Learning stipends give L&Ds the opportunity to offer truly flexible and personalized professional development experiences. So, we’ve gone digging to find out:

• How much learning budget different L&D teams are allocating
• How to ensure learning stipends maximize ROI and benefit the business
• How to align the learning budget with the overall learning and development strategy

What are learning stipends?

A learning stipend is a financial allowance given to employees to invest in their professional development. Employees can use the stipends to cover the costs of relevant learning initiatives or resources. These include:

• Online courses, workshops, job-related certifications
• Books, articles, educational materials, and other resources
• Attending industry networking events, seminars, and conferences
• Mentorship programs and coaching sessions

Learning stipends look different depending on the organization. Some offer flexible spending options, while others have stricter criteria and approval processes.

There are no set rules, but most organizations typically hand out learning stipends on a monthly, quarterly, or annual basis.

The benefits of using learning stipends

As L&Ds, our job is to provide employees with flexible and effective learning experiences. Formal learning programs or platforms aren’t always the best way to achieve this goal.

Learning stipends are a welcome move away from this “we’ll decide your learning path for you” mindset. Not only do they give learners autonomy over what and how they learn, but they reward highly engaged employees.

Here’s a roundup of the core benefits.

We know personalized learning works. Learning stipends facilitate a truly tailored approach, making sure you’re investing in the right learning initiatives for each individual in the organization.

Deciding on a learning stipend

Once you’ve confirmed that learning stipends are a worthwhile investment for your organization and made the business case, the next step is defining how they’ll work.

We’ll now cover 4 essential questions to ask your team when deciding on how to structure learning stipends and how they’ll fit into your L&D strategy. 

1. How much should we offer as a learning stipend?

Let’s start with the million-dollar question: What’s a realistic budget for this activity?

The allocated learning budget for this kind of initiative can vary from 250 to 3,500 euros, depending on your industry, company size, location, and organizational goals. 

We’ve put together a database for our fellows to help them benchmark learning stipends and choose a realistic budget.

2. Should we go for a prepaid or reimbursement model?

Once you’ve decided on your allocated budget, the next big question is how your colleagues will pay for their learning initiatives.

The two most common options are prepaid or reimbursement.

Prepaid model

Employees get a predetermined amount of money upfront (often loaded in a virtual card) that they can put toward learning initiatives.

To overcome overspending, companies usually opt for a manager approval flow.

Reimbursement model

Employees front the cost of learning initiatives and then submit the expenses to L&D for reimbursement.

Both options have advantages and disadvantages, so this decision will come down to your company's goals and mindset. 

Keep these questions in mind when making your decision:

• Do you have the administrative resources to sustain a reimbursement model?
• Which option aligns better with your company culture? Prepaid models work best if employee autonomy is a top priority, while a reimbursement model is a smarter option if you need more control over the budget.
• What’s your budget? Do you have the cash flow to cover a prepaid model?
• Which option do the people in your organization prefer?

3. Would individual or team stipends work best for my organization?

The next big question you need to ask is whether individual or team stipends make the most sense for your organization.

Individual learning stipends give everyone a set allocated budget for the learning resources of their choice. Conversely, team stipends offer a collective fund. 

Both have pros and cons. While individual stipends are the fairest approach, some colleagues may not take advantage of this perk. On the other hand, other colleagues may be more engaged learners who would benefit from a slightly bigger budget.

Let’s look at a case study.

Rublon (formerly Clef) uses individual learning stipends

Rublon is a cybersecurity service with its headquarters in Poland. The organization has around 50 employees. It opts for individual learning stipends, giving each employee a set budget to work with. 

Highlights:

• Every Rublon employee has a company budget of $4000 to support any learning activity they want (provided it’s related to their job role)
• While it doesn’t need to be directly linked to their current role, it should help them improve a skill that aligns with their work at Rublon

How it works:

• Employees should discuss expenses in their 1-2-1s to get approval from their manager
• The learning budget resets at the beginning of every calendar year (it doesn’t roll over)
• Employees who join the company after the month of May receive a reduced learning budget ($2000) 
• Employees can dedicate 4 working hours a week to learning projects

Juro’s team learning stipends

Juro is an AI-enabled contract automation platform. It’s based in London and currently has around 33 employees. Here’s how it uses team stipends as part of its L&D strategy.

