Leaders, it’s time to add a training allowance to company budgets

Skills shortages have been the bane of many organisations over the last few years. A simple and effective solution is to look internally and train the talent already available.

Allocating a training budget can be an effective way to ensure upskilling and reskilling get the attention they deserve. According to RMIT Online’s chief executive, Nic Cola, taking this approach is a competitive golden ticket.

“Training budgets are an investment in the future of the business. This growth isn’t just about improving skills needed for today: it’s about staying relevant in a fast-changing market and future-proofing for tomorrow,” Cola said.

Cola continued: “Encouragingly, Australian businesses are expecting to spend approximately $8 billion on learning and development (L and D) in 2024, which is up 15 per cent year on year. However, nearly half of employers admit they aren’t prioritising training budgets to address skills gaps, suggesting they’re not maximising the effectiveness of their spend.”

The importance of offering learning and development opportunities should not be understated. Not only does it improve upon the skill sets within organisations, but it also keeps individuals happy and engaged as their professional development is considered.

“Apart from boosting an employee’s skill set, the intangible benefits are still critical for employee performance and motivation. For employees, it can significantly improve autonomy, mastery and competence, resulting in heightened job satisfaction and retention. These factors give rise to a model of continuous learning, where frequent engagement in training and upskilling is key to keeping pace with evolving workforce needs,” Cola explained.

“Investment in certain skills will yield varying ROI, and different skills are needed for different purposes. This is to be welcomed and expected. For example, regulatory or compliance training is critical to reduce risk, without immediately generating additional value to an organisation.”

“And, a skilled workforce drives economic growth. Businesses with access to the right talent are better positioned to innovate, develop new products and enter new markets, and foster a more competitive and resilient economy.”

According to Cola, in the modern workforce, offering learning and development opportunities is crucial. Those who don’t, run the risk of lagging behind those who are offering these benefits.

“Upskilling and reskilling are more important now than ever before. In an era of uncertainty, there is a strategic opportunity for businesses to make a robust assessment of their workforce’s skill needs, and tune-up their learning and development plan so employees have the skills they need for success,” Cola said.

“In our report, employers confirmed four of the top five top skills gaps were digital, including generative artificial intelligence (AI) or machine learning, data science, coding and cyber security. By focusing on upskilling (adding to existing skills) and reskilling (learning new skills), employees and businesses can stay ahead of changes.”

He concluded: “Upskilling and reskilling the modern workforce also ensures employees feel confident and capable in their roles, which is key for a motivated and engaged workforce.”