Why, when times get tough, do companies cut back on learning and development, asks Gemma Middleton? This short-sighted, knee-jerk reaction may cost companies dear in the long run.
Doom and gloom. Two words that could adequately describe the way both consumers and businesses feel about the latest economic revelations. Unless you have been hiding under a rock for the past few months, most people will have heard about the much publicised downturn and supposed troubled times ahead.
For a while, public figures have tried to play down economic worries. However Mervyn King, the Bank of England governor, has confirmed the bleak outlook and has said: "The UK faces its most difficult economic challenge for two decades". The reasons behind this comment are that it is likely inflation will continue to rise to an estimated 4% (the target is 2%); house prices are likely to drop (the evidence is there already) for the first time in 10 years, and take-home pay is likely to languish.
"For organisations to be a success, ensuring that the labour force retains its top people and improves on organisational productivity and efficiency are all key objectives that are so obvious they are taught in GCSE Business Studies."It is because of all this uncertainty that many organisations are reigning in their spending - consolidation is now the key objective, with HR departments feeling the pinch. A survey conducted in the UK found that eight in 10 HR departments are now concentrating on transactional aspects of HR, such as recruitment, instead of focusing on strategic aspects, which include leadership development, retention and productivity.
Choosing to cut spending when facing a difficult external environment is about as predictable as a punch up in Big Brother, yet is it really the best course of action? For organisations to be a success, ensuring that the labour force retains its top people and improves on organisational productivity and efficiency are all key objectives that are so obvious they are taught in GCSE Business Studies. So as soon as it gets tough, why do organisations, including world-renowned corporations, ignore addressing these principles and adopt a standing still approach?
In a book full of cheesy management phrases no doubt the well coined 'you have to speculate to accumulate' phrase would be on the first page - although cringeworthy, it makes a lot of sense. By continuing to invest in strategic development such as leadership development, it will help to smooth out the bumps, show courage that the current external environment is short term and help keep the momentum and business goals alive and achievable.
Alistair Darling, the chancellor of the exchequer, managed to create a light at the end of the tunnel on the UK's situation by predicting that inflation will return to an acceptable level next year and said that: "Employment is at a record high. Many order books are full. British business is competing and winning all over the world. Our economy is flexible and resilient".
It is this resilience that organisations need to build on. By continuing to invest in learning and development, dealing with the predicted difficult times ahead will be slightly easier. The UK is top of the training league in European countries, which is arguably one of the main reasons why UK firms and the economy have been in such good shape - and why continuing investment is a must.
UK businesses have worked hard to compete within the global market, which in many cases has been difficult due to the exchange rate, labour costs and sheer numbers of competing firms. It is imperative that organisations don’t stand still as, when the environment returns to an even keel, we may have been left behind.
Gemma Middleton is a communications specialist
at Righttrack Consultancy. For more information about Righttrack go to: www.righttrackconsultancy.co.uk
