Hello, Guest! Please login or register.

ORGANIZATIONAL LEADERSHIP

Are professional development programs worth the money you must spend?

Organizational LeadershipOrganizational Leadership requires that you understand Financial Management and Budgeting. Knowing when and where to invest dollars – and when not to – is a necessary professional competency for leaders at every level.

An organizational budget will stretch just so far, so you’re forced to make hard choices when it comes to allocation of professional development dollars. If you get it wrong, your workforce won’t be happy, and your manager might wonder if you’re best suited for a different job.

So, what to do? First, even if you think you’re not a numbers person, appreciate that numbers help clarify ideas. Second, in our modern world, be mindful that skills need constant updating. Third, before you decide, consider the cost of not funding the training your organization needs.

Truth: one person’s “happy to go to class” is another person’s “happy to get time off work”

One question I hear often when consulting with clients – and usually asked in a wistful voice – is whether the investment in professional development is worth the cost, let alone the lost work hours and work an organization must do to establish and administer such programs.

Something else often buried in the question is the difficulty of knowing what kind of training would yield the best results. The problem is that professional development can be as simple as an afternoon where the team watches a safety movie all the way to a set of sequenced classes that address needed competencies.

Managers may not directly say so, but they also wonder if the employees who look forward to a “mini” vacation after signing up for a class (and the less the class has to do with their job the better) will “learn something.”

What you need to know is there are ways to figure out the best return for your professional development dollars. Know also that even recalcitrant employees hope for something better, be it a promotion, money, or a pat on the back. If people aren’t contributing, it’s often because they don’t have the skills. Further, technology keeps changing in our world, so unless you want to foster a revolving door of employees, training is a fact of life.

Instead of relying on feelings, I took my own advice and studied the numbers

Over the years, I was asked these kinds of questions so many times that I decided to do some research. I also decided to quantify the results. That’s because it’s harder to fool yourself when you look at numbers. Plus, numbers make the benefits clearer.

Consider the results of a five year study conducted by yours truly. I studied 441 organizations that had participated in one or more of Centrestar’s programs. The results amazed me.

Here’s what I learned from the people who paid the bills: Post-training results showed that for every $1 invested in professional development, the organization gained $50 in benefits!

The gains were in reduced operational costs, cost savings, cost avoidance, and increased revenue. Further, post-program client surveys revealed statistically significant differences in the average ratings before and after training in areas such as employee morale, quality of communication, job satisfaction, contribution to furthering core values, employee retention, and customer satisfaction.

That’s not all – consider the costs involved in not providing professional development (think lawsuit)

In retrospect, I realized that as eye opening as my study was, it was flawed. I should also have asked this: What might be the cost of not training? Anyone who has been sued knows where I’m headed with that question. The costs associated with potential training are dwarfed by the cost, stress, and time consumed in lawsuits. What if your organization and you are hit with a sexual harassment or wrongful discharge suit, or your organization is shut down because your best customer cancelled orders due to poor quality? Such situations can literally put you out of business. My point is that professional development is a cheap insurance policy!

The takeaway is the positive benefits that professional development programs bring to any organization cannot be understated or ignored.

Build Your Competency: Run the numbers and then decide

  • Recognize that Return on Investment (ROI) is a performance measure used by most business organizations to evaluate the efficiency of an investment and compare it to other investment options. Learn how to do an ROI study.
  • Understand that even not-for-profit organizations need to be concerned about money and as the saying goes, “No Money, No Mission.”
  • Consider the organizational problems or issues that keep you awake at night and what the cost might be if you don’t act. Then conceptualize what training efforts might help you sleep better and pursue them.

Dr. Wesley Donahue

dr wesley donahue centrestar online ceu hours and coursesI’m Wes Donahue, President of Centrestar, Inc. and I also lead the online graduate program in Organization Development and Change at Penn State University.

Centrestar is a training organization that helps people identify and use the 35 competencies needed to succeed in any industry or profession. Learn more about us at www.centrestar.com

For more information about the 35 competencies, see my book Building Leadership Competence: A Competency-Based Approach to Building Leadership Ability.

Contact me at This email address is being protected from spambots. You need JavaScript enabled to view it..