The Leisure Review: February 2009

There is no doubt the current economic climate presents a real challenge to businesses of all sizes and many employers are coming under increasing pressure to keep a tight rein on their budgets. As companies face tough choices to ensure they remain profitable it is understandable that training budget cuts are considered, especially if the return on investment is not immediately apparent. In fact a study conducted by Common Purpose, an international leadership development organisation, has shown that just under half of all training and development professionals are expecting training budgets to be cut by at least 20 per cent during the current climate.

This is a prime example of a false economy. It is absolutely essential companies do not compromise staff training budgets in an attempt to make short-term savings. Now is the time to make smart decisions and adapt. Having the right staff, with the skills and training they need to do their jobs, is crucial to the success of any company.

Leaders in the human resources sector have warned that budget cutbacks which involve putting staff training on hold until things start to look up financially could have dangerous consequences for businesses. According to the national audit office, skills gaps due to a lack of training can cost a fifty-employee business up to £165,000. As financial constraints become more pressing it is important to ensure that staff gain the specialist skills they need to be efficient and productive in their jobs.

So now is precisely the time that we should be investing in the skills and talents of our staff. The need for training is being reiterated throughout the country by some of the UK’s most senior businessmen, politicians, union leaders, including the UK Commission for Employment and Skills, and the Confederation of British Industry (CBI).

Richard Lambert, director general of the CBI, recently urged employers to sustain or even increase their investment in training as he asserts that it is the people which businesses employ that will get them through. “By investing in the education and training of their workforce, employers are ensuring that people have the right skills to support businesses through these difficult times and to help our economy grow in the future. It is their commitment, productivity and ability to add value that will keep this country competitive.”

Similarly, Peter Mandelson, secretary of state for business, enterprise and regulatory reform, said: “Evidence shows that those [companies] that invest in training are less likely to fail. And first-class workplace skills will be key to prospering when the economy turns up. I know people face tough decisions but I would urge businesses to invest in skills and training to ensure that they are well-placed to take advantage of the opportunities when global economic conditions improve.”

The Chartered Institute of Personnel and Development has also warned that slashing training budgets could have an undesirable effect on a company’s ability to survive the economic slowdown. Their chief economist John Philpott said: “Training cutbacks reduce the ability of organisations to cope in a downturn and can also damage staff morale, employee engagement and organisational performance for years to come.”

So while slashing investment in staff training can seem like an obvious and quick way of trimming costs, I would advise employers to think again and actually take advantage of the training opportunities on offer.
The most sensible action to take is not to remove training itself from the budget but to work with training providers who are able to add real value to your business by working on a partnership basis and providing tailored training programmes to meet specific business demands. Training staff through the National Skills Academy for Sport and Active Leisure is a great way to achieve this. Launched last November, the skills academy provides one single and coherent approach to skills training in the sector. All training, qualifications and careers are employer-led and employer-directed, ensuring better quality, more targeted training and better access to funds for training. Growing all the time, it will continue to develop relevant and cost-effective training programmes to help businesses survive the downturn.

So with significantly subsidised training out there for the taking, the message is clear: avoid a quick-fix reaction to financial pressures in favour of a more long-term approach. Seize the opportunity now to develop new skills in your workforce and put your organisation in the strongest position as the economy recovers.

Florence Orban is interim chief executive of the National Skills Academy for Sport and Active Leisure. For more information on how you can benefit from the National Skills Academy for Sport and Active Leisure, visit www.sportactivensa.co.uk

The Leisure Review, February 2009