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How to sell Learning and Development to a sceptical CEO

Many small business owners make the mistake of assuming Learning and Development is an unnecessary expense. Rajeeb Dey, CEO of Learnerbly, explains how to teach even the most skeptical leader that they need to invest in their team’s development.

Among the leadership positions in a small business, the following situation is pretty common:

  • One person keeps an eye on the company’s finances, watching the purse strings and managing the budget
  • Another person focuses on the company’s people and culture, working to build an efficient and positive workplace.

These two roles can contradict each other. Sometimes a people-related task can look like it is threatening the company’s bottom line – and sometimes a budget-related issue can hinder the development of a positive workplace.

In particular, I’ve noticed that the “people person” often has an especially hard time convincing the “money person” to push resources towards learning and development. This isn’t too surprising. Learning and development is a long-term investment that doesn’t quickly generate an obvious return.

But – for reasons I’ll go into – it is vital that your business does devote resources to L&D. So if you’re the “people person” who has to convince the “money person” – who might be a CEO, a CFO, or really anyone in a leadership position who is concerned with a budget – here’s how you do it.

The argument you make for learning and development must change depending on your business

How you approach this conversation depends on what stage your business is at.

I’ve identified three broad situations small businesses find themselves in – and the arguments that best demonstrate the need for L&D for each scenario respectively.

Situation 1: “hyper-growth” businesses

This group contains the businesses that are either rapidly expanding, or are aiming and expecting to grow significantly in the foreseeable future.

If your business fits into this group, then the best way to demonstrate the value of investing in L&D by focusing on its impact on hiring and retention.

For hyper-growth businesses, hiring employees is an essential activity, and an area where a considerable amount of resources are expended.

L&D is a fantastic tool for improving your ability to hire employees. Gallup found that “opportunities to learn and grow” was the most important attribute millennials looked for when applying for jobs. A good L&D package makes your job offer more appealing – reducing the time (and therefore the cost) of the hiring process.

Alongside hiring, retention is critical for hyper-growth companies. They’re rapidly increasing the size of their workforce – so what happens a year down the line if a huge portion of those employees decide to leave? This represents a potentially crippling future cost. Improving retention is a chance to reduce and delay this cost – a highly attractive prospect for anyone thinking about their budget over the upcoming years.

L&D has been proven to have a significant impact on retention. A Gallup study found that 92% of employees who agreed with the following statements planned to be with their companies for at least another year:

  • “There is someone at work who encourages my development,”
  • “In the last six months, someone at work has talked to me about my progress”
  • “My supervisor, or someone at work, seems to care about me as a person”
  • “At work, my opinions seem to count.”

The first two of those statements are directly related to having a strong learning and development culture – so investing in this should be a no-brainer to anyone concerned about retention.

Situation 2: the “optimisation” stage

If your business isn’t in the “hyper-growth” stage (or has never been in one), it probably falls into this category. This is a stage many companies settle into once they’re “mature”: a period where they focus on improving efficiency, maximising output and minimising costs.

If your business is focusing on optimisation rather than growth, then you should sell L&D as a vital tool for boosting employee engagement.

So what is engagement – and why does it matter?

An employee who is not engaged is someone who simply shows up, does their job, and goes home. This is a widespread issue – but it’s particularly acute in the millennial generation: 55% of millennials report not being engaged at work, more than any other generation. That’s a worrying trend.

Source: Gallup, What Millennials want from Work and Life

“Engagement” might seem like a slightly wooly, impractical idea – it’s hard to measure how someone’s passion for their job impacts the bottom line. However, there’s actually good evidence to suggest more engaged employees have a significant impact on the health of a business – it’s linked to increased productivity, more revenue generation, higher growth and better earnings per share.

In the previous section, I talked about “hyper-growth” companies. These fast-growing businesses don’t tend to have engagement problems – businesses that are rapidly expanding are exciting places to work. Businesses focused on optimisation, however, are a different matter: it’s much harder to get people excited about efficiency and cost-management, so low engagement is a very real risk for them.

For these businesses, explaining the impact of L&D on engagement is a highly appealing argument. Doubling-down on your team’s personal development is a fantastic way to improve their engagement – as CharlieHR COO Ben Gately put it, people generally aren’t really passionate about their own jobs – they’re passionate about their own hopes and dreams. So if you can create L&D structures in your business to help them progress towards these hopes and dreams, they’ll become engaged.

Additionally, an effective L&D strategy can have a more direct impact on productivity – it can  teach employees new skills to boost their speed and efficiency in doing their jobs. It also opens the door to innovation: employees might come across new ideas or practices which allow them to re-think the way they or their team work.

Situation 3 – the “behind the times” business

I’ve spoken to a lot of businesses where the leadership is conscious that they’re lagging behind the times, and haven’t really embraced the future of work and a digital-first world. Usually these businesses are older, and might be stuck with legacy systems and processes.

If you think your business fits into this category, you need to be talking about safeguarding against disruption and embracing the digital transformation.

These businesses are often at serious risk of disruption from fast-growing, young businesses. To avoid being forced out by these new businesses, older organisations need to react and adapt – and doing that is going to require a bunch of skills they may well not have access to.

When you’ve got skill gaps in an organisation, you’ve got three options: buy, borrow or build. “Buying” skill means hiring someone with the skills you need – but this can be prohibitively expensive: you’re probably dipping into an already scarce and expensive talent pool. “Borrowing” is contracting – which is also expensive, but with the added drawback that it’s only ever a short-term solution. Finally – you can “build” the skills in your own workforce through investing in L&D. This might take longer than the other options – but it’s a fantastic long-term investment, and generally the course of action that these businesses should be taking.

Find out more about HR for startups in our complete guide.