Blog: What happened to the training budget?

Posted by Liam McNally |   20th June 2017

Blog: What happened to the training budget?

Ye olde training budget

Remember long ago when learning and development had a big pot of cash known as the training budget? A time when managers would sit with their employees during their appraisal and look at how they could use their training allowance to help further their career development, maybe assist with their progression into management or in fact retrain them to do a new role altogether.

I know of organisations who utilised their budget to train their workforce in areas that weren’t necessarily of advantage to their business, in fact better suited to their competitors. I know of some that trained their workforce in fields that weren’t relevant at all – balloon animal creation, unicycle riding, OK I may be exaggerating but you get the point.

It’s sad to say, but it feels that those days are long gone. Many organisations have reduced their training budget dramatically, with some getting rid of their pot all together. But the fact remains that workforces need to be trained and developed to make their organisations successful and competitive.

A decline in training and development

Research published in 2015 highlighted a lack of training and development for the UK’s workforce as a “significant concern” for the future of business. The research revealed that 25 per cent of UK employees believe they receive insufficient support from their employers. The survey which was conducted by Ipsos Mori on behalf of Interserve PLC highlighted that only 48 per cent of respondents said they received adequate training and development from their current bosses, despite career development opportunities being cited as the most important consideration (after pay) when considering a future employer.

So, what is the cost of not training your workforce? 

  1. Lower productivity – if your employees don’t know what they’re doing and aren’t properly trained, productivity can remain at a lower rate.
  2. Increased supervision – untrained and under-qualified staff drain your management resources and distract your best people from urgent and important tasks.
  3. Inability to implement new technologies – this holds your business back from being competitive. If your employees don’t have the latest digital and technological skills, they aren’t doing the best possible job.
  4. Unqualified leaders – employees are promoted into senior positions without being given the necessary skills to perform their new role effectively impacting on productivity, effectiveness and efficiency.
  5. Reduced job satisfaction, morale and motivation – training creates a happy, productive workforce. A lack of training can increase absenteeism, mistakes and stress in the workplace.
  6. Increased employee turnover and costs – not investing in your employees, sends a message that you are not interested in developing their skills. As a result, staff will not stick around, instead they leave for a company who will offer them training.

How to find funding

Changes to funded training over the past decade have been confusing to say the least. The biggest overhaul to funded training comes in the form of apprenticeship funding reform. In short as an employer in the UK either you are an apprenticeship levy payer, or you aren’t.

As an apprenticeship levy payer, you have a budget for apprenticeship training sat in a digital apprenticeship account. You can use the funds in this account to pay for apprenticeships across your business in a range of occupations from administrator to zookeeper, with training that ranges from entry level to degree level.

If you aren’t a levy payer then the government will fund 90% of the cost of the training, you only have to fund 10%. Previous commitments for employer contribution were set between 25 – 50% of the overall apprenticeship cost. Now you can benefit from the increased saving and support from the government to develop the skills in your workforce.

And I know that you’re thinking that apprenticeships are just for young people, well that’s not true. An apprenticeship is a learning journey – entering with minimal knowledge and skills and leaving an expert. The apprenticeship programme focusses on developing the person for a job, a career and beyond. What's more apprenticeship reform is driving employers to create new apprenticeship standards that are tailored to the skills and knowledge required from your workforce to support your business. It is expected there will be between 600 to 800 new apprenticeship standards, compared to the current 250 frameworks, resulting in role-specific training for individuals to have the greatest impact in delivering a return on investment.

How we can help your business

Here at Intraining, we help our clients to professionalise their workforce and shift their existing learning and development activities over to apprenticeship programmes which meet their current and future skills requirements.

Our approach to apprenticeships enables our clients to maximise the potential they can achieve through government funding as well as the apprenticeship levy. In short, we do all we can to make it as simple as possible for your business to develop its workforce. Our dedicated team are ready and waiting to guide you through every step of the process.

If you’d like to speak to us about apprenticeship opportunities for your business, please get in touch with our Corporate Account team on 0330 123 1300 or complete the form to receive a call back.