How Companies Are Reacting in the Recession and What Some Companies Are Doing in Response

We mentioned last time how a lack of or less training will impact learners because they will have fewer resources if companies choose to cut back on training. While many of our clients have cut back on training, a few customers realized more training (and possibly even better training) will improve the workforce they have.

Since the recession, there have been quite a few articles warning companies not to cut back on training. ASTD wrote an article back in August 2008, and Times online backed up those statements with points of their own. When there are less people to do more, for instance, when you have to cut down on your sales force or your call center, maybe you should get the few that are left better trained to handle the new challenges. In some cases, we see clients revamp their training and better train the remaining employees. Sadly, this is the exception, not the norm.

As a vendor, we’ve had to respond differently to our clients during the recession. We’ve had to learn to respond differently to our clients: how do we support a training team that has now half the staff that it did last year? Do they need a different type of project plan? Do they need us to stagger things differently? Do they need our project managers to take on larger roles? Can they do as much? Or, do we need to do more? At the same time, we juggle tighter budgets and must now help our clients find a more flexible way to reach their training goals. The solution may involve less technology, but in a way that still gets the job done and doesn’t sacrifice quality.

Personally, we’ve chosen to go with the exception. We realize that we need to step up to earn the trust and business of our clients. Some of the actions we have taken during this recession: 1) grown in personnel, 2) grown in technological offerings. We’ve taken more risks this year than we’ve taken in the preceding good economic years. When companies have to look for a vendor and they have to choose between a company that gives them the usual or a company that gives them more support—especially when they have less people to do more—that support has value. This has been a direct contributor to our growth this year—our ability to align ourselves to a new environment and support our customers and not take the knee-jerk reaction to cut back on our part to save costs.

We are not the only ones. I’ve seen our customers do the same thing. We have customers expanding their training; growth companies in a recessionary year have found ways to empower their employees and reach out to their customers. More than ever, these companies have marketed their training beyond the boundaries of the corporation. And it is beyond these boundaries where companies can scale more using technology that it’s paid off for them. Not surprisingly, in the past five years, Allen and our partners have won over 10 awards for training excellence. Let’s face it, this is not a cost issue but a vision of when and how to invest in one’s growth in a turbulent economy.

As the dust settles on 2009 and we look forward to 2010, look for those exceptional few companies that empower learners with more knowledge, more tools, and more capabilities.

As this year progresses we have been seeing more companies considering putting more into their training (see blog and article from 2010), and research analysts confirm the trend.

Here’s to hoping we are now heading toward a balance in our spending and our economy.

How Is the Recession Impacting Your Learners?

In our last post, we talked in general how the people at the top of corporations are affected by the economy; but perhaps the most dramatic effect has been on training departments. Those of you who perused the Bersin Data (Bersin’s Factbook 2010 Overview) can see some hard data on the shrinking training function.

In reading Tony Karrer’s blog, his third prediction for 2010 discusses how more training will have to be done with less resources and people. Sadly, our own research supports this data. In each of our quarterly reviews with our customers and prospects, our account mangers have reported dwindling in-house training departments. On top of this, former client partners hitting our website with resumes and calling our project managers and directors have risen as well.

First to feel the impact is always the training.
Companies still train, but they train less and they train with less people. The impact to learners is immediate: fewer regional trainers are now covering two to three regions. Less training professionals show up and train learners on the new product or new procedure—there’s just less of it to go around. Somehow, trainers are asked to create the same amount of training or more, conduct the training, and track it—all with less.

The efficacy of training will be impacted through potential loss of quality and content, but also through the loss of training frequency. This, in turn, will impact transfer and adoption.

If you are trained less often, if you have fewer resources, if you have an issue with your LMS and your help desk now has one person instead of five, it will impact your world and how successful you will be at your job.

As we tried to show in our last post, much like a marketing and product development expense, a cutback on training today will have future impact that will be not be easily alleviated when companies (we hope) start ramping up again with training and training personnel. We are aware that our partners are trying to find the golden path—to strike a balance between how far a company can cut back without impacting the potential to create revenue or avoid costly mistakes. But in the case of training department cutbacks, the blow on our partners’ internal resources (i.e. employees) will be felt immediately. Especially if employees feel motivation is driven by the fear of losing a job or the relief of having a job.

Lack of proper training could affect how learners feel about their job, their ability to be successful at their jobs, and even their ability to feel they are progressing in their jobs. Even in these hard economic times, progressing is a strong motivator for learners, employees feeling they are not progressing could impact your company in ways you hadn’t considered. For more on this topic, read the Harvard Business Review on some forces that motivate learners.