Highlights:

• Juro keeps some capital in reserve for learning and development activities
• It’s a shared pot that anyone can dip into (as opposed to a per-person budget)
• The department leader monitors the budget 
• For higher-ticket resources, employees must explain how it aligns with their career development

How it works:

• Staff tell their manager and ExCo leader when they want to buy a learning resource 
• The ExCo leader will approve or deny the request
• L&D approval isn’t available to employees on a performance recovery plan
• For requests above $2000, employees are required to repay the money if they leave the company within a year of completing the training

4. Should we allocate the budget depending on tenure?

We’ve seen organizations offer differing learning stipend budgets based on how long the employee has been part of the organization. This usually works by setting a minimum time period of working within the company before colleagues are eligible to claim the benefit.

Let’s look at an example.

The education benefit program at Nylas

Nylas is a US-based Communication Platform-as-a-Service (CPaaS) provider with around 300+ employees. It offers team members an annual learning stipend as part of its education benefit program. 

Highlights:

• Every team member has a $1000 annual stipend to use on any learning resources that will benefit their career growth while at Nylas.
• Employees must work in the company for a minimum of 6 months to be eligible for this benefit
• An employment year is based on the colleague’s start date in the company

How it works:

• Eligible employees submit a request to HR and their manager
• HR checks their education benefit balance (and their compliance with company policy)
• HR approves or rejects the amount depending on whether the application meets policy requirements
• Employees will only get reimbursed for the learning budget if the request is approved by HR and their manager

Setting rules for learning stipends

Like any learning initiative, you’ll need to set the parameters (or rules) clearly. These rules should be completely tailored to your organization.

To help you understand your options, we’ve rounded up the most common questions L&D teams get asked about learning stipends. 

How can I spend my learning stipend?

Your colleagues are going to want to know how they can cash in their learning stipend. So, you’ll need to have a clear policy to share, underscoring:

• The type of learning stipend you’re offering
• What colleagues can use it for (i.e., what it covers)
• The process of requesting or cashing in a learning stipend
• Eligibility rules and requirements

You may also want to consider including personal development resources to give employees more options.

We really like Basecamp’s approach to learning stipends, positioning them as a benefit that enriches employees as a person and as an employee. 

Basecamp’s broad learning stipend

Basecamp is a project management provider with 50+ employees. It offers every team member an annual stipend of $1000 (this is in a 12-month period, not at the start of each calendar year).

Employees can use the stipend for classes that improve their professional or personal lives. That covers everything from taking guitar lessons to gaining a professional certification.

Does my learning stipend expire?

Another common question you’ll receive is about the expiration date of learning stipends. For instance, does the learning stipend run annually from January to December or from the employees’ individual start dates? Can they carry stipends over if they don’t use them within the specified timeframe?

To avoid confusion, have the answers to these questions clearly documented in your policy.

Let’s look at a case study to see how other organizations approach this.

Monito’s training budget

Monito is a Swiss real-time comparison engine. The company currently has around 24+ employees, and it offers them an annual learning stipend. Here’s how the program works.

Highlights:

• Employees get an allowance of up to CHF 1,500 (incl. VAT) per calendar year towards training and professional development expenses 
• Staff can use the budget to cover any learning expenses, as long as they are related to their activity at Monito

How it works:

• The training budget can also be converted into hours, meaning staff can use their working hours instead of personal time to learn
• To use this benefit, employees request training leave time 
• The learning budget is adjusted pro-rata depending on when the employee joins the company
• Employees can report “training budget leftover” at the end of the year if they don’t use the full stipend

While Monito offers employees the chance to roll learning stipends over from one year to the next, Rublon makes it clear that the learning budget resets at the start of every calendar year.

Does someone need to approve my spending?

As we’ve seen in the case studies of Rublon, Nylas, and Juro, some kind of approval system is common when using learning stipends as an employee benefit. That said, it really depends on the model you choose.

If you opt for a reimbursement model, a member of the L&D or HR function will usually need to approve this. 

Approval may be less common for prepaid models, but it can still be beneficial. For instance, managers may want to approve requests to ensure they align with company goals as well as the employee’s individual career development.

What if I buy a subscription with my learning stipend, but then I leave the company? Can I keep the subscription?

It’s likely that some employees will leave the company before using their learning stipend (or while they’re still enjoying it). As a result, you need to be prepared to answer the question: “What happens to my learning stipend”?

Your documentation should clearly state what happens if an employee leaves the company while they still have an active subscription or training program.

Is there any scenario in which I need to pay back the money?

There may be some specific examples when an employee could need to repay the learning stipend. So, it’s important to set clear guidelines around this process from the get-go.

We’ve already seen an example of this in the Juro case study. If an employee requests a learning budget that exceeds $2000 and leaves the company within a year of completing the training, they are required to pay the amount.

