The global economy is experiencing an economic downturn that is having a major impact on all industries and all organisations. This has resulted in many organisation cutting their training budgets and overall learning and development spend. But is this the correct strategy in a time of downturn?
The answer is a resounding NO. Cutting the training budget may be easy and in some unfortunate cases, where the value of training has not been demonstrated, even justifiable. However, when you cut your training budget you are sending three clear messages:
- You don’t really value training as a strategic tool that adds value, but see it as a benefit that can be easily cut. Intrinsically you do not believe in the ideas of a ‘learning organisation’ and ‘talent management’ and ‘competency development’ that you have promoted in the past. The message this send to your workforce will have serious ramifications many years after the economic downturn is over.
- The training you invested in in the past did not return enough return on our investment (ROI), or you didn’t bother to measure and demonstrate it. Therefore, training you conducted in the past was a poor investment. If, however you have demonstrated that training delivers a strong ROI, why would you cut it when times are tough? All economic intelligence would suggest you would do the opposite.
- You will ignore the empirical research that shows that your best workers, and those who will find it easiest to find other jobs, value training over all other factors including salary, conditions and even job security. This is particularly true for highly valued Nationals in the Middle East. Cut training too much and you just might lose you best people to those who decide to invest in training at this time.
I am not suggesting that no training expenditure should be cut. There are examples of ridiculous spend on courses run without proper needs analysis conducted, established educational objectives and no evaluation of results. In many cases this type of training should have been cut when times were booming. But, training is more than these poor examples. Training has the potential to transform individuals, teams and organisations.
Ask yourself, do you see training an investment or a benefit? Is your training aligned with your overall organisational and HR strategy and properly evaluated for its ROI? Are you courageous enough to make the business case to expand your training budget during an economic downturn?