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					Training and Development in Recessionary Times

What type of training should I be doing now in the recession?

When the economy is in a recession and costs are being cut in many businesses, there is
always a temptation to cut spending on training. This ‘saving ‘ can look like a simple way
to cut costs quickly, but nothing could be further from the truth. Research in 2007 shows
that companies that don’t train are two and a half times more likely to fail than those that
do. It is in the current environment, more than ever that we need people who are
developed, trained, committed, motivated, innovative and driven in what they do. This is
one of the vital keys to ensuring businesses survive and stay competitive when the odds
are against them, together critically with being ready to embrace the opportunities as the
upturn eventually starts to happen.

A Report by the International Leadership organisation, Common Purpose, found that
97% of the companies they surveyed said that cutting their spending on training during a
previous downturn had negative consequences on the business in both the short and long
term, with a critical loss of top talent being a significant trend reported. Evidence shows
that those companies that invest in the area of training during a down turn are better
placed to grow the business as soon as the economy starts to recover. Cutting this cost in
the short term is a serious mistake that will cost organisations dearly in the future, so all
training professionals need to continue influencing decision makers in the business as to
the value and contribution of focused training and development initiatives during this

An example of a progressive, innovative company that survived the dramatic fall in their
business after 9/ 11 and brought the company back to profitability when many
competitors went out of business, was South West Airlines. A series of major cuts were
initiated after the dramatic slump in the business which followed the 9/11 disaster.
However, Herb Kelliher, CEO, resisted cutting the training budget even at the bleakest
time for the organisation. The company’s University for People with a 3 million dollar
annual budget kept its full funding as the criticality of all Training and Development
activity was recognised as being central to the success of the company at this time. The
budget for training was actually increased with targeted programmes designed to help
staff deal with uncertainty being designed and run. Keeping morale up was seen as a
critical role of the training department at this time as staff feared losing their jobs as well
as being unsure of how to deal with security threats overall in the airline industry. As our
economy is in one of the worst recessions we have seen, helping those survivors in the
organisation to deal with fear and uncertainty will have a direct impact on productivity,
customer service and innovation. Businesses also need to focus on front line management
training as these are the staff with the most influence on the critical people closest to the
What are the Top 7 Tips for Training Professionals in Today’s Business

1.      Encourage your Organisation to Innovate and Use the Talent and Ideas of
        your People
Recessions can be a great time for the collective intelligence of every member of your
organisation to be tapped into. Training and development professionals need to design
programmes that gather ideas from those in the business as part of the ongoing T/ D
strategy. Companies that survive and do well are those that spot opportunities and have
the flexibility to act quickly as they are identified. A thinking culture is one that every
organisation needs to foster, now more than ever, where ideas on cost savings, new
products, better services, improved communication and better business efficiency become
central to the way that every member of staff thinks and acts. Downturns are about
psychology as much as the business survival. During previous recessions innovations
such as the Frequent Flyer Programme, Fortune magazine and Federal Express were
born. Courageous organisations are those that listen to their people, encourage innovation
and are willing to take risks to make things happen.

2.       Leaders need to Lead
A lack of visible leadership in an organisation that is dealing with a recession adds to the
sense of fear that is almost palpable in today’s business climate. The CEO is the person
responsible for generating and maintaining energy and enthusiasm among those in the
business in a time when there is a huge amount of uncertainty and fear. People need to
feel confident in their leader, which includes their line manager ; they need to believe
he/she believes the company is going to survive and that they will keep their jobs. They
need to be clear how they can help and what is expected of them as well as feeling that
they are part of the same team working on the survival and success of the company.
Developing the skills and strategies of leaders throughout the business is a critical role for
the T/D profession at a time of economic downturn when true leadership will help
companies to spot opportunities and to think laterally. When you think of today’s
business culture, the analogy of passengers on a flight comes to mind. When the plane
journey gets bumpy, every passenger wants to hear from the Captain immediately, even it
means fastening seat belts for turbulence ahead. Training and Development is essential in
order to ensure the leaders in the business lead their people in ways that reduce fear and
ensure real buy in and involvement. Leaders lead people out of the darkness, they don’t
leave them sitting in it. Now, more than ever, senior management need to believe in the
criticality of developing new leadership skills and strategies among all levels in the
organisation so that staff who are fearful about their jobs can be motivated, included and
inspired by those they follow.

