HR Views

L&D Budgets Often Neglect Performance Enhancement, Study Finds

A recent report by RedThread Research, commissioned by Schoox, highlights a growing issue: employers are struggling to invest in training programs that go beyond just keeping the business running. The research, which included interviews with 17 L&D and HR leaders, found that organizations are heavily invested in what they call “license-to-operate” training—such as safety and compliance. While this is necessary, the focus on these areas leaves little room for developing workers’ current skills or preparing for the future.

The report breaks down front-line worker development into three categories: keeping the lights on, improving the work, and planning for the future. The challenge, according to RedThread, is that many companies are out of balance, focusing too much on the immediate needs and not enough on long-term growth or enhancing present-day performance.

For businesses to thrive, RedThread suggests that leaders must find balance—not necessarily equal investment across all categories, but a strategic focus on the most critical areas. For instance, “license-to-operate” efforts should be streamlined to cover only the essentials. Tightening up proficiency standards or ensuring consistency in training content can help make these programs more efficient and effective.

To improve current performance, organizations must focus on filling gaps in skills and knowledge that provide the greatest return. This could involve improving onboarding processes, offering more targeted development opportunities, cross-training employees, and equipping supervisors with better tools to lead.

Looking ahead, companies should also invest in future-proofing their workforce. This could include building clear career frameworks, offering coaching, and ensuring workers have a roadmap for growth.

The shift in focus from recruitment to internal talent development is echoed in a SHRM report released earlier this year. However, companies are facing a significant barrier—high turnover and burnout—which hinders the ability to fully implement these development plans. As noted by the Association for Talent Development, turnover is a major roadblock to effective on-the-job training, particularly for front-line workers. A separate report from Axonify further suggests that improving staffing levels may have a more significant impact on front-line workers than many forms of professional development.

Ultimately, companies must recognize the value of investing in training that not only addresses immediate compliance needs but also enhances day-to-day performance and prepares workers for the future. Without this broader focus, businesses risk falling short in developing the talent they need to succeed in an increasingly competitive market.

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