How to Budget Training

21ASTD interviews Alice Waagen, PhD

Photo by KRC,

Transcript of interview with ASTD, July 2000

ASTD: Your PhD was in art education. Was it a long step from there to gas and electric and transportation?

Alice Waagen: In a way, yes, and in a way no. Art education has a lot to do with skill-based training. You’re trying to teach people how to create art, and for me it wasn’t as big a jump conceptually as it might sound.

ASTD: What part of training and training management gets you the most excited?

Alice: I’m old fashioned in that sense. I love development and I love delivery.

ASTD: The latest Info-line you’ve written for ASTD discusses “Budgeting the Training Function.” What approach can help training departments avoid turning budget time into “budget wars”?

Alice : If I had the answer to that I would have a lot of money. There really isn’t a single solution to budget wars. The one thing I learned having spent 17 years inside corporations is that it’s limiting to think of budgeting as an accounting exercise. It really is more a political and interpersonal exercise than a fiscal exercise. And I think people who understand that and know how to work with that do better than those who feel it’s simply a matter of documenting what the needs are and trying to get them filled.

ASTD: What do training managers tend to neglect the most when it comes to budgeting?

Alice: This is such an old thing that we hear over and over again, but it still doesn’t sink in a lot of the time: people tend to neglect linking training to the business. We need to demonstrate that training is not mere overhead, but an actual management tool that can be used to increase performance and business results.

ASTD: How can the right approach to the budget process benefit the training function?

Alice: Well, they can secure more money and keep it, hopefully. One of the biggest problems I’ve found — again, from many years of doing this — is that if you feel that obtaining the budget is your last hurdle, you’ll generally find that it isn’t, because in most organizations you then have to defend it for the next year — sometimes on an almost monthly basis. And at any point where you can’t demonstrate the value of what you’re doing, even though that money was approved in your budget, it’ll be robbed to go to some other event.

ASTD: Is training always one of the first to be robbed?

Alice: It can be. I have found there are some training budgets that are very easy to maintain the funding on, and that is areas like regulatory training or required training that is required by a government agency or whatever. Management can’t argue with that. I’m speaking specifically of organizations that have to fund training for OSHA or EPA or any of the federal regulations. If that training doesn’t happen, companies can be faced with everything from fines to being put out of business. Those monies will rarely get touched. Where we don’t have that anchor to the real world — for instance, in management leadership training — it’s extremely easy for cash-tight companies to simply go in and raid that money.

ASTD: Is there a single approach that works in those situations?

Alice: Not really. I’ll tell you in my old age that I have found that the cases where training is well-funded and valued is usually more the result of enlightened leadership than it is anything the training department people do. In other words, if the CEO firmly believes in his heart that professional development is key to the company’s success, then it will do fine. If the CEO doesn’t believe that, training people can argue till they’re blue in the face and they still won’t break through that wall of resistance. It may be negative to put it that way, but that is, unfortunately, what I’ve found in my work.

ASTD: Are there problems that trainers face in earmarking appropriate funds for the training they’re proposing? Pitfalls, difficulties in determining what amount of funds they need to ask for?

Alice: That’s as much an art as a science, and again it depends on the type of program you need to fund. For instance you may budget assuming that an internal resource will be available to run a program. Zenger-Miller programs are an example: they require that a person be certified before they’re allowed to deliver the training. So you have an internal staffperson certified, and halfway through, that person quits. You’ve got training needs lined up; you have to deliver; and now you have to go outside for that resource. Suddenly your training budget is blown.

One of the challenges in the budget process is our old-fashioned notion in business that budgeting can be done on an annual basis. Often what that means is you begin the planning process about 18 months before the end of the next fiscal year. Then oftentimes as you’re planning and executing a budget, there will be radical changes in the business itself, which totally throw those plans out of whack. This is not unique to training; I think it’s a challenge to anybody in finance. Accounting in corporations today means trying to see the crystal ball and predict the monetary needs far ahead, when the world of work is changing radically on a daily basis.

ASTD: When there is a limited training budget — which is, I guess, always — how do you decide which training gets priority?

Alice: That’s a good question. The one tried-and-true method that goes back to the beginning of time is the squeaky wheel. How high up on the org chart is the person proposing it? How much will they scream if they don’t get it? Those are the ways priorities have historically been set, and they’re very poor ways to do it because if you let one influential person shape your decisions, your decisions are only as sound as that person’s point of view. Ideally, again, if the budget is linked to the plan, and the plan is linked to the business, then depending on the criticality of the business that training is supporting, that will be the priority for the training. But that’s the ideal, and oftentimes it’s not how it’s done.

