Training budget squeeze predicted

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A new study warns of the consequences of cutting training and development budgets during an economic downturn.

The report, Taming the Wolf at the Door, by leadership development organisation Common Purpose, found that almost half of training and development professionals surveyed are expecting a budget cut of 20% or more.

Team building and soft skills development will be hit hardest, while technical skills training and leadership development are considered the least likely to be cut.

It could be a case of organisations not learning the lessons from history: only 3% of training and development professionals who have held budgetary responsibility during a previous economic downturn said that cutting the budget did not have negative consequences.

The negative consequences experienced included limiting the ability to fulfil organisational goals and setting back the learning and development strategy.

The cuts are predicted to be fairly evenly spread across organisations although, the more senior the manager, the more likely they are to see a drop in investment in their development.

One of the most striking findings of the report was that over half of respondents are worried about retaining key staff during an economic downturn. The belief is that talented managers, those most likely to give an organisation its competitive edge, may be the first to move on to another organisation if commitment to their development starts to wane.

Julia Middleton, chief executive of Common Purpose says: “As economic storm clouds gather, many organisations cut their learning and development budgets in a misinformed attempt to see them through the tough times.

“Cutting training is a quick and easy economy to make – and developing staff can wait for a while, can’t it? Sadly not. In fact, this policy sends a pretty clear message to the people whose talent is the most highly valued, that the organisation’s commitment to their learning and development is short-term and wafer thin.”

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