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Management Training – How much should you budget for?

Many researches have proven the benefits of management training and development over the years and the impact that the right programmes can have on an organisation’s performance. However, the key question is often, how much time and money should I invest? As many organisations are currently in the process of preparing their budgets, this is an important question to answer.

Ultimately the investment needed depends on what you are trying to achieve and the current level of capability in the organisation. However, at budget time, what needs to be delivered is not always clear and so all you may be able to is prepare a ‘best guess’.

Good practice suggests that managers should have around 10-12 development days per year, with about 50% of the time spent on ‘externally directed’ development (training courses, coaching, mentoring etc), and 50% on ‘personally directed’ development (reading, research, project work etc). At around £250 per day, this equates to an average of about £1200 per manager per year. However, It should be noted that averages can mask a wide range of spend, particularly where 1:1 coaching is concerned, which can bump up the investment needed to £3000-4000 per person per year.

In 2004 the Chartered Management Institute undertook some research on the investment companies make in Management Training & Development, a summary of which is provided below.

Investment in Management Training & Development*
UK France Germany Spain
Number of Days 10 7 8 13
Spend - € 1625 2674 4438 1803
Investment/
person/day - € 163 382 554 138

* Developing Managers: A European Perspective, Chartered Management Institute, 2004.

Clearly the amount that an organisation budgets for their Management Training and Development will be dependent upon what it can afford. Ironically, organisations that are struggling probably need to invest more in the development of their managers (and staff), to enable them to turn business round. During tough times those responsible for training and development need to be as creative as possible and ask themselves some searching questions such as:

1) Who are the key people whose performance disproportionately affects the performance of the organisation?
2) What do these people need to do to add real value to their performance?
3) How many different ways can I support these people to develop what they need without spending any money?

Just because the organisation doesn’t have the budget, it must not mean that all development grinds to a halt.