Isn't recession ideal for training?- "You must be joking"

Ben Manickam

Have you considered the recession to be conducive for staff training? Would your answer be analogous to the title of this article which aptly describes the common response one hears when organizations consider training and development programs in the current context. Understandably so, since training budgets are amongst the first to be axed to help organizations survive the recession. This is true in both the for-profit and non-profit sectors.

Visionary organizations follow a radically different approach to training during lean times. Rather than respond with the customary strategy of downsizing, cutting back on training etc.... consequently burying the organization deeper in the pack with the rest in the industry, visionary organizations understand the benefits of a recession.

They take extraordinary measures to emphasize streamlined training more than at other times. Some may view this as imprudent, but these organizations think differently. Unconventional they may be, but such decisions to invest in training are based on courageous, visionary thinking to prepare the team to be ahead when the economy rebounds.

While such visionary organizations agree that cost cutting during recession is important, they also acknowledge that to really keep company costs down, you need employees performing at their peak - and that means more streamlined training.

They also know that cutting back on staff training has no coherent justification to business survival. Neither do the benefits of cost cutting equate to the impacts of a trained staff. On the contrary, these organizations place a renewed emphasis on training during recession for the following reasons:

(1) Beyond assets - a decision to invest in training during lean times rather than layoff staff is indicative that an organization views people not as mere assets who are used during good times and disposed during bad times, but as essential elements of the organizational fabric. A message that members of the team are valuable and will be treated with dignity and respect is communicated across the organization. Such affirming actions no doubt contribute towards superior performance.

(2) Leapfrog the competition - when these turbulent phases of business cease and the economy brightens, due to the emphasis on training such organizations are well prepared to lead with competent team members, better equipped to make the competition irrelevant. Chan Kim and Mauborgne (2005) who authored Blue Ocean Strategy refer to making the competition irrelevant through a value-innovation combination.

Their thesis stipulates a strategy that refuses to be drawn into conventional competition. Rather than compete they suggest creating a leap in value for customers through the Value- Innovation combination. An undeniable characteristic of recession is when team schedules are not as busy as before - ideally this is then a reason to invest in concentrated training to develop this value-innovation mix.

An organization that does not train, especially during lean times, faces the risk of leaving its best staff stagnant and irrelevant for the future.

(3) Important over the urgent - Stephen Covey's Seven Habits is a much quoted book in leadership circles. Covey explains that successful individuals operate in the "important but not urgent" quadrant.

In boom times, due to the hectic pace of business, the team is often running from important matters to urgent meetings with little time to concentrate on issues pertinent for business growth and aspects of training. Often during boom times, staff while physically present at an important training program, are preoccupied with some urgent matter that requires attention.

Thus knowledge transfer is abruptly slackened. On the other hand, lean economic times - with business down and the accompanying slow pace - provide that ideal opportunity to concentrate on what is "important but not urgent".

This is the best time for the team to identify, focus and develop strategies that fit this quadrant. Important matters that are not urgent determine the organizations destiny and require more time, more initiative, proactive thinking, and concentration.

(4) Motivation - A motivated, well knit team delivers superior performance. Times of recession tend to have a negative effect on team motivation. During lean times employees experience boredom, insecurity, lack of direction and are anxious about their futures. Morale tends to sag and they start exploring other opportunities.

Progressive organizations use lean times to reinforce team values, long term focus and a culture of interdependency through a range of training activities and team building exercises. Senior managers can play a significant role as internal experts by sharing their knowledge and experiences to motivate the team.

(5) Hope - leadership literature abounds with the understanding that the leader is a purveyor of hope. As Jim Collins points out in his recently released work How the mighty fall and why some never give up (2009), when hope is abandoned then the organization should begin preparing for the end. Visionary organizations communicate hope right across the organization, by bringing and building the teams together and energizing them to focus on the future through appropriate training.

The common excuse given is that training is expensive and therefore cannot be justified during difficult economic times. This approach would be shortsighted, because the need for talent has never been greater.

According to a survey conducted by the Conference Board (USA), talent is one of the top priorities amongst CEOs around the world. Visionary organizations have understood this reality hence see the benefits of training far exceed the costs, more so on the long run. When the economy brightens, staff is better equipped, more proficient to deliver superior service thereby enabling the organization to be ahead.

Several organizations do in-house training using their own, senior managers. Others use professional trainers. Organizations however need to be wary of several low cost, high entertainment programs offered under the label of training, as these may not deliver desired results or in the words of a senior trainer, will lack "Monday morning relevance (MMR)". The HR department needs to review trainings in light of individual and organizational productivity and effectiveness.

The frameworks developed by Donald Kirkpatrick (reaction, learning, job behaviour and results) and Philips (reaction and planned action, learning, applied learning on the job, business results, return on investment) are helpful guides when discussing the objectives of the training program with the trainers. Unfortunately, training surveys indicate that many training programs do not proceed beyond the second level.

Good trainers retained by the organization will ensure change at the fourth and fifth level - business results for the organization.

Ben Manickam is the Director of the Center for Graduate Studies and serves as lecturer on the MBA and MSc (Organizational Development) programs of the University of Peradeniya.