ASTD: Do you have any creative suggestions for managers on tying the training function to revenue generation or return on investment?

Alice: My one suggestion is to be thoughtful. It’s more challenging than one might think. In other words, when you decide to make training a revenue-generator you are stepping out of the role of being just a training person into making business decisions. What that means is, you either have to have the skill set, or somebody on your staff does, to really know accounting, bookkeeping, planning and all these other things. I’ve seen a number of programs where people say we’ve got this fabulous program and we’re going to offer it externally and we’re going to make all this money, and they don’t factor in advertising, marketing, promotion, space rental, all these other factors — so six months down the road they realize they’ve made $10,000 by spending $50,000. It’s a very tricky thing.

It can be done, but when I hear training people want to become a revenue center I question them about their business background and their true understanding of the entire business process. And if indeed they come at it from a business point of view, I say hey, have at it. If on the other hand they come from a very strong training background but really don’t understand how to write a business plan and how to really look at P&L statements and everything else, I get nervous.

ASTD: What do you see as the impact of e-learning on training in general, and particularly on budgeting for training?

Alice: E-learning is huge. It has the potential to replace a lot of our traditional standup classes, and of course standup training is by and large one of the most expensive forms of training once you factor in the man-hours, taking people away from their jobs, etc.

I am a firm believer that not everything can be translated to e-learning. But even if you had a traditional training department where you’re able to offer 25-50% of your current program electronically, the cost savings would be enormous. And whenever you get into cost savings, you’re going to ring the bells of the people in charge, and that of course will be the direction they’ll want to go in.

ASTD: Do you have a feel for where e-learning works well and where it doesn’t?

Alice: Oh yes; actually I have a strong belief more than a feel. I believe that anywhere you need to apply learning in a situation that is not electronic, all that electronic media can do is transmit information and knowledge, not the application itself.

Let me give you an obvious example: interpersonal skills training. If you’re teaching managers how to do job interviews, basic interviewing skills, you can electronically give them all the information they need on how to structure an interview, how much time it should take, how to script questions, all of that knowledge and information will translate beautifully.

But when it comes time for that person to step out and practice interviewing, that becomes very difficult to do electronically. I’m afraid many electronic solutions ignore that: they provide training only to the knowledge and information level, assuming that the person can then turn off the computer and turn around and execute the skill. Which in my experience is not normally going to be very successful.

ASTD: Have you ever tried a combination of the two — e-learning and traditional classroom training?

Alice: Yes, many people do that. For instance, they’ll do electronically what we used to do traditionally in terms of pre-reading or homework or assignment work, but then do the role-playing, the case studies and the personal interaction work in the classroom.

ASTD: Does that still represent a significant savings?

Alice: It depends how it’s set up. If it’s not set up right, it could even cost more money. It depends on what the program is, how it’s structured and everything else.

ASTD: Are there big upfront expenses in developing e-learning programs?

Alice: Yes. Many people are acknowledging now that those who are very good at delivering electronically have a different skill set than those who excel at non-electronic course development and delivery. So companies that are jumping into this with both feet are finding that to start with, they either have to retrain their trainers or in some cases just hire new ones.

Because, for instance, knowing how to carry on a very solid discussion electronically in a chatroom format is a skill most of us aren’t going to have until we’ve done it a few times. So yes, it’s expensive upfront because it means retooling, reeducating and everything else, and that’s beyond the equipment costs.

ASTD: In an earlier Info-line that was reprinted last year you talked about “Essentials for Evaluation,” which seems to be one the most difficult aspects of training management. Have you found any breakthrough techniques to make evaluation easier, more accurate or more useful?

Alice: Not really. I hate to say it, but the work of Donald Kilpatrick in the 1950s is still sound today. The biggest problem with evaluations is getting people to do them and then to pay attention to the data they get from them.

I work with clients who will ask for training and I’ll ask what they want for an evaluation, and they say we don’t care. I actually got mad at one client and said, “We’re going to evaluate this whether you like it or not!” But sometimes in today’s work world we are so event-driven, we are so driven to do things, that we don’t stop to ask whether those things have any value.

So my first hurdle is to get people simply to do evaluations. They don’t need anything fancy, they simply need to do them, and then of course to look at what they hear back from the class participants and say what are they telling us, is there anything we need to do differently or change in the program. But I’m just astonished how, everywhere I go, people don’t do even the most rudimentary analysis of whether their programs are effective or not.

