Wednesday, February 11, 2009

Investing in leadership development during a downturn

Despite deep budge cuts, many companies have found a way to refocus during the downturn and are reexamining their employee training programs.

Right now many employers are focusing their efforts on leadership development to grow strong managers, in order to not be caught empty handed when the economy turns around, according to a Wall Street Journal article from earlier this week.

Identifying and grooming leaders is important in good times, says Bret Furio, senior vice president of consumer lifestyle for Philips Electronics North America. "In times of crisis when the economy is struggling," he adds, "it's imperative."

Companies spent 11% less on training per employee last year and more than twice as many corporate and government training professionals expect training budget decreases rather than increases in 2009, according to recent research.

Philips Electronics NV is part of that group of businesses cutting back on training this year. Instead of eliminating anything, the company found ways to save on their annual leadership development program, called Inspire, and still deliver the same quality training.

In a nod to the tough times, Philips trimmed the budget for Inspire, eliminating one tutor and tapping more employees, rather than outsiders, as trainers. It's holding the program near Seattle and Boston, where Philips has many employees, saving the company transportation costs.

Another big name, Estee Lauder Cos., is also continuing its leadership development programs even after reporting lower sales and profits last quarter and the announcement that the company will be cutting 2,000 jobs over the next two years.

During better times, the company would send 120 executives to a two- or three-week summer college program. This year, it will be sending 60 and only for one week. All of its leadership programs are emphasizing “innovation and managing change in volatile business conditions.”

Saving on employee training

A well-trained employee is one of your most valuable assets, especially when your business is facing tough times.

With training, employees can will save their employers more money by making less mistakes, being more productive and being able to take on more work. Along with saving money, training improves engagement, loyalty and an employee’s confidence in their work.

Training doesn’t have to be expensive in order for it to be effective. Consider these cost-saving training options:

  • Video training. Instead of sending a group of employees to outside courses that incur expensive travel costs and lost hours, find a comparable video training program to bring in house. For the cost of one ticket to an expensive seminar, you can train an entire room full of people.
  • Online training. Similar to video programs, online employee training or e-learning allows you to train many for the cost of a few and eliminates travel costs. It also gives employees the ability to work at their own pace and complete courses as they go.
  • Smart shopping. Tools like can help you find and compare employee training programs that will fit in your budget. Shop smart and know you’re getting the best deal for your business.

1 comment:

Dan McCarthy said...

Great post. These challenging times provide us the opportunity to get creative. How can we accelerate the development of our leaders and decrease what we are spending on formal activities? In many cases, the most expensive activities produce the least development. It’s an opportunity to focus on what really matters.

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