies do not make an annual budget per employee available for IT knowledge development.
These are mainly organizations with small or very large IT teams. 36% of companies with fewer than five IT staff have no budget and 33% of teams of more than 50 people. This is in stark contrast to the importance that people say they attach to IT knowledge development.
Moreover, successful companies most often invest more than € 1500 per employee per year on training (18% versus 7% on average). In future-proof companies, this percentage is even 29%.
The available training budgets are usually determined with a manager. This is done annually. You can also see that budgets (in 34% of the cases) are set according to the applicable collective labor agreement. In 14 percent of the organizations individual training budget is determined on the basis of performance (source, Springest).
We recognize the importance of training like no other. Our recent benchmark survey even shows that 29% of companies do not see a future if they do not invest in IT knowledge.
“29% of companies do not see a future if they do not invest in IT knowledge.”
Especially in IT it is crucial to train your people. Fortunately, companies recognize this, as IT is often the beating heart of an organization.
Yet companies are sometimes still reluctant to continuously train their IT staff. “What if we educate them and then leave?Richard Branson once said it aptly: “Train people so well that they can leave, but take care of them so well that they don’t“.
In addition to the salary, of course, training for IT professionals is the most important employment condition. As a result, employees are more satisfied with their work and are more loyal to their employer.
How much training budget do IT staff receive?
Obviously, this question is not easy to answer. For example, the branch and the size of the organization play a decisive role in this.
According to research by Springest (2016), it appears that 53 percent of employees think they would learn more often if they had an individual training budget, while 60 percent of HR professionals indicate that they do not offer individual budgets.
“53 percent of employees think he would learn more often if he had an individual training budget”
The ING Economic Bureau has investigated that the training budget per employee at approximately three-quarters of the organizations amounts to € 1,500 on an annual basis. According to a survey by Statistics London (2017), organizations spend an average of even € 1000 per employee per year.
This may sound like a lot, but when you consider that one classroom training often already goes towards € 2000 to € 2,500, you can imagine that this is often not enough. Fortunately, there are alternatives such as e-learning available, where you often get a lot more for your money than with classroom training.
When one or more classroom training courses are chosen, the available budgets for many organizations and their IT staff are insufficient to adequately equip today’s IT professional with the necessary knowledge and certifications.
This can have disastrous consequences for organizations. If you cannot retrain your IT organization, the risks of downtime, loss of data and additional reputation damage are increasing. Not to mention the costs of repairing this damage. A good knowledge base is essential.
The conditions for a good training budget
Establishing a budget alone is no longer enough. Of course this is a prerequisite for continuous learning, but determining an effective training budget requires more.
1. Training budget is not a cost item
This is already going wrong with many organizations. When it is realized that the training of personnel is not a cost item, but an investment that only yields profit in the long term, this budget will be viewed significantly differently. It is often said that training is an investment, but acting on it is often forgotten.
2. Measure the ROI
IT knowledge development is an investment for 95% of companies, but only 6% measures the ROI (Benchmark Competing on IT knowledge). By measuring the ROI you will find out important questions such as:
- Does the training contribute to the objectives of the organization?
- Does the training contribute to new desired behavior?
- Does learning yield more financially than it costs?
That last question is especially important. How much do you get back for every Pound you invest in training?
3. Draw up a strategy for the coming years
What knowledge is required and how is it developed? Which strategy do you choose at all when it comes to knowledge development? How do you ensure that you remain relevant and leading in a rapidly changing environment. What certifications are needed? How do you ensure that you remain relevant in a rapidly changing environment?
What techniques and knowledge will be needed in the future? Think of emerging technologies such as the Internet of Things (IoT), Blockchain, Cloud technology, Big Data and, for example, Machine Learning.
4. Which tools are you going to invest in to facilitate IT knowledge development?
The budget to be spent will strongly depend on the tools you use to train your people. Do you do this via e-learning or in class? Are you going to use existing LMSs or are you developing one yourself? Do you settle for one course or do you want your employees to learn continuously? These are crucial questions that will be answered differently for every organization.
HR Consultant UK helps you with the above issues
Because we deal with the above issues on a daily basis and can draw on years of knowledge in this area, we are able to help every organization with these questions.
We do not believe that training alone is enough for the success of organizations. We believe in continuous learning, but also realize that not all organizations are ready for this. Wondering if your organization is ready to embrace continuous learning? Then fill in our Quickscan.
Based on research and our many years of experience, we have come to the conclusion that there are three essential drivers for successful and future-proof learning organizations: culture, commitment and capability.
Of course we would like to start a conversation to see where your organization currently stands and where we can help or not.
HR Consultant UK can help if you have any questions about Training budget, how do you deal with this smartly?
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