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4 Strategies to Make Smart Choices When Facing Budget Cuts


Wed May 13 2020

4 Strategies to Make Smart Choices When Facing Budget Cuts

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Every business has been affected by the COVID-19 pandemic, and many have seen a significant negative effect on business performance and future forecasts. As companies adjust plans to conserve cash, budget reductions have already been announced or may loom in the not-so-distant future.

Learning organizations that are facing budget impacts can take steps to ensure that they are prepared to make informed choices. Here are four strategies to use to ensure that learning and development (L&D) departments continue to have as much of an effect on business performance as possible, even during these challenging times.


Strategy #1: Confirm Business Alignment

Close alignment between L&D and the business strategy is always important, and it becomes critical in times of financial crisis. L&D leadership must connect with business stakeholders as soon as possible to understand how the company strategy has changed so the impact on established talent development plans can be determined.

What is necessary to support the strategy shift?

Consider grouping the course catalog into four portfolio evaluations based on the value they are expected to yield for the organization. At Explorance, we recommend categorizing based on four areas: driving growth, increasing efficiency, reducing risk, or building foundational skills. These four areas represent the fundamental ways L&D drives value for the organization. While they are high-level, they bring an element of simplicity that helps cut through the clutter and focus executive-level conversations.

How much are you investing in each of those areas? Do you need to put some plans on the back burner for now and place more emphasis in another area to support immediate needs? For example, in some industries, there may be a newfound need to help reduce risk through new employee safety programs, while the choice to delay a new product launch changes the timing for the associated sales training.

Download the Whitepaper to Learn More About the Portfolio Evaluation Methodology


Strategy #2: Narrow the Audience

One way to reduce training costs is to train fewer people, and some programs that may have previously been open to a wider audience should be offered only to specific target audiences right now. Consider the personas that a course was created to reach and apply demographic analysis to KPIs like Scrap Learning to identify audience segments that have reported receiving less benefit from the training and temporarily limit enrollment by individuals in those groups.

Strategy #3: Use Data to Cull the Catalog with a Scalpel, Not a Hatchet

If you have segmented the catalog by portfolio and have access to some basic, consistent impact measures, it’s relatively easy to start comparing the key metrics of courses within each portfolio and starting at the bottom of the list. Don’t just rely on impact, though; consider reach too. High-volume courses that have lower impact scores may be good candidates for shrinking the audience (see number 2 above) instead of putting on hold or canceling altogether.

Download the Whitepaper to Learn About the Predictive Learning Impact Model

Strategy #4: Consider Moving Some Programs to Online Formats Permanently

While the current situation with COVID-19 has forced nearly all learning programs to move to a live virtual or self-paced delivery format, eventually you’ll be able to consider delivering live, face-to-face training again. How will you decide which programs switch back and which ones remain virtual? Establish criteria based on learner and instructor feedback on course effectiveness as well as intangible benefits that may only be able to be realized in a face-to-face format.

These four strategies will help you formulate a plan so you are prepared if you are asked to reduce your budget and will position L&D as a proactive partner to the business, ready to flex to a changing situation. Be sure to keep measuring so you can continue to make data-informed choices as the business climate evolves.


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