Five Tips for Improving Employee Training and Development During a Recession or Economic Downturn
Reading the financial headlines, things are looking pretty bleak out there in the business world. Jobs are being cut, large investment banks on the brink of disaster are being bailed out, and home foreclosures are still rising. With each headline, more and more people are grabbing their mallets and beating on the "gloom and doom" recession drum.
Technical economists will tell you a recession is inevitable as the yield curve inverted midway into 2006 with 2-year bonds yielding more than 10-year bonds and staying that way into the beginning of 2007. This is seen by many as a leading indicator of a coming recession. Each time the yield curve has inverted since WWI a recession occurred in the following two to six quarters, so we would seem to be right on track.
Enough with the economics lecture… we'll leave it to the powers that be at the National Bureau of Economic Research and its Business Cycle Dating Committee to let us know if we're really in a recession and when it started and ended. By the way - it took them 20 months to make a declaration of the 2001 recession, so don't hold your breath…
So what does all this have to do with employee training and development? In a word: everything.
What typically happens during a recession or economic cool down is that business leaders read the headlines every day, follow the indicators, get nervous, and start cutting "unnecessary" spending wherever possible. The training and development budget is often the first to go and the last to come back.
Why is this?
Many leaders have a hard time justifying a hefty employee training and development budget because, well… it doesn't always provide the greatest return on investment when every dollar spent is critical to the bottom line. Let's face it - not everyone has had the greatest experiences with training and development as most of it simply doesn't stick and doesn't bring about the desired long term improvements in performance and business results.
Michelle Malay Carter over at the Mission Minded Management Blog put up a great post the other day comparing most training to nothing more than putting lipstick on a pig. You might check it out… it sums up the training conundrum pretty nicely.
So how exactly is one supposed to go about employee training and development in a time when every dollar must be spent wisely? The following are five tips to improve your training and development efforts in the face of the tough economic times:
- Remember that training is an investment – just as companies that keep up or increase advertising investments during a recession gain market share and reap the benefits when the economy turns around, so do companies that continue to invest in training and development. When the economy does heat back up, your organization will have an edge on the competition as your team members have continued to sharpen and develop their skills while others were not.
- Make sure the training is targeted and really needed – It's difficult to spend your training dollars wisely when you don't really understand what training your team members really need. Consider spending a few dollars to assess your team member's real strengths and weaknesses before sending them off for training. Bottom line - if they don't need the training, don't waste their time and your money on it.
- Establish measurable returns – With any investment, if you can't measure its returns, it probably isn't a good investment. Training is no exception. It might take some time and effort to establish the metrics and benchmarks necessary for measuring the training's effectiveness, but in the long run it will be worth it as you will know for certain if it was a good use of company resources or not. This also makes it much easier to defend your budget to a finance committee or CEO as there are measurable returns that its effectiveness can be judged on.
- Work with vendors that truly understand your needs – Let's face it, the training and development world gets a bad rap as most hired trainers have limited solutions that they do their best to convince you are just what you need to solve your problems. If you're working with an outside vendor or consultant who insists on telling you what your needs are rather than taking the time to truly understand them this should be a red flag that they are trying to "sell you" more than trying to help you. If they can't get to the core of your issues, they can't bring about positive change.
- Make sure the training is flexible and customized – Bottom line… "Boxed training" rarely if ever brings about lasting change. If you are going to put the money into training and development make sure it is flexible and able to be customized to your unique needs. If it isn't, odds are you will be disappointed with the results and will have misappropriated scarce company resources.
Defending your training and development budget can be a tough sell during an economic downturn. However, if you can show that the training is targeted towards your team members' needs and that the proper metrics and benchmarks have been identified to measure the training's effectiveness you will have a much easier time defending your request for resources and will see a much greater return on your investment.
Regardless of the direction the economic winds are blowing this is the right way to approach all employee training and development efforts and will demonstrate the due diligence you have taken when appropriating company resources.
Now go Maximize Possibility!
Other blog posts you may be interested in:
- Personal Accountability Training: The One Training Program you Need in a Down Economy
- Sorry I Blew Your Training Budget
- Employee Training and Development Encourages Retention
- A Down Economy Can Be a Strategic Opportunity
- How Can I Thrive in this Economy?
- 4 Tips for Hiring During and Economic Slow Down
Chris Young helps organizations Maximize Possibility through talent management, cultural transformation, and strategic intervention. Bring Chris in today!