Deeson also has a clear policy on this.

Deeson’s Professional Development Program (PDP)

Deeson is a UK-based digital agency with around 20+ employees. It offers unlimited learning stipends for its team with crystal-clear conditions surrounding repayment. 

Highlights:

• Every team member has an unlimited training budget (managed through the PDP scheme)
• The scheme is a structured self-reflection process that each colleague undergoes annually with their line manager
• The process looks at 360 feedback and the team member’s career ambitions to set goals
• There are no limits on what can be included in a PDP (as long as it helps team members develop and they can undertake it alongside their job role)

How repayment works: 

• Deeson asks employees to repay some of the training budget (around 50%) for learning activities that cost £500+ if they leave the company within 2 years of completion
• Deeson asks team members to repay the full cost of learning activities if they leave before or while completing the initiative
• Deeson asks team members to repay the full cost of training if they leave within a year of completing the training

Supporting your employees in spending their learning stipend efficiently

Handing out a stipend may be enough for some employees who already know how they want to use it to develop their careers. But it’s not realistic to expect all or even the majority of your team members to be so proactive. 

Most of the time, learning specialists need to jump in and support employees to make sure they invest the stipend wisely. 

Here are 3 ways you can offer that support to employees across the organization.

1. Plan a marketing campaign about learning stipends after your performance review cycle

Adoption starts with a strong marketing campaign. Employees need to first be aware of the learning stipends and how they work.

The best time to launch your campaign is directly after your performance review cycle. Employees have just received feedback and professional development goals, making it an ideal time to consider potential learning activities.

Your campaign should connect the dots between employees’ current performance and how the learning stipends can propel them forward.

2. Schedule open hours for career conversations and offer recommendations

The best way you can support employees in using their learning stipends is to offer your time. Scheduling open hours for career conversations opens the door for your colleagues to ask for guidance.

They can come to you to voice any concerns or anxiety or simply for support as they go through the process.

Wonder’s coach recommendation program is an excellent example of this in action.

Wonder’s employee-driven recommendation program

Wonder is a creative collaboration software provider based in Berlin. It offers all team members a personal development budget ranging between 1,000 and 4,000 euros (based on set criteria).

Employees can use the budget for anything that isn’t related to their core tasks - relevant conferences and training courses are covered independently. 

The most popular use of the budget is coaching. Employees can reach out to the L&D team to get recommendations for coaches in Berlin.

3. Link the learning stipend to your individual development plans

For employees to derive the maximum value from learning stipends, it’s our job as L&Ds to create a link between them and each employee’s individual development plan. The stronger this connection is, the more likely your colleagues are to understand the benefits.

Once they recognize how the learning stipends directly impact their career development, they will be more motivated and confident to use them.

Let’s turn our attention back to a case study we saw earlier.

Deeson’s PDP program links stipends to individual career goals

Deeson’s PDP program is a great example of integrating learning stipends with employee goals. The process incorporates 360 feedback to help team members understand their opportunities for development. It also identifies what each individual needs to excel in their current role and achieve their long-term career goals.

Once PDP is finalized, every team member is responsible for planning their own development activities for the next year.

Marketing your learning stipend

When implementing learning stipends, two of the biggest barriers you’ll face are: 

• A lack of awareness
• A lack of education

Employees won’t know about the initiative, and those who know it exists don’t fully understand how it works.

A solid marketing plan can get you over those two hurdles. Here are some best practices.

1. Create a yearly plan to promote the learning stipend

A common mistake many L&Ds fall into is neglecting a longer-term marketing plan. They go hard on the initial promotion and during other “peak” times like performance review cycles, then take their foot off the gas.

The best way to keep learning stipends front-of-mind in your organization is to define a yearly promotion plan. Regular nudges throughout the year will be much more effective than two big pushes and then radio silence. 

As part of this plan, consider when people are most likely to start new initiatives and do some extra promotion at these times.

Sending personalized final reminders can also help mobilize employees to take action.

2. Your stand-alone learning stipend landing page

Creating a landing page for learning stipends can drive engagement and convert interested browsers into buyers.

Why? Because a landing page creates a central hub for you to promote learning stipends, detail the process, share the benefits, and compel employees with a strong call to action.

You can also add employee testimonials and FAQs to help solve the objections of any employees who are on the fence.

