Your questions answered about why and how much you should budget for learning and development in the coming year
At CUES we’ve published a lot about how talent development can help credit unions overcome the Great Resignation.
And while that situation of so many employees reconsidering the role of work in their lives—and often leaving their current employers—seems to be leveling out, there’s still no question that investing in your own development and that of your current team members—and future leaders—will pay off down the road.
As credit unions budget for the next fiscal year, I often get questions about just how they should go about handling the numbers for talent development. Here are some of the questions I hear, and what I say in response.
1. How Much Should I Spend on Talent Development?
In his bestselling book, The Advantage, Patrick Lencioni stresses that the only real competitive advantage any organization has is its ability to learn. And the faster your organization learns, the bigger and faster your competitive advantage will become. But how do you translate that to dollars and cents?
According to this article from Inc. magazine, “multiple industry surveys show that good companies spend an average of 1% of their revenue on talent development. The lower they are relative to that number, the more they increase their risk of falling behind their competition.”
2. How Can I Make the Case for a Substantial Training Budget in a Tough Economic Year?
It’s important to create a budget for training and development for so many reasons. It’s well established, as this blog points out, that well-trained people make fewer mistakes and need less supervision. That’s especially important in today’s hybrid work world!
In our magazine's just-completed reader survey, our members said their credit unions’ top challenge is staffing/hiring/retention. Fortunately, budgeting for development also helps attract top talent. It also boosts morale and cuts down on absenteeism.
Can you quantify the costs to your credit union of high turnover, absenteeism, and decreased productivity caused by low morale? They quickly add up. Be sure to look at your success metrics from training and development efforts from this and previous years. You can also leverage a calculator to help you run the numbers.
3. If I’m Not in the C-Suite, How Can I Best Talk With Our Top Leaders About the Need for Training?
For the budget-related parts of this conversation, see Numbers 2 and 3. In addition to budgeting, C-level executives care a lot about strategy. Preparing leaders to step in for a current leader who plans to step aside or leaves unexpectedly is a top way credit unions can ensure the kind of continuity that supports strategy execution. Talk about that.
Also have a strategy specific to learning. What will be accomplished by the investment in talent development that you propose? Facilitate the discussion by knowing the alternatives to the strategy you propose, and how they would play out.
Approximately a third of organizations don’t have a training budget, as reported by the ADP Research Institute report, Fixing the Talent Management Disconnect: Employer Perception Versus Employee Reality. Do you really want to be part of the two-thirds that isn’t taking advantage of the increased employee engagement, productivity and retention that comes from investing wisely in talent development?
I’m sure you don’t.
I hope this column has given you some solid ideas about the importance of investing in talent development and how to get a solid return on doing so in the coming year. If you have more questions about how to budget for professional development for 2023, please email me, and I’ll be glad to help you answer them. CUES membership and events will likely be a big help, as well.
Since joining CUES in March 2013, John Pembroke has played a leadership role in developing and launching a new direction in CUES’ strategy, branding and culture. Under his guidance, CUES has revamped its membership structure and launched new institutes. Additionally, CUES has expanded its market further into Canada and the Caribbean. Pembroke’s experience includes 25 years in financial services, marketing and e-commerce. He also has served as chief marketing officer at PSCU Financial Services, St. Petersburg, Florida. Pembroke holds a B.S. in Economics from the Wharton School of Business of the University of Pennsylvania and an MBA in Marketing and Policy Studies from the Booth School of Business of the University of Chicago.