LEARNING INITIATIVES AND INFRASTRUCTURE REQUIREMENTS
By Ajay M. Pangarkar, CTDP, FCPA, FCMA, and Teresa Kirkwood, CTDP
The word “cost” makes the hair on the back of most peoples’ necks stand up. Unfortunately, cost carries a perceived negative connotation of loss and implies a significant reduction or change. Even so, when assessing and applying cost, it can also open opportunities for learning and development (L&D). For most organizations, the learning function is perceived as a cost center. However, finance, marketing, production, information technology (IT) and human resources (HR) are also cost centers, and – like learning – they add value to the business. Consider rephrasing, “What will this cost?” as, “What value will this add?” Cost always implies contribution and added value to business objectives.
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Costs are front and center, because employee training and development places exceptional demands on organizational resources. Furthermore, the learning function is under pressure to demonstrate how learning costs lead to sustainable value. The learning function is no longer just about training; it is about competency in business, financial literacy and operational processes. The first step is identifying the purpose for your learning efforts. Your answer is probably not what stakeholders want to hear. Respect their intent, complexity of the need and the nuances stakeholders expect from a substantive response. What your stakeholders are looking for in your answer involves a combination of:
• Actual costs for learning activities. • Support costs for learning infrastructure. • Forecast financial expectations.
ACTUAL COST OF LEARNING Stakeholders want accountability when asking, “What’s this going to cost us?” Decision-makers are educated to assess cost in two ways: short-term and long-term value. Both types of costs deliver value but are accountable to the business for value in different ways. First, “cost” defines both actual cost and associated expenses. Expense is a cost, but costs are never expenses. This
