A survey done by Skillsoft and ETHR World indicate that40% of the Organisations surveyed saw an increase in their L&D budget over the previous year. Is your Organisations one of them?

Why should you bother increasing the capability building budget for your Organisation?

Organisations are increasingly realising that skill is the new currency. Hence, capability building continues to remain an important strategic focus for Organisations, more so today than ever before. The ever evolving customer demands, competitive edge, importance of Organisational culture are some of the determining factors for focus on continued capability building focus for Organisations.

Where should Organisations build capabilities?

Depending upon their vision and strategic priorities the Organisations decide to spread their learning or capability building resources amongst – (i) Frontline employees for Onboarding & domain capabilities; (ii) First time & middle level managers; (iii) Emerging Leaders; (iv) Senior and executive Leadership and (v) Organisation capabilities.

So how much spend is too much spend (or too little)?

Many Organisations from across the globe with different employee count, sectors and revenue participate in Chief Learning Officer’s LearningElite program. The compilation of these  participating Organisations give some direction on how much they spend annually on capability building with their Organisations. The participating Organisations have a revenue range of less than $ 1 billion and to greater than $ 50 billion. The L&D budgets ranged from $5 million to $100 millions for these Organisations.

The range of learner count is less than 10k to more than 250k. The range of per learner spend is from less than $500 to greater than $2000. Organisations spending $1000 – $2000 has seen a 16% jump in 2021 as against 2020.

20% of these Organisations have outsourced the significant part of L&D activities. 35% Organisations reported that they saved costs by outsourcing learning activities.

Why are Organisations spending on capability building?

For one simple but important reason. They are getting value out of that investment. 72% of the participating Organisations reported an increase in sales or revenue with specific attributions to capability building engagements by the Organisation. 74% Organisations attributed capability building engagements to reduced attrition and increased ability to retain essential employees.

These are many other reasons are helping leaders to tangibly understand the impact of capability building on business and hence their continued commitment to capability building agenda.