Every manager knows that companies operate on strict budgets, and it’s not always easy to gain budgetary approvals from senior management for one type of activity or another. Even when the business case seems fairly obvious—like employee skills development—managers are forced to pull together the right statistics, proof points and analysis to justify the need for training budgets. While the process might differ from other foundational budgetary requests like hiring, marketing, IT infrastructure or product development, it still helps to have your ducks in a row, and your supporting facts and figures straight. Here are a few things to help you build your business case for this mission-critical endeavor.

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1. Quantify Upskilling As an Alternative to Hiring to Bridge the Skills Gap

A recent Forbes report outlines the potential expenses companies face in hiring new workers for technology roles. Recruiting costs can reach $40,000 per hire for high-skilled jobs in fields like data science, where demand has grown 300 percent in the last four years. And that doesn’t take into account the increased salary requirements. What’s more, 60 percent of employers have job openings that stay vacant for 12 weeks or longer, adding to lost productivity. Compare this to the cost of re-skilling existing workers: a Data Scientist Master’s course that teaches core skills like SAS, R, Hadoop, Spark, Apache Kafka and business analytics go for only $1,299. While this is just one example, the data is out there to help you illustrate the cost-comparison for almost any digital or technology need you’ll have.

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2. Show the Benefits of Employee Development

Skills training has been shown to have a positive impact on employee morale and can help improve employee retention over the long haul. 87 percent of employers say improving retention is a critical priority for their organization, which can reduce future costs of backfilling, recruiting and onboarding new employees, as well as lengthening the productivity curve for those roles with new hires. A recent Pew Research study also reported that nearly half of the respondents say employers should bear the brunt of responsibility to make sure workers have the right skills and education they need to succeed. Showing employees that you have a plan for their career advancement is a great way to retain your existing workforce. According to HR and hiring managers, offering internal career mobility can increase employee engagement (49 percent), improve employee productivity (39 percent) and improve employee teamwork (39 percent).

3. Put Your Budget Into Perspective

As noted earlier, the cost of many advanced technology training programs can amount to around $1,000 for a comprehensive online course. But most organizations pay far more for training in general: large organizations (10,000+ employees) spend on average $13 million on training; midsize organizations (1,000-9,999 employees) spend $3.7 million; and small companies (under 1,000) spend $290,000. Multiply it all out and you can get a substantially better return on investment for online upskilling programs, even if you choose to send workers to multiple courses per year.

4. Measure Improved Productivity

If you can figure out how to embed skills acquisition into your company’s DNA, you’ll find that enterprise-wide productivity and competitiveness will grow as well. It turns out that companies that develop a culture of learning for employees are 46 percent more likely to be first to market and 58 percent more prepared to meet future demand. And high-performing learning organizations are 92 percent more likely to innovate. Skills training gives your organization a clear competitive edge, so be sure to include the types of productivity improvement metrics to help support your business case.

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5. Focus on the Right Learning Management Approach

Learning management systems come in all shapes and sizes these days, but the ones that embrace a hybrid “blended learning” approach produce better results. Blended learning—which combines interactive online classrooms, self-paced eLearning, custom-built learning paths, close collaboration with instructors, and real-world projects to teach real-world skills utilization—empowers students (70 percent say they learn best with blended learning) and helps instructors succeed (59 percent report that students are more motivated in blended learning environment). Blended learning also enables another hot topic with managers: employee coaching. Giving advice, mentoring, and delivering feedback are all routine activities to management, but more and more direct reports need to take responsibility for solving problems, taking steps to action, and managing their own careers, and 93 percent of managers feel they need training on how to coach their employees. A learning management system with established learning paths can help provide a framework for coaching discussions.

Building the business case for upskilling and reskilling programs is easier when you have data and analysis at your fingertips. The statistics we share with you here should put you on the right path, but remember to gather your own information to make your justification as compelling as it can be.

About the Author

Stuart RauchStuart Rauch

Stuart Rauch is a 25-year product marketing veteran and president of ContentBox Marketing Inc. He has run marketing organizations at several enterprise software companies, including NetSuite, Oracle, PeopleSoft, EVault and Secure Computing. Stuart is a specialist in content development and brings a unique blend of creativity, linguistic acumen and product knowledge to his clients in the technology space.

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