You’re building next year’s people budget. The CFO asks the only question CFOs ask: “What does everyone else spend?”

You need your number sourced and defensible. Here’s the short answer. Average L&D spend sits at roughly $1,054 per employee per year in the latest industry data. Well-run tech companies budget $1,500 to $3,000 for the people they most need to keep. But the average is the least useful number in this post.

Because the companies winning the talent war don’t spend more across the board. They spend differently: concentrated on managers, weighted toward practice over content, and defended with retention math instead of hope. This guide gives you the benchmarks, the allocation model behind programs like new manager training, and the numbers that survive a CFO conversation.

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The Benchmarks: What Companies Actually Spend

Start with the published data, because your CFO will.

According to ATD’s 2025 State of the Industry report, organizations spent an average of $1,054 per employee on direct learning costs in 2024, which works out to 2.9% of revenue, the highest ratio in five years.

A note on denominators, because this is where benchmark posts mislead you. The 2025 Training Industry Report breaks spending down by company size, but it measures per learner, not per employee. A learner is someone who actually took training; per employee divides across everyone on payroll. The two numbers aren’t interchangeable.

On a per-learner basis, smaller companies spend more than large ones: the 2025 Training Industry Report puts small companies at $1,091 per learner, midsize at $782, and large at $468, against an overall average of $874 per learner. The reason is structural, not generosity. Small companies can’t amortize a learning platform across 50,000 people, and they feel every bad manager immediately. If you’re a 200-person scale-up benchmarking against a big company’s per-head figure, you’re benchmarking against economies of scale you don’t have.

Two more numbers worth having in your back pocket, both from ATD: employees received an average of 13.7 formal learning hours in 2024, down from 17.4 the year before. And the cost per learning hour hit $165, up 34% year over year (from $123), which tells you content is getting more expensive while attention stays flat.

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Where Tech Companies Sit

Industry analyses put tech and professional services near the top of per-employee spend. Retail and hospitality sit at the bottom. For a venture-backed tech company between Series A and C, the practical range we see is $1,500 to $3,000 per employee per year. The top quartile puts far more than that into managers and senior ICs.

Why higher than average? Talent density math. Laszlo Bock’s work at Google puts top performers at three to ten times the impact of average ones. When your 40 engineers carry your entire product bet, the downside of an undeveloped manager is not an HR metric. It’s roadmap risk.

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The Average Is a Trap: Spend Concentration Beats Spend Level

Here’s what the benchmark reports won’t tell you. Two companies can spend an identical $1,500 per employee and get wildly different outcomes. One spread it evenly. The other stacked it where the variance lives.

Gallup’s research gives you the concentration target: managers account for 70% of the variance in team engagement. And manager engagement itself has fallen to 22%, among the lowest readings in over a decade. Your managers are your highest-impact group. They’re also your most neglected one.

So the question isn’t “what should we spend per employee?” It’s “what should we spend per manager, per senior IC, and per everyone else?” Averages hide that decision, and the decision is the whole game.

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A Concentration Model That Works

Take a 200-person company at $1,600 per employee: a $320K annual pool. Even spread gives everyone a conference ticket and a course library nobody opens. Stacked spend looks like this:

That allocation feels unequal because it is. It’s also how the outcome data says returns behave. If you want the full financial argument for the manager-heavy split, we’ve laid out the ROI case for leadership development with the retention math worked through.

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What “Top Tech Company” Spending Actually Buys

The famous benchmarks, the $8,000-per-employee education budgets you see on job postings, are mostly tuition-style perks. Useful for recruiting. Nearly useless for team performance. Look instead at what high-performing companies buy with their core L&D dollars.

First, manager capability, bought as programs rather than content. A library license costs $30 per person per month and changes almost nothing. Information was never the constraint. Cohort programs with practice, feedback, and peer pressure cost more per head. They’re also the only format we’ve seen change how someone runs a 1:1 by Monday. If you’re comparing formats, this buyer’s guide to new manager training breaks down what each option really costs.

Second, team development, not just individual growth. In Kotter and Heskett’s Corporate Culture and Performance (1992), firms with strong, performance-aligned cultures grew net income 756% over eleven years, against 1% for firms without them. The study is old, but the mechanism holds, and culture forms in teams. So top companies spend on offsites, team workshops, and diagnostics like our Six Levels assessment, which treat the team as the unit of improvement.

Third, measurement. A slice of the budget goes to proving the rest of it worked: engagement scores by manager, regrettable attrition by team, promotion readiness. This is the spend that protects next year’s spend.

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Defending the Number to Your CFO

You will not win this conversation with benchmarks alone. “Everyone else spends $1,054” invites the reply “then we’ll spend $900 and be nearly everyone else.” Anchor the number to costs your CFO already believes instead.

Run this math for your own company before the budget meeting. One regretted departure costs 50% to 200% of the person’s salary in recruiting, ramp, and lost momentum. Take your engineer average, say $150K, and a conservative multiplier: $75K per regretted exit. Gallup’s data ties a large share of those exits to the manager relationship.

Now the sentence that changes the meeting: “Our proposed manager development line is $150K. If it prevents two regretted departures out of the eleven we had last year, it’s paid for. Here’s how we’ll measure whether it did.” You’ve converted a cost line into an insurance policy with a claims history.

Three supporting moves that strengthen the case:

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Try This: The One-Page Budget Audit

Before you finalize next year’s number, spend 30 minutes on this exercise. Pull last year’s actual L&D spend and sort every dollar into four buckets: managers, critical ICs, everyone else, and measurement.

Most people leaders we work with find their spend inverts the Gallup logic. Sixty or seventy percent went to broad content access that usage logs say nobody touched. Managers got a webinar. If your audit shows the same inversion, you don’t need a bigger budget next year. You need a reallocation, and reallocation is an easier pitch than an increase.

Then pressure-test the manager line. If a leadership development partner can’t tell you how they’d prove impact on your two metrics, they’re selling content, not outcomes.

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Spend Like Variance Exists

Back to the CFO’s question: “What does everyone else spend?” Give the honest answer. Around $1,054 on average, $1,500 to $3,000 in well-run tech, and the number matters less than its shape.

Companies that treat L&D spend per employee as an even spread buy a perk. Companies that concentrate it on the 15% of people who control 70% of engagement variance buy performance. Same budget line. Different company two years later.

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Frequently Asked Questions:

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From the Blog

• What Tech Companies Actually Spend on Leadership Development (2026 Benchmarks) — The broader benchmark picture across the industry.
• The Real ROI of Leadership Development (And How to Prove It to Your CFO) — The full financial case, with the retention math.
• The Real Cost of Regrettable Attrition (And Why It Starts With Your Managers) — The number that makes the budget pay for itself.