Training and Development
In difficult economic times, companies must prioritize where to cut costs and where to invest in maximizing capabilities. In an effort to meet rising operational costs, many companies have to do more with less. Encouraging employees to increase production with fewer resources suggests training employees to meet increased work demands. Yet, many organizations are either reducing or halting training and development activities.
The Big Cut
Many business leaders find it hard to justify training expenditures when the return on investment isn't always obvious. Consequently, the average training expenditure went from $1,202 per employee in 2007 to $1,075 in 2008, and the corporate training market experienced the biggest decrease in a decade; from $58.5 billion in 2007 to $56.2 billion in 2008 (Frauenheim, 2009).
According to Westcott (2008), a recent survey of 84 training professionals from 19 different industries found that in tough economic times, “training is often one of the first things to go” (para, 2). Survey results revealed that almost half (48%) of respondents expected reduced training budgets in 2009. Despite budget cuts, employee learning and development is critical to an organization’s overall talent strategy.
Leveraging the Dollar
Not withstanding the economic downturn, companies that continue to invest in employee training have focused on leveraging training dollars by offering e-learning courses. E-learning is a less expensive alternative to instructor-led training and allows employees from all over the world to enroll.
Companies are also aligning training with their mission and goals. Rather than offering a myriad of general training courses, companies are providing training geared toward increasing revenue, decreasing costs and improving customer relationships. Mission-driven training ensures a focus on the company’s highest priority activities.
On the Job
Another cost-effective emerging trend is informal training where employees gain on-the-job education from managers, peers and other internal resources. Brown bag lunches, teleconferences, webinars and cross-training are some of the ways companies are fostering a learning culture while downsizing training budgets. Informal training provides an opportunity for employees to increase their knowledge outside the traditional learning or training event.
The economic downturn has forced companies to develop creative ways to train and develop employees. Talented employees seek growth opportunities despite the economic climate, and if dissatisfied, will look for other things to do. Organizations must continue to offer learning opportunities to retain the best and the brightest.