Wednesday, 23 July 2008

Crunch Time for L&D Budgets...?

The news is just filled with doom and gloom about recession and a general slow down in world economies. For most organisations hard times means 3 things:

- Cut back on travel

- Cut back on training

- Cut back on marketing

I was listening to a CEO only last week who joked:

"In the last quarter we need to be careful about our spend on travel and may need to look at our marketing budgets too. I assume that we already put a stop to training in June.....(cue an embarrassed snigger from the CFO sitting on the sidelines)"

Personnel Today posted an article recently "Training budget cuts predicted by learning and development managers". This surveyed 120 L&D Managers from Private and Public sector about their training budets.

"..44% expected cuts, while 54% expected budgets to remain stable and just 2% expected an increase."

This is probably not a surprise with non skill-specific, soft skills, team building and diversity training taking the biggest hits.

One of the surveyed managers summed it up:

"If you want to cut a leg off your organisation for short-term gain, then cut back on training. If you want your organisation to continue to flourish during an economic cut-back, maintain training standards and levels."

The short term view that many (but not all) organisations take to training can potentially have a damaging impact longer term. I know from my own experience that if training budgets are cut this can have quite an impact on moral and communicates quite a negative message to the work force.

I would be interested to hear from others in the world of L&D - are your budgets being cut.....?

1 comment:

Dan McCarthy said...

Chris –

We’re fortunate in that we’re still growing, so no, no cutbacks in training. However, we’re still feeling the pinch of the poor economy, so no headcount adds this fiscal year.