Learning and development activity and the external environment

The economic downturn since 2008–9 provides an interesting opportunity to assess how organizations react to their external environment in respect of learning and development (L&D). IRS (2009) reports that more than half (59 per cent) of respondent organizations to their L&D survey (covering a range of sectors and employer size) claim that the recession has had a negative effect on L&D in the previous year, with two-thirds having reduced how much they spend on training. Of these employers, 63 per cent had reduced spending on L&D, 30 per cent had reduced the number of in-house training staff and 24 per cent had seen training output reduced. Importantly, however, a similar number (65 per cent) reported having increased efforts to develop employee skills, albeit often in the context of reduced budgets. For example, 20 per cent of respondents had started employee re-training to aid internal redeployment. Other responses included reducing spending on external providers, reducing the number of apprenticeships and placement students and cutting back on graduate training programmes. ‘Aligning capabilities with business goals’ was found to be one of the top learning priorities for the year prior to the research, followed by developing effective leadership.

One-third of survey respondents reported having their L&D budgets reduced when last reviewed compared to only 15 per cent prior to the recession, while 21 per cent reported having their L&D budget increased. Nonetheless, organizations reported remaining committed to L&D with 80 per cent of respondents agreeing that senior managers view employee development as high on the list of strategic priorities. Importantly, however, one-third of respondents agreed with the statement: ‘as soon as money is tight, our organization always cuts back on learning and development’.

Task

How might you convince an employer that cutting back on L&D activity might not actually be beneficial over the longer term, even if it might provide an ‘easy’ means of cost-cutting?