It's a painful fact that today's economic distress puts pressure on continuing organizational learning. Cutting learning expenses is easy, produces almost instant savings, and has few short-term negative effects. Learning budgets are almost always among the first targets of corporate cost-cutters.
A core question for learning professionals is: Do we believe that most organizational learning investments are justified and should be sustained? If we do, then we need an arsenal of reasons why organizations should continue to fund learning, even in the face of great economic distress. Now more than ever, we are fighting for a share of the influence (and budget) within our organizations.
Making a solid case
How can we reinforce the case for investing in learning during times of economic distress, despite a period of cost cutting? There are numerous arguments.
Maintaining competitiveness. Learning investments are necessary to develop future capabilities for the organization. Without such investment, the organization might shrink and become less competitive. Some organizations are even planning to use the current distress to increase their competitive advantage and grow. This strategy will require both capabilities beyond those that the organization has now, plus more learning.
Sustaining performance momentum. A pause in learning results in a lack of developed employees in the future - a major competitive disadvantage. Too many companies have learned the hard way that suspending employee development for even a short period (say three years) results in a lack of qualified leaders and contributors in the future.
Driving employee engagement and commitment in tough times. Learning is a proven factor in engaging and retaining your best employees. Employees who do not see that they are being invested in lose commitment, discretionary effort, and are more easily poachable. Companies rated among the "top companies to work for" invariably offer continuous learning to their employees.
Seizing the slowdown as a time to build capability. As the pace of business slows in the downturn, there may be greater opportunity to provide employees with time for learning, without sacrificing productivity.
Building the new skills and capabilities needed for success in challenging times. Unusual economic challenges may require specific training in how to meet them (for example learning to cut costs without sacrificing effectiveness).
Maintaining knowledge, skills, and capabilities in the face of extraordinary turnover caused by downsizing. Employee turnover without training new employees can result in loss of basic organizational capabilities that risk becoming extinct over time.
Sustaining organizational culture. Certain training, for example onboarding, is essential to acculturate employees. Not doing these types of training can result in undesirable changes in the organization's culture.
Sustaining organizational values. Corporate values are often transmitted through organizational learning. Not transmitting values in this way can cause organizations to depart from their desired core values.
Providing essential messages through the downturn. Without learning, the organization has fewer vehicles for transmitting vital information and communicating desired culture.
Reinforcing one of the most powerful change resources. Organizational learning is often used to adapt the organization to changes in its business environment. By cutting learning, we greatly reduce the organization's ability to quickly respond to its changing environment.
Ensuring continued employer attractiveness (employee value proposition). A recognized learning organization more easily attracts desired job applicants. Expenses of recruiting are reduced as candidates nominate themselves to join an organization known for providing continuing learning to its employees.
Shortening time to effectiveness. If we reduce the amount of learning provided, new employees take longer to learn, or never really learn, how to do their jobs.
Building leaders who can teach leaders. Many companies use their leaders to teach other employees - a powerful resource and a unique leadership development opportunity. In the absence of teaching, your leaders lose a valuable conduit to increase their organizational knowledge, familiarity, commitment, and satisfaction.
Ensuring a robust leadership pipeline. If you cease to develop your leaders internally, you are forced to hire future leaders from outside.
Driving alignment. Learning is a primary way to align your employees, and especially your leaders, around your organizational vision and strategy.
Encouraging continued innovation and external orientation. Learning expands your employees' minds outside the boundaries of their day-to-day jobs, allowing for innovative thinking. This benefits the organization by searching the environment for useful ideas and their implications. Learning allows organizations to adopt or adapt the best ideas from outside the organization.
Keeping it whole
If we must cut learning expenses, how can we still retain the most necessary learning? There is a spectrum of actions that we can take. On one end of the spectrum, we can instantly cut all learning, and most expenses end instantly. We will do only those things already contracted for, where it would be more expensive to break the contract than to do the activities. On the other end, we can continue all learning as planned. But this probably won't cut any learning expenses.
In between, there are many opportunities. First, prioritize learning. Pick those courses that are of the highest priority to continue, and stop all others. Second, find ways to continue learning, but cut costs using a variety of methods:
Use less expensive delivery venues. Instead of hotels, resorts, or training centers, use facilities that you own or on which you are already paying rent.
Use less expensive external providers. Instead of nationally or internationally recognized experts or teachers, look into using competent but less well known providers from local universities, colleges, and consulting firms.
Use more internal resources already on the payroll. Your own leaders often make great teachers; they just need to be asked. (You may want to support their teaching by assisting with preparing and delivering their learning topics.) Many leaders love to teach, and in their teaching, they also help to transmit corporate culture and values. Coincidentally, involving them in teaching helps to retain the leadership talent you most want to keep.
Rationalize learning-related travel. Offer training regionally as well as more distance learning. Make changes so that faculty travels, but participants do not. Coordinate purchase of travel for greatest cost efficiency. A little brainstorming can generate great ideas for reducing travel costs.
Cut internal fixed training costs (full- or part-time trainers, designers etc.), and outsource these resources. It costs much less to access these resources when you are not paying for full-time employees and their related benefits costs. Through no fault of their own, full-time trainers and training designers are usually not productive more than 60 percent of their time because of scheduling, logistics, or other factors. You may even consider setting up your learning staff as an outside provider, with a contract of some length to help the fledgling company get started. The people in the outsource organization will be the same individuals who delivered quality learning to your organization in the past.
