News story

L&D budgets getting squeezed

ILX GroupLearning News

A new report from ILX Group considers the challenges, priorities and opportunities facing organisations in 2023 and says 50% of training programmes are not effective due to budget constraints.


Organisations are facing many challenges this year, as evidenced by a recent research report 'L&D in 2023: Challenges, Priorities and Opportunities' released by ILX Group. The training provider surveyed 250 business, HR, and L&D leaders to understand their key training challenges and priorities, as well as some of the overarching trends in skills development this year.

Impacts of the cost-of-living crisis and other related issues

The cost-of-living crisis and other related issues, such as rising inflation, is the biggest issue facing 76% of organisations this year. Operating costs have risen, consumer spending is squeezed, and employees are looking for support in the form of higher wages and increasing benefits.

While it may seem a good way to make cost savings, reducing L&D budgets will have a detrimental impact, in fact 50% of organisations said their training programmes are not effective due to budget constraints. But by investing in L&D, organisations can upskill and cross-skill existing employees, improving output and increasing revenue by filling skill gaps (a challenge facing 66% of organisations).

The most in-demand skills in 2023

Given the above, it's no surprise that a primary priority for 44% of organisations is increasing efficiencies, improving productivity, and reducing costs. Investing in skill development is one way to achieve this.

In 2023, these are the top skill areas that those surveyed said they would be investing L&D budgets in:

  1. Management and leadership (67%)
  2. Digital marketing (66%)
  3. AI / Sustainable development / Big data and analytics (64%)

When compared with ILX's 2022 research report, the most in-demand skill remains the same, but the interesting shifts are further down the list. Notably, demand for digital marketing and sustainable development has increased significantly, with the former climbing from ninth place in 2022 to second, and the latter up from tenth.

As shown, digital skills remain a top investment area, suggesting organisations are continuing to carry out digital transformation and embracing new technology. This trend is also evidenced by the fact that digital transformation is the top driver for L&D within 39% of organisations this year.

How will L&D enable organisations in 2023?

Russell Kenrick, Managing Director of ILX Group, commented: "Our research has shown the value of investing in development programmes. Training with ILX can have huge benefits for an organisation, helping teams to upskill and cross skill, expand their capabilities, improve collaboration and increase productivity.

"At a time when businesses are struggling to attract new talent, investing in training programmes and career development will not only help retain valuable talent, but also will improve employee impact and effectiveness."

Download the report: L&D in 2023 - Challenges, Priorities and Opportunities