A training budget has great importance for an organization. It can document the return on investment (ROI) that training provides for your company. You can plan for training expenses and examine them for accuracy during the year. Companies can track expenses for each type of training and determine how they can minimize those costs. Travel for training also is an important item to track for accuracy and compliance. Training budgets directly impact your company's bottom line.
Return on Investment
To determine your return on investment, you need to know whether your training courses increase sales, decrease mistakes, or increase customer satisfaction. The answers help you determine if the programs are worth the money invested. With a budget, you can break training expenses down to design and delivery costs. You can then compare the amount of money it took to create and run the program to the results it produced, allowing you to measure whether the investment was worthwhile.
Having a training budget lets you closely monitor all training expenses throughout the year. As classes start and trainees begin taking the courses, you can monitor these expenses to assure they remain in line with the budget. You can more easily control instructor costs, both internal and external, when they are a part of the training budget. Printing and copying costs for training materials are also included in the budget and you can track them as they happen.
Planning for Training and Development
Having a training budget in place, allows for enhanced planning. You can develop training courses and estimate costs for design and delivery. You can compare program costs to the training department budget and decide when to conduct the training course. Leadership can also calculate costs for instructor salaries and compare these to consultant fees to determine the best options for conducting future programs. Knowing costs from the past allows for more accurate planning for training in the future.
Without a budget, training costs are unknown in advance and paid for as they occur. Having a budget, means you can expend training costs throughout the year, reducing their immediate impact. Often, the design and development of a training program can take more than six months. Paying for this over time reduces the impact of the final development costs as you spread them over several months. A training budget greatly reduces the potential for bottom line surprises.