Don't chop ‘L&D’ budgets

  17
   03 Oct 2022
   Sunny Bhasin
   How to build a coaching culture

The raging war in Ukraine maybe out of the daily news coverage, but it is still having an ongoing hyperinflationary impact in most countries. Narendra Modi, the Indian Prime Minister has rightly said that no one will win in this war but everyone will suffer.

As households start to feel the pinch on their monthly expenditure budgets, the sale of fast-moving consumer items takes a dip as consumers become mindful of their consumption and start focusing primarily on their needs rather than their wants.

 

For companies, their operating plans come into question repeatedly and frequently as the target profitability is not achieved and companies are not able to pass on all of the increased cost of materials to its consumers.

 

Most people and companies starts to rationalize their spend basket either by reducing some of the expenses or postponing them for some time.

 

Often, companies end up compromising on the Leadership and Development (L&D) budgets which constitute expenses on up skilling the human capital through training, coaching and the like.

 

Unfortunately, this can have a long-lasting impact on the future earnings potential if it is not done with utmost care. The reason justified for this cut is often cited as the lack of measurement of ROI or return from doing this expense.

 

An intervention like coaching helps in developing effective leadership skills in the high potential candidates who get promoted and paid for managing important roles for an organization.

 

The discussion in forums for ascertaining the cost benefit analysis of these vital spends would be more fruitful if intangible benefits like positive impact on organization culture, employee morale, effectiveness at work, skill building etc. could be measured accurately through numbers,

 

The need is for the HR to start documenting the benefits of an L&D intervention in a tangible way and demonstrate impacts and ROI to avoid the cut on this important cost bucket.

Companies who have been able to avoid this tendency and instead have looked at rationalizing other costs tend to gain multiple folds in the long run.

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