Viewing Employee Development as an Expendable Item

budget cutsAll across the American business community 2010 budget processes are well underway. Unfortunately in many cases it is likely that training and development is taking a beating as a line item. What makes an employer think that when times get tough they can cut or underfund their employee development budget and not have to account for the cost in terms of ability to execute and levels of engagement?

I am not sure how you’d answer this question but I’ll give you my view; the training or development that was cut from the proposed or even the approved budget was considered non-strategic and luxurious to begin with, something that was affordable at one point but is no longer. This reminds me of the "stay-cations" everybody was taking this year and and other similar changes people have been making in the wake of the continuing economic downturn. I guess the kids really didn’t have to go to camp after all, it was simply affordable.  Employee Development cannot be seen in this same light.

There is a pretty important difference here, vacations were always luxuries, at least the kind that involved travel and resorts. Cutting back on your training and development investments when the going gets tough signals

  1. A surrender to the short term
  2. An indication that this type of investment is non-essential
  3. Future training or development opportunities your employees have been seeking or looking forward are always going to be subject to cancellation

As far as expensive vacations go I can understand that sort of thinking. When it comes to having my organization in a state of readiness to be at the top of our game, I am sure it is not that optional. Your employees are either your most valuable asset or they are not. Their ability to perform is either always of critical importance or it never is.

Beyond these fundamental questions there are other issues that are related and demand continuous attention. It is always going to be important to keep in mind that a certain portion of your work force (likely those that are essential) may have many options as far as places of employment. You can certainly expect some churn among this group as other companies tempt them away with more rewarding financial packages. What you don’t want to be doing is giving them reason to be looking elsewhere by cutting back on their opportunities to develop professionally.

As for the rest of your work force, they will not be as readily on the move. Since they are not, there is even more need to keep continually adding to their knowledge base, skill sets, and exposure to ideas  and experiences. Otherwise they are being asked to deliver in the face of new challenges using recycled ideas and thinking available in the closed space of your own organization.

As a development professional maybe it seems like my thinking is aimed at feathering my own bed. That is a cynical perspective. The expenses associated with the maintenance of a strategic workforce are indeed among the largest an organization faces. It may seem that with all the basic expense associated with the workforce that cutting back on development and training is small by comparison, and it is. However, the savings usually associated with this type of thinking leaves out the costs of insufficient levels of performance and in some cases replacement of key resources, a far greater expense in the long run,.

You may not be comfortable with the intensity of my message or the suggestion that follows, but you’d be well advised to listen well to the words of Gary Hamel, currently recognized by the Wall Street Journal as the leading expert on business strategy. Much of his recent work describes the development he sees needed at all levels of an organization in order to remain any competitive advantage. Reading what he has to say you’ll realize that he is talking about your development as well.

So what would I recommend? Honestly,  and without hesitation, I’d cut back executive compensation before I touched the training and development budgets. I’d make the same recommendation if I was one of the executives facing these choices. There is a lot of business to be done after this recession is finally fully understood.


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