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There Is No Better Time Than a Downturn to Invest In Employees
November 12, 2009
By Bob Nelson
There is no better time than a downturn to invest in employees. Money and time spent on training during a recession has a return that can last years as the knowledge and skills acquired stay with employees. Cultivating a culture of development also can boost a company's reputation as one focused on providing employee development, clear career paths, and on-the-job training for employees to ensure their success and advancement.
At first glance, it may not seem like employee learning and development should be a priority during tough times. After all, if things are tight, does the organization really have the money, resources, and time to spend on helping employees learn and grow? Shouldn't employees be focused on keeping their jobs instead of developing new skills?
Actually, recent research indicates the opposite is true. Companies that have a continued focus on career growth and development yield higher engagement and productivity scores on the part of their employees, giving the organizations a distinct competitive advantage in tight economic times.
An economic downturn is an excellent time for both the organization and its employees to take advantage of available growth opportunities. First, most employee development occurs on the job, with opportunities to take on new challenges and assignments, and in the process, learn new skills. Second, with the hiring freezes and layoffs taking place at many organizations today, the need for employees to take on more work and new and different roles in the organization greatly expands.
Myth: Training should be trimmed during economic downturn:
Fact: Be cautious about cutting staff development budgets because enhancing your employees' skills can payoff in both the short- and long-term. Do, however, make sure company-sponsored trainings are effective and cost-efficient.
This is why managers need to support their employees in learning new skills and allow them to participate in special assignments, problem-solving initiatives, and other learning activities. They should develop learning goals with each employee on an ongoing basis, and even for specific projects, discussing anticipated learnings from each assignment and debriefing learnings of any completed project. Managers should also hold periodic career development discussions with employees as part of their annual performance reviews to discuss career options and potential career paths.
So, while the temptation is great, cutting back on employee training should be avoided. For example, Bernie Marcus, founder of The Home Depot, holds fast to the belief that training is the key to establishing initiative and drive among employees. In fact, he attributes the success of his company to the longstanding practice of continuous training and rewards based on results.
Southwest Airlines also adopted this mind-set when it faced economic struggles after September 11, 2001. With changes made throughout its industry, the airline decided all employees had to increase their ability to adapt to internal and external changes. Rather than slash training, as was the norm in the industry at the time, Southwest increased the amount of employee training it conducted.
Phillips Electronics successfully made smart saving choices in training, making reductions in its training programs with one exception: a program called Inspire, which is reserved for carefully selected employees who show the greatest potential. Employees who are selected are placed in groups and assigned a business-related project. After reviewing the way in which the program was implemented, the company decided to make minor changes without cutting the number of participants or quality of the program. Rather than conduct training in extravagant locations, sessions now are held in locations with the highest concentration of employees.
If you find you need to trim your training budget, what should you do? First and foremost, innovate. If space and dollars are limited, select top performers to participate in provided training. When times are tough, those with the most potential tend to shine even brighter and should be the first to be developed. Tap into management to serve as trainers, which both adds credibility to your training and creates a development opportunity for those managers who are tapped for the honor.
Next, review existing training programs and evaluate which prove to be the most valuable and relevant for the company's current needs. Cut those with the least amount of benefit. Take into consideration the effectiveness of current programs. Are they truly necessary and making the most of employees' time?
Last, consider cross-training. By making the most of your employees, and taking time to explore their other interests within the company, cross-training combats boredom and complacency while benefiting the company. If staff size is slim, employees who are versed in multiple roles can help during layoffs or other reductions. For example, during the recession of 2001-2003, Toyota shut down a plant for 10 months, but kept all employees and cross-trained them. Employees acquired new skills that could help them in their jobs and in other roles as well. And the company discovered that once it reopened, that plant had the highest global productivity and quality ratings of all its plants, which helped secure Toyota a higher market share.
Bob Nelson, Ph.D., is president of Nelson Motivation Inc., an employee motivation specialist, and best-selling author of "1001 Ways to Reward Employees," now in its second edition. This article is based on his latest book, "Keeping Up in a Down Economy: What the Best Companies Do to Get Results in Tough Times."
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