10 Reasons Why L&D Budgets are Bigger Than Ever

Coral cleaners, robot recruiters and AI ethicists have one thing in common:

They don’t yet exist. 🤖

The thing is, we’re in the midst of tectonic changes in the field of work.

Rapid technological advances are already impacting the workforce structure, the Great Resignation has changed the way companies view talent, and generational diversity in the workplace brings many new, unforeseen challenges.

Of course, all of these changes have a significant impact on companies as such – but the greatest responsibility to navigate this new reality falls on L&D departments.

It comes as no surprise that demand for L&D specialists is increasing, and so are L&D budgets.

Here’s why:

1. New generations simply want more learning

While workplace learning was perceived as negative some time ago, this has definitely changed in recent years.

And if you were surprised at how eager Millennials are to learn, check this out:

84% of Gen Zers expect their employers to provide learning opportunities and are eager to learn new things in the work context. 🤓

And what motivates the younger generations to learn continuously? 

In short, their main motivations are closely linked to their career aspirations. 

They are likely to learn: 

… when new knowledge will help them stay up to date in their field.

… when training is aligned with their interests and career goals.

… when training will help them find a new job or get a promotion.

2. Changed workplace reality = different approach to training

Remote work, globally distributed teams, growing importance of employee experience, flexible processes and... a big nut for L&D teams to crack.

The new reality has many implications for learning and development budgets.

In fact, nearly 50% of L&D teams have changed their approach to better support a hybrid workforce.

How?

• They are putting more effort into employee onboarding.
• They are developing new forms of training.
• They are focusing more on health, well-being and soft skills.

3. Millions of new jobs are on the rise

Our jobs have always been closely tied to technology, and it will continue to play a big role in how we work. 

We’ve come from agriculture and manufacturing to computers and the internet – and now we’re in the midst of a major paradigm shift that will be driven by AI. 

AI will transform work as we know it by automating many tasks that are currently performed by human workers, leading to greater efficiency and productivity in the workplace, as well as lower costs. 🦾

It will also enable new and innovative ways of working that are not possible with traditional methods – and that will require us to develop many new skills.

4. Old skills won't do for new jobs

Yes, there will be new jobs in the future. 

But the existing ones will also be transformed. 

As technology advances, some jobs will become obsolete, while those requiring critical thinking and creativity will be more valuable. 🧠

This change, combined with multi-skilling, is already requiring workers to retrain and upskill. 

And the skill gap in 2023 is pretty large – half of executives are concerned that their employees do not have the skills they need to help build a successful business. 

However, only 15% of L&D pros are actively working on upskilling and reskilling – quite some room for improvement, don’t you think?

5. New technologies mean new investments

Technology has never been more accessible, and it impacts L&D teams in 2 ways:

1️⃣ First, L&D teams still invest heavily in digital skills training.

We can all agree that digital literacy is a non-negotiable requirement for almost every role today. As our work becomes more digitized and technology more advanced, there’s a constant need to improve and upgrade existing digital skills.

2️⃣ Second, L&D teams are leveraging new technologies to support learning.

Whether it is for the production of training materials or for the training experience itself, new technologies are opening up numerous opportunities for L&D teams. For this reason, many of them are planning to invest in video production tools, online learning management systems, and various AI solutions.

6. When it comes to talent retention, training is essential

Much has already been written about the Great Resignation – the trend also known as the Great Reshuffle.

And it was indeed a great reshuffle, not only for employees, but also for L&D teams. 

The numbers speak for themselves: 

Companies with good learning programs report up to 50% higher employee engagement and retention.

And with most employees still feeling poorly managed and trained, it’s time for companies to start properly investing in training.

It is indeed a huge opportunity, and it seems that people have finally started to realize the importance of training for talent retention.

7. Learners demand new training formats

Remote work and global workforce call for new training formats. 🌍

A recent survey with the latest training video stats found that 98% of L&D professionals consider video crucial for their organization's L&D strategy. The top training formats in 2023 are videos, slide presentations, and eLearning, while in-person sessions and text-based documents are less preferred.

Here are 3 trends that are expected to continue over the next few years:

#1 More online training

Compared to the pre-pandemic period, we’re facing more than 5x increase in online training programs – and this trend will only continue in the future. Most L&D professionals plan to invest less in instructor-led training and devote more resources to designing online training. 

#2 More on-the-job learning

Not only is it the preferred way of learning for employees, but it’s also the most effective one. 85% of L&D professionals expect more on-the-job learning in the future, primarily through collaboration on shared projects. 

#3 More learning through social interaction

People are social beings, and it’s no surprise that learning through social interactions is so efficient. Adding social elements such as group learning and Q&A to learning experiences greatly increases learner engagement and knowledge retention.

8. There's more need for localized training

Globalization and interconnectedness have opened doors for global businesses, allowing expansion into new markets and access to global talent. 

But what does that mean for L&D departments? 🤔

In short – more need for localized training. 

The benefits of localized corporate training are clear: 

It is more relevant to learners, promotes diversity in the workplace, and creates a sense of belonging. 

All of this leads to higher engagement and better learning outcomes.

However, localization goes beyond translation, which requires additional resources to appropriately adapt training materials for employees worldwide.

9. L&D has new training topics to cover

In the past, training consisted primarily of improving workers' "hard skills" required for on-the-job performance.

Today, training topics are much broader. 

Employees need different (and historically new) types of training, such as:

• software training
• compliance training
• cybersecurity training
• soft skills and leadership training

These new types of training are creating more work for L&D departments and highlighting the importance of having a good training strategy. 

Soft skills training budgets in particular are increasing rapidly. This is believed to be one of the necessary L&D investments, as 91% of professionals believe that soft skills can improve the workplace and also drive business results.

10. L&D is simply becoming more important within orgs

Last but not least – L&D budgets are growing because L&D is simply becoming more and more important. 

With shifts in the economy, technological advances and socio-cultural changes, we've finally reached the point where we can all agree on one thing:

‍Companies are beginning to understand that their most valuable asset is their employees and that investing in their development is critical to business success. 

Final words

It looks like L&D has gotten its well-deserved seat at the table – the majority of L&D leaders agree that their function has become more cross-functional and strategic.

In order to properly address the ever-changing landscape of the workplace, L&D departments will have to be increasingly flexible. 

Their methods will be subject to constant change: new trends to jump on, new technologies to implement, new training formats to try.

Their goals, on the other hand, will remain the same: an engaged, productive, and satisfied workforce that drives tangible business results through a positive company culture.

An incredibly effective approach to achieving this is through the creation of engaging training videos. The good news is that creating such videos has become easier than ever before. So, if you're eager to get started but unsure of where to begin, fear not! We've got you covered with this tutorial.