Tvarita Consulting Blog

UK: Training Budgets Recession Proof?

Interesting report from David Woods of HR Magazine: 

Three out of four companies are not cutting their training budgets despite the economic downturn.

According to research by training provider Beyond the Box, just under 50% of firms forecast an annual training spend of under £500 per employee; 32% forecast an annual spend of £500-£2,000 for each member of staff; while 25% of companies had predicted training costs for the current financial year at over £10,000 per employee.

Christing Knott, MD of Beyond the Box, said: "With 75% of respondents maintaining a training budget, it is encouraging to see that training is by and large proving recession- proof as companies recognise the need in the current climate to build on their competitive advantage by investing in people as well as keeping motivation and morale high."

But she added: "Budgets are set at a low level and it is obvious that caution is a prevailing factor at the moment."

Source: www.hrmagazine.co.uk

Employee Training: Getting Ready To Win Big Post Recession

Cost-Cutting, Cut-backs, Right Sizing, Down Sizing, Budget Control, Budget Restructuring ...the works. Sound familiar? 

If you aren't already enjoying a glass of nectar with St. Peters, you surely must have heard of or been involved in one of the above. Well, I don't have to tell you that no matter which term you keep your finger on, the context is the same: plug the leaks, save money! 

Now what's the easiest way to save money for most organizations globally? Care to venture a guess?

If your answer was: stop/do away with Training & Development, BINGO! Give yourself a pat on the back! 

Training & Development seemingly is one of the easiest areas for companies to 'mark-off' the list when it comes to deciding how to save money and rein in costs. While this seems like the most natural thing to do during times like these (Read: Times of Recession), many organizations are left playing 'catch-up' once normalcy returns.

This is because organizations which may have continued with skills augmentation exercises of their employees (they may have reduced training budgets but not done away with T&D altogether), never stop building up their people and hence, organizational capabilities, which puts them in a prime position to build quick in-roads into a healthy (but still a little shaky) market, thus creating critical Competitive Advantage. 

So while most companies would be trying to 'resurface' by going on a shopping binge (Read: Recruitments) in order to meet the demands of an economy returning to normalcy, the organizations which have had the foresight to keep developing employee skills will most likely find that they don't necessarily have to wait for quantitative enhancements to their workforce. Rather, their qualitatively superior workforce will help them exploit (in a positive way) the market conditions optimally, while simultaneously shoring up their workforce numbers without sweating. 

I came across this interesting article on The Wall Street Journal Online Edition by Dana Mattioli on how companies are renewing focus on training as they believe that managers and leaders with strong skills will help them move faster along the road to recovery. It's a good read and quite insightful. 

Here it is:

Despite Cutbacks, Firms Invest in Developing Leaders 

Your thoughts on the topic would be appreciated.

Happy Reading!