In contrast, if you have been outsourcing your learning design and delivery, you can switch to creating and delivering learning internally, using employees already on your payroll as designers and deliverers. A caveat here is that internally designed and delivered learning must be of at least equal quality to that which had been provided externally.
Spread or shift costs internally so that the end users pay, not corporate. Some divisions may be more able to support learning than others. A large bank in the United Kingdom found that many of its divisions could afford to pay for learning, even though corporate could not. They therefore shifted the learning costs to the revenue-producing user divisions that could afford them.
Centralize, harmonize, and outsource or offshore your training administration. Another major global bank found that this approach offered the most relief from pressure on the learning department. In their large training organization, several millions of dollars were saved, even in the first year. The company used standardization of processes and offshoring to low-cost locations to accomplish this. Many companies have already offshored parts of their internal services; the project budget for this might even be available from a central fund. The biggest advantage is that offshoring does not cut into your ability to deliver value - in an ideal world, it remains almost invisible to internal clients.
If you have a long-term contract with a learning provider, work to negotiate lower rates or decrease the number of services delivered to you. You may also reshape their services to provide the most critical impact. Incidentally, having long-term learning contracts that are expensive to break can provide a strong argument against cutting the learning you offer.
Trade or barter for learning resources. Strike deals with other companies that offer similar learning activities or use similar resources. Many forums for barter and trade exist: professional organizations to which you may belong, professional networks, annual meetings and conventions, and professional meetings organized by consulting firms.
Collaborate with other companies in learning consortia to cut your costs. Many top universities sponsor learning consortia that companies can join. By collaborating with other consortium members, you can have your learning delivered by top faculty on a college campus at greatly reduced cost. An example of this is the Thunderbird International Consortium, sponsored by Thunderbird School of Global Management, in which eight companies share the cost of learning.
Divert funds to learning from other corporate activities, for example, social functions and not-currently-needed recruiting activities. In these times of economic pinch, many companies have reduced their hiring of new employees. Funds that would normally be used for recruiting may now be diverted to support learning.
Set up informal learning vehicles such as lunch-and-learn events or discussions led by corporate leaders, which cost little, but perpetuate learning. Employees can feel that their development is continuing, even though funds are not currently available for more formal learning.
Remember that corporate learning takes many forms, some of which we'll never find in a formal learning budget. Examples include off-site events, CEO speeches, and external presenters. Be sure to include these kinds of learning activities as part of the sum of the learning you are delivering, and take credit for it.
Target learning to your most critical markets, and reduce it in less critical ones. This makes it clear that you are delivering your learning resources to where they are needed most. While overall costs are reduced, you are still fully supporting your most important markets.
Segment learning offerings, and find different ways to cut costs in each segment. Different types, or segments, of learning may be amenable to different types of cost cutting. For example, skills training may be made more cost-effective through technology by using e-learning to teach the skills instead of a live instructor. Likewise, leadership development for senior leaders may be done at company facilities rather than at a rented learning center. A little creative thinking can result in significant cost savings.
Sustaining beyond the dollar sign
Change the nature of the learning that is delivered. Make it more tactical and more focused on current challenges, problems, and opportunities. This increases the perceived value of the learning in the eyes of senior leaders and stakeholders, and decreases the likelihood that learning will be reduced or stopped. At the same time, focusing on current problems and challenges can make your organization more competitive and even increase its probability of survival in dire economic conditions.
Focus on real-time metrics so that line leaders can instantly see the results of their learning investment. For one top CLO, training 500 sales reps across China in the disciplines of sales to quickly instill strong and visible capability, with a big focus on measurement of results, was a highly notable win. This will almost certainly lead to line management supporting more investment in learning.
Involving more of your line leaders in delivering learning can also change the nature of the learning itself. Because line leaders tend to focus on their immediate challenges, they will almost certainly make the learning more pragmatic. Involving line leaders will also increase shared commitment to the organization because employees at multiple levels interact in the learning.
Leverage advances in virtual learning. Use virtual instructor-led learning, video conference training, and e-learning. Look at the ongoing business as opportunities for "learning" - this can include CEO speeches, web conferences, connections to top research via articles, external web events, and group phone discussions on key management books.
We tend to focus learning more on the future than on the present. At least for now, change the focus of the learning to rest equally on both the present and the future. Tilt the learning emphasis more toward the present, and help the organization generate ideas to better weather the economic crisis and surmount its current challenges.
Finally, use more team-based learning. It can be more cost-effective and efficient; teams often generate great ideas for weathering economic crises and emerging even more successful from the downturn.
As I was finalizing this article I asked Siegfried Hoenle, a valued colleague, for his comments. Sigi is the chief learning officer and head of the Credit Suisse Business School. I thought his comments were particularly insightful:
"To me, the key is to understand and run the learning function as a business. This means to be very close to the internal clients/management and be an integral part of their value chain. This will ensure that you are never completely or unfairly cut down. We all need to accept that we are exposed to the same commercial demands as any other business, including running a lean and flexible operation. To be self-confident, commercial- and business-minded will lead to the right measures and avoid the defensiveness and complaining about the 'short-sightedness of management' that we hear sometimes in our circles."
Well said, Sigi. These are realities we as learning professionals should never lose sight of.T+D