You don’t need me to tell you it can look pretty apocalyptic out there right now.

Even California’s own Terminator Governor Schwarzenegger admits: “Our wallet is empty. Our bank is closed. And our credit is dried up.” The budget deficit is $24.3 billion!

So what for us in the training market? And what about the people on the receiving end – those in need of skills to make the organisations they work for fit for the future?

With 23,000 UK workers losing their jobs every week – that’s right, I said a week – it is easy to assume we’ve seen the end to any meaningful training spend. But that’s not the case.

Of course organisations are reviewing their training spend – all businesses, everywhere, are reviewing everything they spend. But when it comes to training, there is perhaps more talk about swingeing cuts, than actual budget slashing.

So while some organisations are certainly hacking back training costs, the majority are not doing it in any draconian measure. That might sound like an obvious statement – even the worst recession does not hit all businesses equally – but the picture is surprisingly mixed.

This time round, employers seem to have got the message: training is not a discretionary purchase.

Fortunately for the long-term health of our clients, they are mostly in the second category – spending, but cautiously and intelligently. For more on this see our factsheets: Evaluating and Validating Training Factsheet and Analysing Training Needs Factsheet.

But do the stats back up our experience?

The Chartered Insurance Institute recently found 66 per cent of employers polled believe it is important to carry on investing in staff training – only one in five plans to reduce their training spend to cut costs.

Meanwhile, a CBI survey of 581 employers suggests businesses are getting the skills message. According to its findings, 57 per cent of firms are worried about having enough people to fill highly skilled jobs come the upturn.

Interestingly, only nine per cent in the CBI survey say they intend to cut training investment. Meanwhile, 51 per cent plan to target spending more effectively. Let’s look at that figure. Isn’t 51 per cent a bit low? Or are we to assume the other 49 per cent are already confident about the cost-effectiveness of their spending?

But the picture is not the same everywhere – and that would again reflect our experience. More than half of employers in the hospitality sector are planning to reduce staff training costs during the downturn, according to a recent report.

But there is still a significant 25 per cent planning to ramp up spending and 37 per cent of hospitality businesses say the recession will encourage them to seek support through Train to Gain or the apprenticeship programme.

The report goes on to say 62 per cent of businesses paying for external training plan to bring learning and development in house to cut costs. This is interesting. And certainly lots can be done with the right people and structures. See our factsheet Get More from Training and Skills in the Business for more on this.

A recent Work Foundation survey found 40 per cent of employees think they have more skills than their current job requires. So if organisations divert training spend into boosting the training, coaching and mentoring skills of staff, rather than cut it altogether, they could up ROI by tapping into latent workforce skills.

So, we’re certainly not heading out of the turmoil yet. While perhaps more employers than ever now recognise the value of training, there is still a lot of uncertainty about where and how much to spend, and when to wield the axe.

Posted by steve walker
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