In many businesses we see that ‘people maintenance and development’ doesn't get its own line in the budget. Given the number of business leaders who will make comments like ‘my people are my biggest asset’, why do we see this lack of investment?
We think it could be the result of some or all of:
Recruitment costs don’t always come every year, and nobody plans to lose staff·
A lost link between staff turnover and employers ongoing investment in their employees
The perceived cost of training and development
Times are tough, there just isn’t any room in the budget
All valid and realistic reasons that mean that by the time we reach into the ‘discretionary’ spend jar for our people, other areas have gobbled this up. However, to challenge the thinking…. what if the people cost wasn’t seen as ‘discretionary’, rather it was seen as both ongoing maintenance factors and further a growth area for the business?
Research would tell us that a salary is simply a ticket to the game, and employees actually place a higher value on the less tangible factors that see them move from performing to high performing. These are things like growth, achievement, responsibility and recognition - all of which cost the business (and leaders) time but not necessarily $$. Time spent to understand the drivers of individuals is arguably the low hanging fruit in our sector and a strong case can be made that investment in this area will see pressure come off the salary line.
We know that the disruption of losing a team member can be significant and can see production take a hit as a result of valuable IP leaving alongside the departing team member. We know how much time it can take for business leaders to take care of the recruiting, onboarding and training of the new team members. So with this in mind, what’s the real cost of assuming 4-5% of total salaries is set aside every year for training and development? Done right this investment could see a two-fold return through mitigation of staff turnover, increased efficiency and increased production.
So we encourage you to consider a few things next time you saddle up to build out the budget for your business:
Put resource in the form of time aside for your people.
Take the leap, be bold and budget on training and development delivering a return to your business rather than a sunk cost.
Challenge your thinking that people costs can be expansionary rather than compliance.
Recognise that this is not a cost, but rather, an investment that will yield returns