Leaders, it’s time to budget for 2021 and today I’m here to say: Don’t cut your professional development budget!
I know it can be tempting, or even seem reasonable, to make cuts here. We’re approaching the recovery phase of COVID-19 and many teams are focused on how to resume “normalcy” (which is something we’ll talk about another day).
2020 may not have been your company’s best year. You may be tasked with cutting costs in your budget to help make up for that.
You may have even been told that the professional development budget can be cut by the leadership of your company (but they’re wrong!).
Finally, you may not even be sure how much to budget for professional development. Don’t worry, it’s ok! Many leaders don’t really have a set formula, and that uncertainty and ambiguity is one of the biggest reasons leaders simply cut back in this area.
Despite the uncertainty, I’ll say it again: don’t cut your professional development budget!
I’ve got 3 tips to share with you today:
- How professional development for your individual team members actually benefits your team communication strategies.
- My secret tool: how to determine what training is best for each person and how to connect individuals’ development needs to the goals of the entire organization (hint: when your boss asks you why you didn’t cut professional development, this will be the case you make to justify it!).
- A quick method to determine how much to budget for professional development for each person, based on 1 simple number and how much they directly contribute to your company’s bottom line.
Ultimately, it’s on you as a leader to recognize that professional development for each person brings benefit to your entire team. It will also help your team communication strategies and your overall success. A great leader knows you don’t cut your professional development budget. You refine it and put it to work for you!
Check out the video below for my thoughts on professional development and its benefits!
You can also scroll down to listen to this video as a podcast, or read the transcript instead.
Now, let’s talk professional development budgets and how you’re going to rock budgeting this year!
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I see you, leader, it’s budget time, and you’re wondering how much to budget for professional development in 2021 and beyond. You are not going to want to cut any of that professional development budget. And in fact, I’m gonna make the case for why you need to add even more in the face of uncertainty.
It’s Stefanie Krievins, the founder of the Pro Troublemaker Nation, where I share tips and encouragement so you can fix your hot messes. And today, I’m talking about how much to budget for professional development, even in the face of the uncertainty of the disaster recovery from COVID-19.
Here’s the reality. With the hot mess that we got coming up, that we gotta still figure out and pivot our businesses through, you are going to need even stronger team communication strategies. That probably means you need to bring in external resources to help your people or send them to pieces of training. That needs to be in your budget.
The second reason you need to ramp up your professional development budget for your people is that I’m gonna give you the one secret tool that I think clears up a lot of confusion as to what you’re actually investing in. And that secret tool is the individual development plan.
A lot of managers don’t want to spend money on professional development because they don’t understand the ROI of it. The individual development plan is how you do that. That’s how you create clarity.
So what you do is you take that IDP, you connect the individual’s goals to the department’s goals. You use the strategic plan to connect the department’s goals to the entire organization’s goals. That’s how you create alignment and clarity as to what that person needs to be focused on.
Too many folks think of the IDP as a punitive or corrective tool. It’s not. It should capture each person’s learning and development goals every single year to then justify and make the case for why you need specific professional development for that employee.
And then in terms of how much to budget for professional development, the rule is 5% to 10% of that person’s salary. And the more direct impact they have on your company’s bottom line, you need to ramp that up closer to 10% and even go beyond 10%, because the impact of those dollars is gonna be even greater with a more effective results-oriented employee.
The third reason you need to ramp up your professional development budget for next year is that every season successful business owner knows you cannot cut your way to the bottom. You cannot cut expenses as a way to grow revenue.
Doing more with less does not work. We prove that through and after the 2008 recession, let’s not repeat that.
Friends, those are my tips for how to budget for professional development. Wherever you’re watching, I would love to hear your stories about your budgeting process, how you think about professional development for your team, how you use that to increase your team communication strategies.
And now let’s get off the internet. Let’s be hot mess fixers that get the most important work done, and I’ll see you soon my friend.