Why you shouldn’t cut training

Isn’t life strange?  When organisations are doing well they say they are too busy to spend the time sending their people on training courses, and when times are hard they say they can’t afford the money.

The truth is that training is important for exactly the same reasons why the decision to send people on training courses is difficult – it is because people are the most important asset of virtually all organisations.

Think of it this way – if you ran a highly automated factory, you wouldn’t cut back on the maintenance schedule for the machines just because times were hard.  To do so would at best risk break-downs and at worst could result in machine failures and the need to spend capital in replacement or repairs.

What you would be more likely to do is extend the life of the machines by looking after them extremely well so that you could avoid the replacement costs in the short-term.

Why then do we appear to do the opposite with our most valuable asset – our people?

I believe that this comes about as a result of two misunderstandings:

1. Employees are a marginal cost

The business pages of the newspapers are currently full of items about organisations laying off staff as the impact of the economic slowdown begins to bite. 

In very labour-intensive industries this is understandable, but surely automation and computerisation has made our businesses less labour-intensive than at any previous time in their history. 

The brutal truth is that a significant proportion of businesses cut staff numbers in difficult times because of poor management.
So how do I justify this seemingly shocking statement?

First, difficult times require employees to raise their game, to improve productivity and work together to ensure that the organisation weathers the storm.  But all too often the difficult times expose the fact that managers have previously recruited people who are not up to the task.  They were fine when times were good as the organisation didn’t notice that it was actually ‘carrying’ some of them, but tough times expose the fact and mean that the organisation cannot afford ‘passengers’. 

Secondly, a lot of managers judge their status by the number of staff they employ rather than by the productivity they achieve.  Headcount numbers for such managers therefore tend to rise when times are good regardless of whether the increases are strictly necessary or not. 

The funny thing is that when times are hard these same managers are held in high esteem as a result of their readiness to cut headcount numbers and seemingly produce similar results with fewer staff!

When headcount numbers tend to rise and fall like this, what is the point in investing in developing your staff?

2. Training is a luxury

Just as you can get away with delaying the routine maintenance of machinery in the short-term, I believe many managers feel that the expenditure on training is something that can be delayed until better times.

The problem is that people are not machines, they are sentient beings that interpret your every action and decision.  How then do you think people interpret a decision to cut training?  

Answers could range from ‘the organisation is struggling’ to ‘they value profits above people’.  Whatever the response it is unlikely that employees will react by thinking ‘we all need to muck in to help the organisation through this difficult time’.
In many ways the problem comes back to poor managerial decisions.

In the good times many organisations grossly over-spend on training, booking courses on a wide variety of subjects.  They then struggle to fill the places on the courses because people are too busy.  Training therefore gets a bad reputation.

If people spent more wisely in the good times and focussed more on the business objectives of training, the likelihood is that they would spend less, that the effectiveness of those programmes would increase, the reputation of training would improve, the training programmes offered would be over-subscribed and the organisation would receive a much greater return on its investment.

Organisations that approach training in this way tend to place a higher value on their investment in training and are less prone to the ‘stop-go’ approach of those that vary their investment according to the economic climate. 

The evidence

My favourite example of a company that places its employees ahead of profits and always maintains its investment in people development is Southwest Airlines.

In the aftermath of 9/11 the whole of the airline industry suffered tremendously.   Companies such as BA and American announced redundancy programmes and cut all non-essential expenditure – including most management training.

Southwest was the only major airline to buck the trend and not announce job cuts.  They did this because part of their mission statement reads ‘We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth.’

With fewer passengers, Southwest were able to invest more time and effort in developing their people and spend more time thinking about new innovations and strategy.

The commitment they showed to their staff during that period resulted in increased loyalty from the staff to the company and, when the market began to recover, they were the first choice employer of the best people who had been made redundant by the other airlines.

Oh, and by the way, Southwest was the only major US airline to remain profitable in the year after 9/11.  

About the author
Alistair Schofield is managing director of Extensor Limited and can be contacted at .