Is Cutting Your Training and Development Budget Your Best Bet In Uncertain Times?

by Michael Hoffman

One thing is certain these days, and that is: nothing is certain.

Yes. I apologize for the cliché, but this is how most of are feeling, so why not be out with it?

With all the amazing technology we have for peering into the future, times are more perilous than ever. The inclination we all feel when the world is spinning too fast is to jump off in order to attempt to regain our balance.

Anything else would be counterintuitive.

And yet, just as our parents didn’t lock us away in a closet when our mischief arose beyond their boiling points (one hopes!), we too must keep calm and not re-act.

I hyphenate re-act to put emphasis on the prefix “re” to point out that a re-action has very little choice involved. One action precipitates another without much consternation.

Let’s face it, the first thing we think of when sales are down is cutting costs. I don’t know how many times I’ve heard leaders repeat the phrase: We’re cutting out everything that is not essential for the rest of the year.

While there is no doubt that cost-cutting is essential for survival in many cases, we should also be aware of the damage caused by cutting too close to the bone if it is not 100% necessary. A recent survey conducted by PwC reported that excellent training and development was a close third to competitive wages, which was second to opportunities for career progression.

This tells us some very important things about cost-cutting: If you are not fully conscious of the repercussions of stripping out everything that is non-essential, you may in fact be stripping out many of your essentials.

What happens when training and development is considered non-essential?
On the upside, you remove the costs of training and development. With the objective of determining just how much should be cut, let’s compare that to the potential losses.

First, cutting training and development programs doesn’t go un-noticed. Employees understand that when the third most important reason for them to stay in a company is being trimmed (if not cut entirely), they see a big red flag waving in front of them. They may not begin thinking about jumping ship, but they are fully aware that the second and first reasons for why they stay have more fragility.

Second, if training and development is cut, how will the company get out of this mess? Changes are needed, and that requires innovation, improvements, training and development.

Third, times have changed since people spent more than ten or even five years in a company. Even if you think it is unreasonable to train personnel that might leave before you have recouped your training costs, you really have no choice – and anyway, there is a much greater chance of them leaving if you don’t support, engage and invest in them.

In the end, it’s about doing the math (measuring). Looking at the cost of training and development without taking in consideration the enormous costs highlighted above is the mark of an immature organization. Unfortunately, an organization might not die from drastic cuts in this area; instead, they continue to limp along without every understanding why.

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