Your 2027 Training Budget Is a Percentage. That Is the Problem.
For most US retailers, the 2027 budget is being built now, in September and October, before the peak season that will decide whether it survives. Somewhere in that budget is a training line. In most businesses I see, it was set one of two ways: last year plus or minus a few percent, or a share of payroll. Around one percent of payroll is common.
A number with no consequence attached
A percentage of payroll is derived from headcount, not from need. It says nothing about which roles are short of which skills, and nothing about what those gaps are costing the business. So when trading tightens in the first quarter, the training line is the first to go. Nobody can say what will be lost by cutting it, because the number was never connected to anything.
A budget line with no consequence attached is the easiest line in the book to cut. Finance directors are not hostile to training. They are hostile to numbers that cannot explain themselves.
The retailers that protect it
They are not the ones that believe in training more. They are the ones whose training budget is written in the language of the P&L. When the cut is proposed, someone in the room can say what it costs, and the conversation changes.
Three steps to write it differently
- Start with the KPI gaps, not the headcount. Gross margin in buying. Conversion and shrink in stores. Forecast accuracy in planning. Sell-through for the consumer goods sales team. Where is the business below where it should be, and which skills sit behind each gap? That list is the budget, before a single course is chosen.
- Cost the gap, then cost the closing of it. A buying team running one point of margin below plan on $200 million of sales is $2 million a year. A programme that closes half of that gap for a fraction of the amount is a line with a return attached. A return is something a finance director can defend to a board, and will.
- Phase it and measure it. Start in one department where the need and the support are both clear. Report the KPI, not the completion rate. Nobody on a board has ever asked how many people finished a module. They ask what moved.
What this does to the January conversation
A training line built this way rarely gets cut, because cutting it now has a number attached. The question stops being whether the business can afford to train its buyers this year and becomes whether it can afford to leave a point of margin on the table. That is a much easier question to answer.
Over nearly 40 years Martec has built its upskilling approach around exactly this link: learning paths tied to a hard, tangible return on investment and a process to make sure it is achieved. If your 2027 training line is still a percentage, the summary paper at martec-international.com/research is a good place to start rewriting it.
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Posted by Brian Hume
21st October 2026
