The skills investment dilemma: Why cutting L&D budgets now may cost more further down the line

The timing of these cuts is particularly concerning given the pace of technological change and how it’s impacting everyone’s ways of working. Recent research shows that 94% of global enterprises are already using AI in some capacity, with 60% expecting significant transformation within two years.  

The performance gap is already evident. Companies achieving the highest AI returns (those seeing 37% productivity improvements) are spending 25% of their IT budgets on artificial intelligence, compared to a 10% average. They are also investing heavily in what executives term "AI literacy," recognising that technological competence is becoming essential across all roles, not just technical positions.  

Take action:  

Invest now in AI literacy programmes that reach beyond IT. Build cross-functional training that equips employees at all levels to understand, collaborate with, and leverage AI tools. This ensures your workforce can adapt to evolving technologies and drive innovation, not just react to it.  

Cost-driven consolidation of training providers appears financially prudent, but the data suggests more nuanced approaches work better. According to Fosway Group’s 2025 9-Grid™ for Learning Systems, high-performing organisations are increasingly leveraging a diverse ecosystem of learning platforms.    

The pattern found here suggests that complex business environments demand more than simplified procurement strategies, they require intelligent, integrated solutions. This doesn’t necessarily mean reducing the number of tools you use, but rather ensuring those tools work seamlessly together. When HR systems and learning platforms are designed to integrate, they can share data, streamline processes, and deliver a more cohesive employee experience.  

We focus on building connected solutions that provide upskilling and development opportunities across the employee lifecycle. This helps organisations simplify access to technology without compromising on capability or performance.  

Take action:   

Audit your current learning platforms and providers. Rather than simplifying for simplicity’s sake, invest in systems that integrate well and support personalised, scalable learning. A connected ecosystem enhances the learner experience and drives better outcomes without sacrificing efficiency.  

In times of uncertainty, it’s tempting to focus on immediate cost savings - but when it comes to learning and development, this instinct can be dangerously short-sighted. Cutting L&D may reduce short-term spend, but it risks long-term capability loss, skill fade, and disengagement across the workforce. The result? A slower recovery, a weaker competitive position, and a workforce that feels undervalued and underprepared.  

Now more than ever, L&D must have a seat at the strategic table. It’s not just about training; it’s about workforce investment and building the capabilities that will define your organisation’s future. From AI fluency to adaptive leadership, the skills your people need tomorrow must be developed today.