ASTD: Is it possible to answer the senior manager who wants to know how training affects the bottom line?

Alice: It is. If the senior leader is a strongly quantitative, numbers-driven person it can become very difficult. But I have found most senior leaders are very content with anecdotal evidence. In other words, going back to the participants any length of time later and asking them what are they doing differently since they’ve been to the training.

And if the training objectives were such that they were learning a knowledge, a skill or an application that is critical to their job performance, they should be able to come back and say, yeah, I’ve started to something differently, and these are the results I’ve achieved.

That kind of documenting and taking it back to senior leaders — again, I’ve found that for most senior leaders it’s fine. Every now and then you do run into one who wants some sort of an absolute direct link to a bottom-line dollar amount. That becomes much more challenging.

ASTD: Is there a way to deal with that?

Alice: It depends on the training. If it’s skill-based training that is going to impact the generation of revenue, yes. If not, probably not. For instance, if you are teaching salespeople to sell better in a very concrete demonstrable way, and you can provide before-and-after numbers for your sales volume, sure, you can come up with a number, no problem.

If you’re doing interpersonal skills training that’s basically just helping people get along better and communicate better, it becomes much more difficult — and in some cases impossible — to say, well Joe used to get into fights 5 times a week for 20 hours; now he’s only in fights 3 times a week. I laugh, but there have been numerous articles on how to evaluate training that actually propose those kinds of bizarre formulas.

That’s why I say, “There’s no ROI on the ROI.” It costs more money to pay training people to track that nonsense than the dollars they are purporting to save. There’s a certain point at which senior leaders have to have some leap of faith. They have to say, there’s a layer of things we do for this business that our heart knows makes sense, even though our minds can’t put exact dollar figures to them.

Canceling a family picnic that’s been a company tradition for 50 years, and it’s the one time of year when people get to meet each other’s spouses and see their children, and then some pencilhead gets the idea they’ll save $20,000 by canceling the picnic. He’ll say, prove to me that that’s affecting the bottom line. Well, how can you prove improved morale, commitment to the company, length of service? You can’t. But your heart tells you of course this is going to kill these people’s motivation. That’s where, in my mind, you separate the great leaders from the not so great. Great leaders are the ones who see the value in this intangible stuff and say, I don’t need the dollar figures to know that this is a return to the company.

ASTD: Can I ask you about Info-line. Do you read them? What do you like about them? How do you feel about being an author for Info-line?

Alice: I promote them all the time. What I tell people is if you want to learn something quickly, without investing a lot of time in reading a book, you want a good, solid basic understanding about a topic, go to the Info-lines.

They are cheap compared to buying books; you can read them in an afternoon; and they’re good stuff. I promote them all the time. I guess I’ve been around long enough, I do a lot of volunteer work, career counseling work. Whenever people tell me they are starting out in training, and where should they start, I send them to the Info-lines. I think they’re a great way to learn a topic.

Take for instance the topic of evaluation. I’m a little biased on that one, having written the article on it for Info-line — but you could go to the library and read 100 books and articles on evaluation, or you could pick up one Info-line. I’m not telling you everything you need to know in the Info-line article, but you’re going to have a basic understanding. Plus they have bibliographies, so if the article isn’t enough for you, you’re guided to where to look deeper.

So I do use them. I also use them in my own training programs. If I’m doing a train-the-trainer, I might include the one on task analysis or the one on evaluation as part of the course materials for the same reason: they’re quick, they’re easy and they’re relatively inexpensive.

ASTD: Takeaway tips?

Alice: I think in training oftentimes we are so focused on what we’re doing, we get much too narrowly focused. For trainers to succeed in the world today they do need to know what’s going on in the world of business, not to the level of an MBA, but they need to know generally what’s going on in corporate America. I think that helps them articulate what they’re doing, and it helps them avoid the “gotchas.”

If they understand, for example, the horrors the work world is going through with mergers and acquisitions, then if their company executives come down the next month and say, we were just acquired by XYZ, help us deal with this — the trainers have a better understanding of what’s ahead. I think we get myopic in training. We tend to read and think only about training, and that’s not a good survival tactic. Look outward. Be active. Join associations.

ASTD of course comes to mind, but there are others. I’m amazed sometimes when I meet training professionals who have been in the profession for years, and they never go to meetings; they say, “I’m too busy working.”

I think, first, that’s boring. Secondly that leaves them with no safety net should that job not work out for them. I’m a big networking advocate. Get out there, meet people, know your training community, know what’s out there, where the jobs are and where they are not, where the bad companies are and where the good companies are. Get out of the shell.