HR must fight hard to keep training budgets

HR
has been urged to fight to maintain funding for staff training as organisations
cut costs in response to ongoing economic uncertainty.

Research
by the Chartered Institute of Personnel and Development (CIPD), published today
at its annual HRD conference, reveals many employers are already reducing
training spend.

But
the CIPD and the CBI are both urging employers to treat training as a priority
despite continuing concerns about the economic downturn. These fears are likely
to be confirmed tomorrow when Gordon Brown announces his Budget. Employers are
already having to cope this month with increases in National Insurance
Contributions, estimated to cost business £4bn a year.

The
CIPD study shows that 28 per cent of private sector employers cut training
budgets in the past 12 months in response to worsening trading conditions.

The
CIPD’s chief economist John Philpott argues that training is even more
important when resources are being squeezed.

"The
morale and commitment of staff is tied to an environment where they are being
provided with access to training and development," he said. "They see
that they have a stake in the organisation and are not just short-term business
fodder."

Senior
policy adviser for the CBI’s learning and skills group, Maniza Ntekim, said
companies should respond to shrinking resources by focusing training on areas
that really add value.

"When
employers respond to short-term needs they must bear in mind that, in the
long-term, they will need their people to be as skilled as possible to ensure
they remain productive and competitive," she said.

HR
director at the Montpellier Group Raymond Ryan agreed that employers could
compensate for reduced budgets by training smarter.

By
Ben Willmott and Ross Wigham

Feedback
from the profession

Emma
Lochhead, director of human resources, COI Communications

"I
think it is a matter of working smarter – for example, more centralisation of
the training budget. We are Investors in People for a fifth year running and
want to ensure we keep it. We are running more courses in-house to maintain the
level of development people need without the frills. We have to make sure that
where we spend money on training it is valid."

Mark
O’Connell, HR director, Skandia

"Lots
of firms will reduce training because the natural reaction to a downturn is to
cut costs. HR has to be more realistic about what it can deliver in hard times
– but to cut training is a mistake. People are the way to drive us out of the
downturn so training is key as long as its targeted."

Paul
Davis, HR director, 3M

"In
the past six months we’ve been doing more training. It’s important to improve
products and services during a downturn and that means more training.  When the economy picks up, people may need
different skills to deal with it."

Steve
Pallas, training and development manager, Nissan

"In
some ways you should spend more on training in hard economic times. You have to
get value for money and the most out of your budget though. Obviously the
downturn affects everybody but you have to try to ride it out and deliver your
objectives. To cut training is very shortsighted and only makes things worse."

Comments are closed.