3.       Top Talent Retention
If training budgets are cut during a time of recession, talented people will see the
corporate message that their development and growth can wait for a while, when in fact it
is this group of people who, if invested in during tough times, will spot the growth
opportunities for the business and will motivate those around them, accelerating the
organisation out of the economic down turn. Training and Development interventions
need to focus on the needs of this group, specifically linking the support they need with
the new strategic direction of the organisation in a planned way. Targeted development
opportunities for this sector of the workforce needs to reflect the needs they are
identifying in the current climate and offer practical, current solutions that will make a
real difference to the individual and the organisation.

4.       Convince Senior Management of the need to be strategic in the area of
Training and Development at this time
According to a Report by Cranfield University called ‘ Nurturing Talent’, employers who
make strategic decisions in their Training and Development plans during a downturn, are
better placed to grow their businesses during this period as well as when the economy
starts to recover. Many organisations react to external events by either cutting spend or
running a range of ad hoc training events which may be aimed at helping staff deal with
the new reality, but because they are not linked to any real strategy, their impact is short
term and minimal. Those companies that take a strategic view of the Training and
Development needs of their business, are much better placed to bring staff with them
during hard times, having higher levels of overall engagement throughout this period, all
of which has a positive impact on the bottom line in the business.

5.      Grow your own Talent
The development and growth of potential from within the business gives organisations
that invest in training in a serious way, a clear competitive advantage during a recession.
The Cranfield University ‘Nurturing Talent’ Report demonstrates the cost savings
involved in developing people internally for roles in the organisation rather than selecting
form externally during recessionary times. This includes training and development
programmes, employee coaching, staff mentoring and job enrichment as ways of
stretching current staff to take up new roles as the organisation may need to downsize or
to expand the jobs they currently hold. As recruitment stops or slows down dramatically,
organisations need to recognise that nurturing staff is a vital strategy for the business in
terms of succession planning, cost savings and boosting morale.

6.      Deliver Real Results for Real Times
To survive the current challenge, many organisations will have to review and make
fundamental changes to their current strategy. This requires leadership teams to ask:
Where are we now?
Where are we going?
How are we going to get there?
Effective, strategic Training and Development plans can help those in the business to take
the time to refocus the business strategy on the new economic reality. By encouraging the
senior team to undertake this type of focused strategic training intervention, there is
renewed clarity about key business goals which then need to be communicated to the
entire workforce. All Training and Development interventions have to then link into this
strategy in a planned and focused way with a critical eye on the return on investment that
every initiative makes. Although, this can be difficult to quantify, there is a real need to
break down and measure the value to the business, ensuring that the areas that will bring
the most advantages are prioritised such as debt collection, selling, creativity,
downsizing, leadership, managing in changing times etc. So, selecting the right training
and following up to ensure the learning is applied back at work is critical. Managers must
take responsibility to make sure their trainees are adequately briefed before attending
programmes, agree learning outcomes and schedule regular follow ups post training to
ensure lessons learned are put into practice.

7.      Flexible and Creative Delivery Methodologies
The delivery of training interventions needs to be flexible in a downturn. Methods such
as distance learning, coaching, mentoring, buddying, using internal trainers and venues,
running ‘bite sized’ learning events of 2-3 hours, should all be considered as ways of
delivering on business goals. Training specialists also need to prioritise development
needs, using the pareto principle to identify which percentage of training interventions
account for the largest pay offs in terms of business results. The results and successes in
these areas also need to be publicised to ensure all staff are clear as to the value of
spending time and resources in this way.

There is now a realisation that no sector is protected from job losses, so the concept of
lifelong learning is even more relevant today than before. As our economy struggles,
employers need workers who can cope with frequent change and lead the way in all areas
of innovation. At the same time, employees need higher skill levels for their personal
advancement as well as to enhance their contribution to organisational success. Training
and Development has a critical role in recessionary times in ensuring the business doesn’t
get caught up in short term goals and solutions. The business case for Training and
Development in this type of economy is clear and has proven itself in the past.
Progressive organisations are those that really value the role their people can make to
their survival, helping them to seize the opportunities that may arise and ensuring they
grow or maintain market share during and after the downturn. Keeping talented people,
generating a ‘thinking culture’, developing leaders at all levels in the business, being
flexible in how training is delivered and ensuring there is a strategy that links to the
overall business goals are some of the key drivers of people development in today’s
market. Organisations that can see the long term value of investing in their people during
tough times show real leadership at a time when so many people need clarity, focus and
to see the road ahead.

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