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Leadership Development & the Budget

Leadership Development & the Budget

As you’re cutting expenses, ask your employees how much they value training and development.

Of course many companies are having a hard time justifying the expense of leadership development. It is routinely considered discretionary, and easily excised from the budget during challenging times.

But I wonder—what would happen if you asked your employees to place a priority on their own development and growth?

One of my largest clients has maintained their commitment to leadership development during this recession by asking their leadership team to pay for our services out of their bonus pool. Really.  Over the past several years, the management team has asked us to work with them consistently, while paying for it from their own bonus checks. Of course we are honored, and of course we deeply respect their commitment.

And, we wonder why there isn’t more of that attitude out there. Leadership development, which can include executive coaching, 360 reviews, quality extended workshop experiences, and basic skill development, is an essential expense – not something “nice to have” when the budget has some fat to burn.  If your leaders improve, everyone improves.

I wonder (and admittedly I’ve never tested this theory) if some employees, given a choice between a pay raise and a substantial employer investment in their personal and professional growth, would be more excited about their employer’s long-term investment in them rather than the extra cash in the pay envelope.  I also wonder what would look best on an offer sheet– $55,000 a year with a $5,000 annual commitment to an employee development program, or $60,000 a year with no development investment? It might surprise all of us to see how many employees would choose the former offer over the latter.

And let’s talk about budgeting. Why shouldn’t training and development be a fixed expense—like the rent or utilities or unemployment insurance? If every company started with an expectation of spending 2-3% of an employee’s annual total costs in training and development, wouldn’t it get us past this uncomfortable dance of HR departments fighting for a few scraps of budget to do the critical work of improving the performance of your workforce?

Employee satisfaction surveys are scary right now. Employees are less happy in the workplace than at any time since such surveys started. They are tired of living moment to moment, waiting for the other shoe to drop. They need to know their employers are still looking long-term, still seeing them as sterling investments, and still willing to put a high priority on helping them grow.

YOUR PATH FORWARD: Don’t make assumptions about the priority of training and development dollars. Survey your employees—ask them what’s most important to them at work. The opportunity to gain experience, expertise, knowledge, and critical skills may come out higher on their list than it does on yours.

About the Author

Jim Hessler
Jim Hessler bootstrapped his way from retail work into a successful career as salesman, sales manager, Fortune 500 executive, and corporate turnaround engineer. Along the way, he developed The Leadership Platform, a proven model for training managers to become sustainably better leaders. It became the basis of his leadership primer, Land On Your Feet, Not On Your Face: A Guild to Building Your Leadership Platform. Jim is the founder of Path Forward Leadership Development Services.

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