Why cutting training spend is a false economy
Some of the UK's top business people and Cranfield University are in agreement that cutting training spend is a false economy. Instead they advocate investing in skills and training as an effective means of combating an economic downturn.
In a recent open letter to UK employers, business leaders including Sir Mike Rake, Chairman of BT group, Sir Stuart Rose, Chairman of Marks & Spencer and Mervyn Davies, Chairman of Standard Chartered plc voiced their absolute commitment to training investment urging employers to sustain or even increase their investment in training.
Citing their experience of previous economic downturns they state: "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."
This statement is reinforced by research from 2007 that confirms that firms that don’t train are 2.5 times more likely to fail than those who do.
Read the full text of the letter here
A recent report by Dr Emma Parry of Cranfield School of Management supports this view. The report entitled Nurturing Talent states that in an economic downturn, the most successful organisations are those who ensure their resources are allocated most effectively. This means investing in training in order to nurture existing talent and maximise the effectiveness of employees.
Investing in training, it concludes, not only improves productivity but saves money by enabling organisations to ‘grow their own’ talent removing the need for expensive external recruitment fees.
Dr Parry writes: "With training budgets often the first to go in a recession this research demonstrates that growing your own is an effective way for organisations to obtain the skills they need while saving money" As well as achieving an important cost savings the report says training is an important tool for motivating and retaining employees
Read the Nuturing Talent report
As one of the UK’s leading training providers LexisNexis Conferences & Training is well placed to help you make this investment and develop the skills that will protect your organisations’ future. We produce over three hundred events each year in the areas of Tax, Law, Employment Law and HR, Social Care and Payroll, Pensions and Health & Safety.
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