Beginning in May The Arthur Lok Jack School of Business will launch its In-Company Executive MBA Programme in Guyana. Stabroek Business has agreed to publish occasional features on regional and global business-related issues prepared by members of its staff.
The first in the series of articles titled Training and Developing Your Way Out of A Recession is authored by Nirmala Harrylall, the Director of the School’s International Centre.
By Nirmala Harrylal
“Prosperity is a great teacher; adversity a greater”
William Hazlitt (English writer, 1778 – 1830)
Everyone knows that the success of any organisation is driven by the creativity and innovation spawned by its people. Organisational creativity and innovation is a competitive advantage that cannot be easily copied and nurtured very well in times of prosperity. When creativity and innovation isn’t nurtured, it withers and dies or walks out of the door.
The most vital time to nurture creativity and talent is when economic uncertainty causes the most gifted people to be concerned about their future. Ironically, this is the very same time that unenlightened organisations turn their back on creative learning and development.
The quotation on the front of this publication: “Prosperity is a great teacher; adversity a greater,” is as true today as it was when it was written two hundred years ago – and it illustrates perfectly how we continually fail to learn the lessons of the past.
These are fast-changing, unprecedented times – and predicting an organisation’s own future is far from easy. The turbulence knows few bounds, and fewer still within the learning and development arena that is one of the pillars fostering creativity and innovation in an organisation.
As economic storm clouds gather, the primary thinking for organisations to stay alive in such hard times is to cut costs and one area that comes to mind is training and development. IMC (UK) Learning Ltd, an eLearning and advanced content solutions provider, commissioned a survey in 2008, ‘Staff training during an economic downturn – opportunities and threats’, that was designed to establish the views of HR professionals regarding the importance of training and learning in uncertain economic times.
According to the research, nearly nine out of ten HR professionals (88%) believe properly planned staff training can play a major role in addressing the challenges created by an economic slowdown. Despite this, over half (57%) of those questioned say staff training is one of the first budgets to be cut during bad times.
Key findings emerged when HR professionals were asked about the effect of the economic downturn on training budgets. An overwhelming 80% agree that cutting training budgets at this time causes more problems than it solves, while 83% acknowledge that staff training is just as important during a recession as when times are good.
The challenge is to make the case for maintaining or, better still, increasing spending during the downturn. Investment in training and development can help build competitive advantage, in several ways. True competitive organisations understand the value of training and development spending in downturn times.
First, as the downturn bites and the weakest players in a specific sector fall away, stronger players are able to take advantage of the opportunities that their demise brings. But to capitalize on such opportunities and secure your rise to first place or leadership position in the market still requires the best who can come up with new products and services and bring about changes in operations to help you secure that market position. This may require staff development for new markets, business practices or products to be introduced to fill the void.
Second, those organisations with staff who have updated skills through training that has been continued through a downturn will be able to take advantage of the changing economy as the downturn ends and demand picks up.
Third, while downturn-hit customers remain price-conscious, they are also likely to be more discerning on levels of service – and less forgiving when things go wrong. Continuing training and development for staff should do much to alleviate the poor levels of service that prompt consumers to go elsewhere.
Fourthly, the lack of organisational growth and likely reduction in staff turnover will see staff remain in their positions longer than they had expected; and the risk that they will become disengaged and indifferent increases. Training and development programmes for them could see their interest and enthusiasm re-ignited, leading to greater effectiveness and efficiency.
Therefore, the cost of cutting on T&D spending in the long run might prove to be detrimental for organisations in the long run. “For those organizations that just drain their talent base, the opportunity to recover is going to be much more expensive and take much longer,” says Lawrence Costello, senior vice president of HR at Trane, the Piscataway, New Jersey-based manufacturer of heating, ventilation and air conditioning systems and services.
T&D of your human resources should be seen therefore as an investment of tremendous economic value to your organisation. Organisations must focus on nurturing talent if they are to survive, grow and succeed. The continuous development and growth of people is inextricably linked to business performance. The business case for developing staff is compelling. Effective T&D can reduce staff turnover and absenteeism, improve motivation, increase productivity, and help boost customer satisfaction.
Now is precisely the time to keep investing in the skills and talents of our people. It is the people we employ who will get us through. When markets are shrinking and order books falling, it is their commitment, productivity and ability to add value that will keep us competitive. Investing now in building new skills will put us in the strongest position as the economy recovers.
