During economic downturns, corporate investment into employee training often takes a nosedive.
Training first function to cut in recessions
In fact, Skillsoft experts argue it is one of the first departments and functions to hit the chopping block. This tactic may not be the best approach for addressing global slowdowns of recessionary periods. But one can understand the basis for the targeting.
Other articles you might like:
Historical purpose of training- to show off
In 2016, Harvard Business Review (HBR) estimated that employers spent almost a half of a trillion dollars for employee training ($439 billion). At the time the article was written, it was suggested that employees and corporations alike encouraged attendance in learning, education, professional and career development programs as a means for signaling, profiling, and showing off. That may not be the case today.
Training and maintaining top tier talent is of upmost importance when the economy is expected to dive southward. Who better to make solid decisions during a challenging economy? Competent well-trained employees may have a better chance at leading the company through chaos for financial survival. More so than poorly trained third string or second bench stand ins. Which CEO or entrepreneur wants to take a risk resulting in financial insolvency?
Other articles you might like:
But it has to be difficult as a manager, supervisor and business owner to balance the desire to maintain employee training programs with the requirement to rein in spending during an economic recession.
This is no small feat. It has to be some balancing act. Especially considering the transformation that the digitalization of the economy and the re-configuration of the traditional in office workplace setting to hybrid, work from home and wor from anywhere arrangements.
WEF estimates 40% workers will need re-training
In this instance, the World Economic Forum (WEF) estimated an approximate 40% of workers worldwide will need to learn new skills. WEF projects that workers will need about six months more or less of training. Intensive training in digital literacy is the norm. There is, however, training expected to obtain competency in other areas that demand equal attention. WEF breaks down remote work learning requirements in this manner:
- 1-2 months training needed to learn about people, culture, content writing, brush up on sales and marketing abilities
- 2-3 months time spent learning product development, artificial intelligence, and data skills
- 4-5 months need for professional development focused on cloud computing and engineering competencies
Fortunately, about 94% of business leaders anticipate that employees will be able to obtain new skills with on-the-job training. But, some employees beg to differ. Almost 60% of employees surveyed for another research project expressed complaints that “they had no workplace training and that most of their skills were self-taught.”
Cost effective training methods
While the WEF indicates that 94% of companies intend to provide on-the-job training, what if there is a downturn in the economy and plans go awry? Actually, shrewd employers will double their efforts to train their workers (while also keeping costs low). ISOR Journal of Business Management, says that employers can use their low cost methods to train their workers in the following ways:
- use webinars, self-paced and on demand platforms for training
- cross train internal employees to train others
- increase employee awareness of employee assistance programs
- use mobile, peer to peer, and social media: forms, chats, internal blogs, video, and podcasts to reinforce concepts learned
Not only is lifelong learning, on-the-job training and independent learning vital for securing a new remote job, these activities can be crucial for holding the job you have! 74% of employees indicated that are “willing to learn new skills or re-train in order to remain employable” at their current job.
Other articles you mgiht like:
Skills for which to train as a remote worker
What are the skills WEF says that employees will need?
- analytical skills
- self management
- active learning
- stress tolerance, and
This list of required skills for the remote workforce is consistent with the European Commission in its Self Management Session in Remote Environments emphasizing the importance of self management. Self guided learning, self initiation of work projects, and self motivation to see remote job tasks to completion are important attributes essential to remote work. Employees working from their home offices will receive less in-person supervision and feedback. This necessitates a higher level of personal responsibility, time management, self monitoring, self awareness, and metacognition.
In addition to making current employees more effective, efficient and more productive; an investment in employee training helps the employee to become more employable and if necessary, more marketable.
Training if not applied leads to 75% forgetting rate
Further, a key aspect of professional development is to reinforce and maintain the skills one currently holds. He found that if new information isn’t applied, we’ll forget about 75% of it after just six days. Ebbinghaus, a German psychologist conducted studies in the late 19th Century, which led to his discovery of “The Forgetting Curve.” Ebbinghaus found that individuals will forget about three-quarters of new information learned in just six days when we fail to apply it.
For anyone who has mastered a foreign language, Excel formulas, simple Java Script coding, or mathematical formulas and other computations can attest. We gotta practice what we have learned, otherwise we will soon forget it.
Investments in training equals higher profitability
What’s more? Maintaining the skillset of current employees provides other tangible benefits to the employer. What, you might ask? A well-trained employee is increasingly more engaged and commited to the company in where his current knowledgebase is reinforced and where he learns new material. A Gallup poll reported that engaged employees:
- experienced 10 percent higher customer ratings
- helped their employer achieve 22 percent higher profitability, and
- operated at 21 percent higher productivity than their least engaged colleagues
At first pass, we may think voluntary attrition is beneficial, particularly during recessions. But, NTT Data estimates it may take an employer up to eight to 12 weeks to replace a departing work and about four to eight weeks to train a replacement. In essence, these disturbances from the regular work flow can lead to an approximate 40% drop in productivity.
Other articles you might like:
Now that we know investments into employee training is just that; an investment and not an expense. What other ways can corporations benefit from continued investment into employee training programs?
Investments in training equals higher employee retention
Here are two statistics that could further elucidate the value employee training adds any company’s bottom line.
- Harvard Business Review calculates up to 86% of current employees would consider leaving their current place of employment solely because of lacking career development programs
- Deloitte suggests that companies could see an average 40% increase in employee retention rates just by making investments into career development programs