3. Use internal influencers to promote the learning stipend

If we’ve learned anything from marketers, it’s that influencer campaigns drive results. Creating your own internal campaign to promote the learning stipend can help drive the activity in a number of ways:

• You can raise awareness across the organization
• It works as social proof and can reduce anxiety 
• It creates FOMO and encourages employees to take action “because everyone else is”
• Employees can learn about the initiative from their peers in a more informal setting

4. Advertise your learning stipend as part of employer branding efforts

The final step is to make sure your recruitment colleagues have access to information about the learning stipends and how they work. After all, your recruitment team is on the front line. 

The more knowledge they have about the stipends, the more effectively they can promote them to potential candidates during the recruitment process.

Measuring the ROI of learning stipends

One of the most common questions L&Ds have about learning stipends is how to measure their impact. And while there’s no denying it can be tricky to evaluate ROI for this activity, there are some tactics you can try.

1. Ask about your learning stipend everywhere

The best way to gauge the impact of learning stipends is to ask your colleagues. At every chance you get. The more feedback you can gather, the easier it will become to see the effect the initiative is having on your people.

That means asking employees about the stipends during engagement surveys, 1-2-1s, informal conversations, and exit interviews. 

2. Send a survey to those just accessing their learning stipend

One of the best times to ask employees about their learning stipends is right after they’ve used them. So, set up a feedback survey to send to your colleagues immediately after they access their stipends. 

Not only are they more likely to engage (because they’ve just used the benefit), but their experience will be fresh in their minds. 

3. Follow up with a quarterly survey for those who’ve spent their learning stipend

Try sending feedback surveys every quarter to best evaluate how the stipends are impacting your teams. This survey should only be sent to the employees who have used their stipend, with the purpose of understanding how it has benefited them.

Alternatively, you could send a survey to those who didn’t use their learning stipend to compare differences in overall employee engagement and satisfaction. This could give you valuable insight into potential barriers to adoption.

4. Get used to uncertainty

With learning activities like stipends, it’s inevitable that there will always be some uncertainty about the ROI. We can measure job performance data and employee feedback (similar to how Deeson does during PDPs), but it’s hard to attribute results directly to the stipends. 

So, really, all we can do as L&Ds is get comfortable with not ever fully knowing how deep the impact of the initiative is. 

How to align the learning budget with your overall L&D strategy

One of the most common questions about stipends is how they fit into the broader L&D strategy. These 4 best practices can help you integrate them with other L&D-led initiatives. 

1. Align the initiative with your wider goals

The biggest lesson L&Ds should take away from this section is that learning stipends must support broader objectives.

So, start by considering your key goals. 

Let’s say your goals are related to employee ownership of learning. Or career development. Maybe even staff retention.

Think about how the learning stipends contribute to achieving those goals. How can you measure their impact? 

2. The learning stipend should complement L&D-led initiatives

Try to link learning stipends to other activities that fit into your L&D strategy. Let’s take leadership development as an example. 

You can encourage leaders to spend their stipend on coaching sessions, which will help them meet their individual professional goals (as well as organizational ones).

Curating learning paths for different goals or strategies is another way to ensure alignment. For instance, you can create paths for different career goals. Then, employees can buy the recommended resources with their stipends.

3. Set guidelines for how the learning stipend is spent 

As L&Ds, we want to gently guide our colleagues toward spending their budgets on learning activities that are relevant to the organization. That way, we ensure every employee gets the most value out of their stipends while collectively working towards organizational goals. 

There are a couple of ways we can achieve this:

⇢ Establish strict criteria on how employees can spend the learning budget 

⇢ Set a rule that employees should spend a certain percentage of the budget on activities that are relevant to the organization (they can spend the rest on a wider range of initiatives)  

4. Make sure the learning stipends don't live in isolation

Let’s reiterate a key point: learning stipends shouldn’t be a stand-alone initiative. The best way to align them with broader company goals is to link them to other L&D or HR processes. 

We’ve seen some excellent case studies throughout this guide where companies have linked the learning budgets to performance management processes or IDPs. This ensures the longevity of the initiative and increases its impact.

The most common challenges of managing learning stipends

As with any L&D activity, you’re going to run into some challenges when managing learning stipends and the corresponding processes. 

Here are the 4 biggest hurdles you’ll have to overcome.

1. Your colleagues are not spending their learning stipends

What happens if your colleagues aren’t spending their learning stipends? Before you pull the plug on the initiative altogether, you need to get drill down to the root cause.

Why?

Start by surveying your colleagues to understand why they aren’t using their stipends. Based on their answers, define a strategy to change that behavior. 

In most cases, the main reasons behind poor adoption are issues with the fundamentals (lack of awareness, complex processes, etc). We’ll touch on those more below. 

