Does this statement sound familiar: “We’re cutting budgets and unfortunately we need to reduce spend on professional development.” The balance of my professional career has and continues to be focused on helping teams improve productivity, longevity and deliver the right results. For more than 12 years people leaders have told me that their biggest obstacles to training their teams are that they don’t have enough time and dollars. Is this merely a symptom of a bigger challenge? Why is it that seemingly every time budgets are cut, a line item under the microscope is professional development?
In my experience, two primary reasons exist for cuts to professional development budgets. The first reason is that companies are fearful that if they invest in their employees through professional development, they will leave and go to the competition or somewhere else. Secondly, it has been historically difficult for advocates of professional development to demonstrate a return on investment (ROI).
Recent findings from a survey of chief procurement officers by Deloitte and research on professional development shed some light on those myths and support a business case for investing in your people and training them to be the best they can be.
“If we invest in professional development, people will take those skills and go somewhere else…”
Perhaps. The truth is that people will come and go at every organization; this is a reality that will always be the case. No company will ever experience 100% retention of their people. Besides, is that really what you want? The point is, worrying that you will somehow have a mass exodus of top talent as a result of investing in their professional development is unfounded.
In fact, according to a recent study from Udemy, which has been cited in articles on Business Wire, Fortune and other leading publications, 46% of employees cite limited opportunities to learn new skills as the top reason they are bored in their current roles and looking for a change. The survey of 1,000 full-time U.S. employees concludes that boredom isn’t simply a matter of having nothing to do, it has everything to do with a lack of new learning opportunities and professional growth.
The report also found that 44% of respondents cite a lack of learning opportunities as the reason they left their last job and 53% wish their employer paid for professional development and/or skills training. All of this strongly contradicts the notion that employees will leave an organization if their employer invests in their learning and development. On the contrary, a lack of learning and development is actually the cause of people leaving your organization.
There is much more to discuss on this matter, such as the costs involved with replacing an employee who leaves as opposed to investing in professional development, but I’ll leave that for a future post. Just know that the cost of replacing an employee is staggering when compared to investing in learning and development.
How do I demonstrate ROI on learning and development?
Deloitte recently published its “Global Chief Procurement Officer Survey 2018.” Among the findings, 51% of procurement leaders believe that their current teams do not have sufficient levels of skills and capabilities to deliver on their procurement strategy. At the same time, 72% of procurement leaders are spending less than 2% of their budgets on training, an increase from 66% in 2017. Deloitte’s analysis demonstrates that procurement organizations performing at higher levels tend to spend more on training for their teams.
Images courtesy of Deloitte.
Another area of concern in Deloitte’s study found a lack of clear talent development strategy. This includes significant reductions in the use of procurement academies and/or a procurement training curriculum and lower levels of engagement in placements within the rest of the business.
Images courtesy of Deloitte.
These findings show a direct connection to training and high-performing procurement teams. We also know from day-to-day experience that enterprise expectations of procurement functions are increasing. In order to meet these increased demands from the business, it is more imperative than ever for procurement leaders to invest in professional development for themselves and their teams.
Investing in your people is not only a strong retention tool, it is also a critical must-have if your procurement organization wants to meet and exceed expectations. Regardless of budget cuts, professional development is a vital component of executing procurement strategies and delivering on the ever-increasing demands of enterprise leaders.
So, are you investing enough in your team’s professional development? If not, you may find your team falling behind.
Elijah serves as Vice President at SIG (Sourcing Industry Group). He is a transformative leader with over 14-years of business development, managerial, sales and consulting experience. He employs a comprehensive suite of skills and attributes to build relationships with c-suite, executives, middle, and frontline management at Fortune 500 and Global 1000 organizations. These relationships are built on a foundation of trust and supported by consistent and reliable execution of deliverables that result in real, measurable value for clients.