Right now, most UK organisations are trying to square an awkward circle. Costs keep rising, growth is hardly inspiring, and every leadership team is under pressure to ‘tighten the belt’. In that climate, learning and development often shows up on the list of things that feel easier to cut.
I get why. On paper, trimming the training budget looks like a clean way to save money. People still come to work, the lights stay on, and the P&L gets a bit of breathing room.
But here’s the uncomfortable truth: cutting L&D is a classic false economy. Especially now.
The UK backdrop: why everyone is feeling the squeeze
To understand why the conversation is so fraught, it’s worth acknowledging the reality:
- Growth is basically flat.
- Inflation has eased but remains stubborn enough to hurt.
- Consumer confidence is fragile.
- Services (the engine of the UK economy) are reporting declining sentiment.
- Many employers are openly saying they expect to reduce training spend this year.
In that environment, being cautious makes sense. But making cuts without weighing the long-term impact doesn’t.
What the evidence actually shows about L&D
If we strip out opinions and look at the data, a clear picture emerges.
Skills matter… a lot
Skills development is one of the few consistent drivers of productivity in the UK. Studies have shown that when more staff receive meaningful training, productivity lifts. It doesn’t take huge interventions to move the dial, but it does require more than one-off workshops or generic e-learning.
Quality beats quantity
One of the more interesting pieces of UK research highlights that deeper, better targeted training creates productivity gains of 5-10%. When managers and their teams learn together, the lift is even higher.
In contrast, cheap, scattergun training does very little. So the question isn’t ‘should we invest?’, it’s ‘are we investing in the right way?’
Under-investing is already hurting us
Employer spend on training has declined for years, and the result is predictable: widening skills gaps, uneven regional capability, and businesses struggling to change at the pace they need to.
In other words, the cracks are already visible. Cutting L&D widens them.
The business case: where the ROI actually shows up
When you’re making the case for L&D — especially in a cost-conscious environment — it helps to be very clear about where the value lands. And it’s not fluffy.
Productivity
The numbers speak for themselves. Even a small uplift in productivity can easily outweigh the cost of a well-designed learning programme.
For example:
A company invests £75k to build resilience and change capability in 150 people. If productivity improves by just 2%, that equates to around £210k in additional value in a single year.
That’s nearly a threefold return, and 2% is conservative compared to what the research suggests.
Retention
Replacing good people is expensive. When employees feel they’re developing, progressing and supported through change, they’re far more likely to stay. A modest reduction in turnover can save more than the training budget itself.
Faster, smoother change
Most change doesn’t fail because the strategy is wrong, it fails because people weren’t given the time, support or capability to adopt it. Learning that focuses on mindset, resilience and practical skills shortens the ‘time to benefit’ dramatically.
Resilience in downturns
The organisations that come out of tough periods stronger are the ones that invest in their capability to adapt. L&D is a major part of that. Not a nice-to-have — a strategic choice.
Why this matters now more than ever
We’re in a period of constant transition: AI, shifting markets, new customer expectations, regulatory changes… the list is long. People are carrying more cognitive load, more pressure and more ambiguity than ever.
Learning and development directly addresses that by:
- reducing overwhelm
- giving people the skills to handle new demands
- building confidence
- supporting better leadership
- improving decision-making under pressure
This isn’t soft stuff. It’s the foundation of sustained performance.
‘We still need to save money’ — of course you do
And here’s the good news: you don’t have to choose between investing in people and managing costs. You just have to be smarter about how you invest.
Start with the outcome
Don’t buy courses. Solve problems.
What are the business outcomes you need? What behaviours will drive them? Build L&D around that, and measure it.
Prioritise where it matters most
Focus on leaders, change-critical roles and areas where capability gaps are actively slowing progress. A smaller, better-targeted investment usually outperforms a broad, shallow one.
Integrate resilience into existing programmes
You don’t need a standalone resilience initiative. Build it into leadership development, transformation work and everyday coaching.
Use the economic context to strengthen the argument
Weak growth, tight labour markets and ongoing uncertainty actually make the case for L&D stronger. When hiring is hard and margins are squeezed, developing internal capability becomes both cheaper and more reliable than relying on the external market.
So, where does this leave us?
So the real strategic question for leaders isn’t:
‘Can we afford to invest in L&D right now?’
It’s:
‘Given the environment we’re operating in, where can well-designed learning and development most quickly strengthen our resilience, accelerate change and improve productivity. How do we measure that impact with the same discipline as any other investment?’
Answer that, and L&D stops being an easy cut, and becomes part of how you keep the business viable, sustainable and ready for whatever comes next.