The Case for Investing in Employee Training During an Economic Recession
When companies struggle through economic downturns, much like the one we are experiencing now, the first instinct is to start slashing the operating budget. Managers and employees are asked to do more with fewer resources.
The economic outlook for the foreseeable future in our country shows businesses will continue to cut costs and make tough choices in order to survive and stay competitive. While the belt tightening continues, so too will the temptation to cut training budgets or eliminate them all together.
It’s been my experience that one of the areas hit hardest by budget cuts is the training function. Training, in some instances, is often thought of at times as a luxury or “nice to have” in organizations. It is an expense worth paying for when times are good, but an easy target for elimination when times are bad.
Companies who have established formal training departments, however, see the benefit to operating an education arm of their organization because they understand how training maintains or increases performance in their employees. They understand there is a science behind training and adult earning. In order for it to be effective, training must be built on sound instructional design and administered accordingly. After all, it is the employees that help make the organization run. Poor performance on their part could mean poor performance for the organization as a whole.
I’m here to argue that if you are thinking of cutting back on your training budget just to save money and ride out our current economic storm, you are actually doing more harm than good to your organization’s bottom line. In fact, shifting funding or resources to your training function and adapting the way you create and deliver training may save you more money in the long-term and create a sustainable business that can weather any negative economic condition.
The Cost of Employee Turnover Due to Poor Training
Cuts to employee training, or poor training for that matter, results in higher costs to employers. These costs are due to employee turnover. According to Deloitte’s 2010 Ethics & Workplace Survey, one-third of employed Americans plan to leave their current job and look for a different job or career once the economy gets better. The main reason as to why they choose to leave their current position is due to lack of trust and clear, consistent communication from their employer.
Add to this poor training or lack of training opportunities where employees can enhance…