On 12 November 2008 The Bank of England confirmed what most of us already knew: the UK economy is in recession. Those of us who remember previous recessions know how challenging it can be to maintain focus and optimism in difficult economic times.
For those who haven't experienced a recession before - dubbed 'Downturn Virgins' - dealing with sustained economic problems can be a minefield. What's more, The Management Consultancies Association warns that changes in the economy and British business since the last recession make this downturn harder to deal with.
The relevance of the timing of this downturn is that middle to senior managers who are in their 40s experienced the last major downturn when they were just starting their careers. How many of them remember how their organisations treated them and how they felt at the time? Many may have turned to professional qualifications to remain motivated but now that they are in decision-making positions, will they support the ethos of self-improvement?
Many of you will have seen the open letter published in national newspapers by the UK Commission for Employment and Skills, which urged employers to sustain or even increase their investment in training. The appeal was from a coalition of the UK's most senior businessmen and union leaders, who took the unprecedented step of calling on UK employers not to slash staff training in a bid to cut costs as the economic downturn bites.
The letter said: "Now is precisely the time to keep investing in the skills and talents of our people. It is the people we employ who will get us through. When markets are shrinking and order books falling, it is their commitment, productivity and ability to add value that will keep us competitive. Investing now in building new skills will put us in the strongest position as the economy recovers."
The sentiment was borne out by recent research by Cranfield School of Management. Commissioned by learndirect, the report revealed that organisations which invest in their staff are best placed to save money, improve staff motivation and increase employee retention. It is only when you are faced with a GBP10,000 recruitment agent fee that you regret spending GBP1,000 on retaining a staff member.
The Nurturing Talent report, examined the impact of external recruitment versus developing internal talent. It found that employers who make strategic rather than operational staff development decisions, are best placed to achieve these benefits. For example, successful organisations are typified by those that use formal training policies to nurture talent (45%), while less successful organisations were more likely to train staff on an ad hoc basis (46%). However, although the report found that training and development can have significant benefits such as increased staff motivation and retention, only a third (34%) of its respondents had a formal training strategy. The report was compiled using responses from 1,189 training and recruitment decision makers. It revealed over three quarters of employers (78%) see skills development as more beneficial to their organisation compared to recruiting staff externally.
Dr Emma Parry, Senior Research Fellow, Cranfield School of Management, said: "With training budgets arguably amongst the first to go in a recession, our research demonstrates that growing your own is an effective way for organisations to obtain the skills they need while saving money."
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