Cutting Training in a Down Economy is not a Smart Move

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 less resources.

It’s been my experience that one of the areas hit hardest by budget cuts when the economy goes sour is the training function. Training is often thought of at times as a luxury or “nice to have” in an organization. It is an expense worth paying for when times are good, but an easy target for elimination when the economy is 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. 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.  Short-term savings are realized through the reduction of operating costs, but the long-term impact will be on your organization’s ability to compete when the economy improves. Will your employees be prepared and properly trained when business improves and customers return?

Shifting funding or resources, or increasing support for your training function and adapting to the way you create and deliver training in the midst of a poor economy may save you more money in the long-term, creating a sustainable business that can weather any negative economic condition. Employees will be better skilled with more training, equipped to take on any task in an organization and be more versatile than ever before.

Here are a few resources that support my claims and can help you decide what is best for your company:

• The American Society for Training & Development (ASTD) has compiled an Economic Survival Guide “mini-site” with tips and advice on how to continue to support training in your organization under difficult economic conditions.
• My friend, Dan Bobinski at the Center for Workplace Excellence has a blog post on how to save money by increasing your training budget. Dan does an excellent job demonstrating how lack of training or poor training affects employee retention which can become costly if you intend to replace those who were lost.
• On another blog I maintain, I created a post on making the best of what’s around. Training functions do not have to go to great expense to provide training. Making the best use of your resources can provide effective training, provided you are objective and focus on the performance outcome of your target audience.

“Our people are our best asset” has become a business cliché, but in this case it is absolutely true. If you value your employees and trust they will be the ones who can help keep your organization a float and be successful during these tough economic times, you are already further ahead than most organizations who have decided to take a different path all together.

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