This month we take a look at the impact of the recession on training, and explore the concepts of training floors and smarter blends.
With growing concern about the global economy, reductions in GDP growth in China and India, and a debt crisis in Europe we decided to take a look at the potential impact on the training industry. Our instincts were that future forecasts might predict significant reductions in training budgets and expenditure. However, by contrast we found that forecasters in Europe and in the US actually predict a small increase in training expenditure in the coming years.
Trainingindustry.com estimates that spend on training services in the US will rise by 2% in 2012. They estimate that 45% of the global spend on training services ($130.5bn) is in North America. In the UK Keynote forecast that training expenditures will also increase modestly year on year rising from £19.5bn in 2011/12 to £21.75bn by 2015/16.
Why is training spend increasing when practically everything else is contracting? It may not be anything to do with optimism, but more to do with what companies cannot do without. A really interesting piece of research on this topic is 'The Impact of the 2008-09 Recession on the Extent, Form and Patterns of Training at Work' by Alan Felstead, Cardiff School of Social Sciences, Cardiff University, and Francis Green and Nick Jewson of LLAKES Centre, Institute of Education, University of London.
Their research looked at the 2008-09 recession specifically, but also at previous recessions. They found contrary to more pessimistic expectations that employers did not significantly reduce training expenditure per employee in a recession. They identified two specific concepts, which shaped the extent, forms and patterns of training in a recession: training floors and training smarter.
You can’t fall through the training floor
The research identified the concept of training floors. In essence these floors support a specific level of training. Each floor is based on essential types of training that cannot be abandoned. These include compliance with legal requirements, meeting operational needs, countering skills shortages, addressing market competition, fulfilling managerial commitments and satisfying customer demands. Different industries will have different floors, but there’s clearly a threshold below which you can’t go and still be viable. It’s a good restatement of the old adage: if you think education is expensive, try ignorance.
Interestingly redundancies and staff reductions encouraged more training to ensure staff were multi-skilled and could cover more work areas and provide flexibility.
Training Smarter – you already know how
Of course, you can cover the floor in different ways. The research also found that employers were encouraged by the recession to find ways of ‘training smarter’. These smarter ways included focussing their training on business needs, increasing in-house provision of training, renegotiating relationships with external trainers, increasing the use of on-site group training, and enhancing the role of elearning.
Encouragingly, the research found that training was greatly enhanced by employing elearning. They say “although initial costs were a disincentive for some, when up and running elearning was perceived to be a cheap and highly flexible mode of training.” No arguments in this camp.
The research has suggested that the changes in training practices brought about by the recession are likely to be permanent even if there is an upswing in the economy. There might be further shifts in the nature of training as companies continue to find ways of working smarter. The advances in rapid tools, performance support, virtual classrooms, social networks and mobile delivery may herald further shifts in blended learning designs. We are seeing very effective blends developed using self-paced elearning, virtual classrooms and performance support on mobile devices. Thus in our view, whilst companies may hold to certain training floors, the nature of the training blend will continue to change. And when the economy recovers and the floor rises, the newer methods will persist. So, no need to be afraid of the next boom. Just in case you were concerned.By Steve Rayson