Once you’ve identified the root cause, you can implement changes to address the issues and encourage participation.

Let’s look at a case study.

Meltano’s dedicated monthly stipend 

Meltano is an open-source data movement platform. It offers its fully remote, global team a monthly stipend for self-guided learning. Here’s how it encourages employees to participate.

‍Highlights:

• Every team member gets a $250/month stipend for self-guided learning (like Code Academy, Coursera, Plato, etc.)
• Meltano encourages team members to allocate time during their work week for skill development and industry-specific deep dives
• Those who report to the CEO have the option to work with a self-selected coach or leadership course

Offering a monthly stipend helps create a continuous learning culture in the organization, holding team members accountable for driving their professional development.

2. Tracking the spending of learning stipends

The larger your organization, the more challenging it’s going to be to track usage. Smaller teams can get away with manually recording stipend spending through a ticket queue or similar process, but this isn’t realistic for bigger teams.

That said, you still need that data. This is where implementing a proper budget tracking process comes into play. 

For example, managers may take control of approving their team’s spending (in line with the policy). They can then submit requests for exceptional cases to be reviewed by HR and L&D. 

3. Ensuring fairness and equity

Even when offering individual stipends, exceptions will crop up. Some employees may request additional budget, and you’ll need a policy in place to make sure these requests are handled fairly.

Be transparent about your selection criteria and review your decisions thoroughly to look out for signs of bias.

4. Evaluating the ROI of offering learning stipends

As we’ve already seen above, measuring the ROI of learning stipends is a significant challenge. Establishing SMART goals with clearly defined metrics can help you overcome this.  

Tactics for increasing individual budget spending

Many companies offer learning stipends that employees never use. This can lead L&D teams to question the initiative. Others default to “How can we increase spending?”

We shouldn’t increase spending just for the sake of it. Any time we spend company money (and our people’s time and energy) it should be meaningful.

So, before you consider upping your learning budget, make sure you’re nailing the fundamentals first. 

1. Identify the main barriers

If you’re considering increasing individual budget spending because many employees aren’t using it, press pause for a second.

Let’s first determine what the main blockers are for your colleagues and focus on fixing these first. These are the most common issues to overcome:

• Lack of clarity surrounding the process
• Overcomplicated processes
• Employees need more support
• Lack of awareness about the learning stipends and their benefits
• Employees don’t have the mental capacity to take on additional learning activities

Only once you have solved these fundamental behavior barriers should you start coming up with more creative solutions.

2. Brainstorm creative solutions to increase adoption 

Now that you have removed obvious roadblocks for your colleagues, you can start thinking of more creative ways to encourage them to use their learning stipends.

There’s a myriad of ways you can drive engagement, depending on your organizational structure. 

• Collect social proof from other employees who have successfully used their stipends
• Hold open hours to raise awareness, reduce friction, and offer support 
• Create learning awards in your organization to recognize colleagues who use their learning budget
• Provide a pre-approved list of conferences, courses, and resources that come recommended by colleagues with similar roles (this can include items that align with OKRs)

3. Remember bigger (budget) doesn’t always mean better

As companies grow, learning stipends tend to become smaller. Interestingly, this can make the initiative more impactful because employees have to be more intentional with how they spend their allowance.

It’s inevitable that not everyone will use their budget, meaning you can approve exceptions for higher-cost items (like in-person conferences) on a case-by-case basis.

According to Learning and Development Lead, Shaira Khidirova, the mindset around learning budgets is shifting,

“The key insight for L&D is shifting the focus from ‘spending company money’ to genuinely improving performance - teaching employees to start with ‘Why’ not ‘How much’.”

4. Build learner-led communities

Focusing your efforts on community building around learning resources can increase the impact of activities without hiking up spending.

You can achieve this by implementing activities like lunch and learns, dedicated Slack channels, and peer study groups. 

By letting learners’ interests guide them and empowering managers to lead learning communities, you can effectively increase the impact of the stipend program.

Take-home lessons

Learning stipends offer your colleagues a truly flexible and personalized career development opportunity. That said, as L&Ds, we need to understand how best to manage this kind of initiative. Understanding the best practices for budget allocation, measuring ROI, and aligning stipends with your wider L&D strategy is essential.

As the case studies show, there’s also a strong need for clear communication on how learning stipends work in your organization. Your colleagues will have questions about the processes, policies, and logistics of using this benefit. So, a detailed policy is a must.

We hope this guide helps you manage your future learning budget and align these activities with your wider organizational goals.