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organizational leadership blog

Financial Management and Budgeting: Are investments in professional development worth it?

You must ‘know your numbers' is a fundamental precept of business according to Bill Gates, and almost every business leader must be involved in some form of Financial Management and Budgeting

Do you ‘know your organizations numbers’? Can you compare the benefits and costs of your organization’s initiatives? Are investments in training and professional development activities worth it? Do you know how to Can you calculate Return on Investment (ROI)? 

Lots of questions, especially, is investment in training and professional development worth it? I’ve been asked that many times by client organizations which prompted me to do some research of my own. Consider the results of a multi-year study conducted by yours truly a number of years ago with 441 clients for which we conducted training programs. The people paying the bill, reported post-training data that when consolidated indicated that for every $1 invested in professional development programs, they gained $50 in benefits.

The client organizations reported that our programs lead to significant operational improvements for their organizations. The study analyzed client reports of professional development programs over a five year period. 

A post-program client survey showed statistically significant differences in average ratings for areas such as employee morale, quality of communication, job satisfaction, contribution to furthering core values, employee retention, and customer satisfaction. 

Clients also reported gains from cost savings, cost avoidance, and increased revenue of totaling over $50 for every $1 invested in professional development programs. 

However, there is a flaw in my research, I should have also asked, what might be the cost of not training? Anyone who has ever been sued knows where I’m headed with that question and smiles. 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? These situations can literally put you out of business. My point is that training is a cheap insurance policy! 

We are proud of the work done with clients and are pleased, but not surprised. The positive benefits and impact training and professional development programs can have on any organization cannot be understated or ignored.

What To Do: Actions You Can Take Now

  • 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.
  • Understand that even not-for-profit organizations need to be concerned about money and as the saying goes, “No Money, No Mission.”
  • Think about what organizational problems or issues 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.

How to Learn More

Read About the 35 Competencies Needed to Succeed

For more about information, refer to Dr. Wesley Donahue’s book Building Leadership Competence: A Competency-Based Approach to Building Leadership Ability. 

Try a Free Online Course 

If you’re new to how effective a professional online training course can be, try Centrestar’s free Professional Ethics course. See how convenient online and on demand education can be. Click here to try our free course.

About Dr. Wesley Donahue

Wesley Donahue is President of Centrestar, Inc. a unique training organization that specializes in helping people identify anduse the 35 competencies needed to succeed in any profession. Learn more at www.centrestar.com. 

Wes’s background is in engineering, six-sigma black belt, certified project management, and business ownership. He’s also professor of Management Development and Education at Penn State University where he leads an online graduate program in organization development and change. Contact him at This email address is being protected from spambots. You need JavaScript enabled to view it.. or use our contact form.