Personal development budgets can be a great way to boost your professional growth, contribute more to your business and take your career to the next level.
But how should you go about proposing a personal development budget to your company as a solid business case? What are the best ways to get them onside, and how can you convince them that it’s a mutually beneficial idea? In this article, we’ll go through some of the key strategies and set out a business case template that you can use to achieve this goal.
What is a personal development budget?
Personal development budgets are a sum of money that is set aside for employees to spend on courses, training, workshops, or conferences that they think would help them progress in their current role.
An employee’s managers can directly manage this, or employees can pick and choose what they want to take part in, or some companies choose to go for a mix of the two approaches.
Personal development budgets tend to focus on long-term skills that may last an entire career. They can be tied to company goals, but the intent is usually to promote personal growth for employees and to help them achieve their career goals.
Do many companies use them?
When employees’ begin a new role, at least some training is provided to ensure that they can perform their daily duties effectively.
However, companies are not obliged to give employees training that falls outside of this scope. Sometimes, it can be challenging to convince an employer to provide this training, as companies may not see the long-term justification of the cost. This is because a good personal development plan is done with a long-term vision in mind and may not yield measurable results straight away.
That being said, many companies are increasingly seeing the benefit of personal development training for their employees. One example is the e-commerce company Etsy. They set up “Etsy School” for their employees, where workers can get access to training throughout their time at the company that can be wide-ranging. Employees are encouraged to pick a focus for their career path and then choose courses around that.
This is an excellent example of self-led learning, which is a hallmark of a quality personal development programme. Although it’s still up to companies whether they want to take a broad approach with development budgets set on specific role timelines or whether they would rather take a more personalised approach, companies like Etsy demonstrate how the latter approach can be used effectively.
How can I convince my employer to set one up for me?
If you’re convinced that a personal development budget is a great idea but are unsure that your manager or HR department may agree, there are a number of areas you can point to get them over the line.
Demonstrate value for money
When you’re presenting your business case for a personal development budget, one of the best areas to focus on is value. Suppose you explain that your efficiency could improve significantly. In that case, you can show your employer how you’ll actually be giving them far better value for money when it comes to expenditure around your salary.
Present your argument as one that seeks to deliver greater value, more profitability and would see you contribute far more to goals based on the company’s financial projections. You may be able to convince your employer to set up a personal development budget. Have information on the pricing of certain courses to hand so that they can get an understanding of how ambitious you want this budget to be. This can be key when it comes to the decision-making phase of whether a company chooses to follow your proposal or not.
Using financial projections set out by your company and pointing out areas that your budget could help improve will demonstrate that your personal budget is mutually beneficial for both you and your company and their business strategy. Demonstrate the feasibility of your plans, their expected benefits, how they can improve cash flow and create financial benefits within the business.
Letting them know that having a personal development budget in place would demonstrate to you that the company is invested in your long term will soothe their fears of you going elsewhere after a course of training is complete. Poor retention can be costly for companies. Letting those in charge of investment decisions know that this is likely to boost employee loyalty and reduce procurement and outsourcing costs if implemented on a wide scale could be a strong selling point.
Show them how you can factor in training to your current schedule
Time can be a valuable asset for companies, and sometimes calls for a greater focus on training will be quashed by a counter-argument that there simply isn’t enough time.
It’s great if your company can make time for you to complete training, but if this is proving difficult, explain how this will save time overall. You can explain how you’ll be able to get more done in the long run, therefore freeing up time or working out a schedule that minimises time lost at work and has a minimal impact on strategic planning as possible.
The key here is to already have the questions answered so that you can prove to your employer or HR team that you’ve factored in lost working hours. If you feel that a training plan that’s based on a personal development budget or is more self-led will actually take up less of the working day than the current training you’re receiving, make that clear to the person in charge of L&D at your company.
Help your L&D teams understand you may not progress without it
Ultimately, career development is something that benefits both a company and an individual. Employees who stay in the same role for years with no progression can stop new talent from coming through and can create an unrewarding and unfulfilling working environment.
If you feel that your current training programmes aren’t good enough and that a dedicated budget that focuses on your personal development is your preferred option, make that clear to your L&D team.
By explaining how your lack of professional development means that your company is at risk of losing out on your true potential, you’re putting them first and giving them a chance to understand the negative impact it could have on their side of the equation.
You can even set out key performance indicators and deliverables that are achievable within a certain timescale due to steps taken as a result of your personal development budget.
You can tie these to business objectives or a wider business plan in order to convince the decision-makers and team members within your company that learning new competencies will help you reach new milestones in your lifecycle as an employee.
Give examples of self-management
How personal development budgets are spent isn’t always down to the individual. However, when making your business case, you should point to times where you’ve managed yourself to grow within your role.
By explaining that you’re already generating progress by managing yourself, what software or skills you use, and through speaking to colleagues in other departments, you will come across as an eager learner who knows exactly how to spend and manage their own personal development budget.
Let your employer know that you can be trusted to set up a project plan using this budget that addresses business needs, can pivot to align with the wider company and can solve business problems with minimal input from higher-ups.
By using the steps that we’ve set out, you’ll be able to convince your employer or L&D team why a personal development budget is a step in the right direction and will present many business benefits. Explore our Workforce Training hub today if you’d like to find out more about the courses you could take once this budget is in place.