Mentoring your way out of recession

2009

In the current climate it was almost bound to happen. Hard-pressed employers are taking an axe to their corporate training budgets, with spending declining at its fastest rate for a decade.

But, while this means there will be less formal training and development of workers being carried out, it can also be seen as a valuable opportunity for managers to get more hands-on in the mentoring and coaching of their staff.

Research by California consultancy Bersin & Associates has found that over the past year U.S firms have been forced to cut back sharply on their spending on training spending.

But this is not so say that training has disappeared completely. In its place there is now more coaching, informal and collaborative learning and increased reliance on using external trainers rather than maintaining expensive in-house training departments.

The U.S corporate training market shrunk from $58.5bn in 2007 to $56.2bn last year, the research concluded, the greatest decline in more than 10 years.

Average training expenditure per employee fell 11 per cent in the same time period, from $1,202 per learner in 2007 to $1,075 per learner in 2008.

At the same time, training departments have been purged. Last year large companies employed an average of 3.4 training staffers per 1,000 learners, down from 5.1 per 1,000 in 2007, the research found.

Mid-sized companies employed 4.9 staffers per 1,000 learners in 2008, compared with seven staffers per 1,000 the year before, it added.

The difficulty for managers is that many recognise that in a downturn it can actually make more sense to spend more money on training, not less.

Research in November by the well-respected UK business school Cranfield School of Management concluded just this point, arguing that organisations which invested in their staff were generally best placed to save money, improve staff motivation and increase employee retention.

Yet at the same time, watching the numbers heading south, it is clear that something has to give, and more often than not it will be the (non-core) training budget.

But, as Bersin & Associates president Josh Bersin pointed out, simply stopping training and development altogether because of this should not be an option.

"Today's business world demands a combination of formal and informal learning with an emphasis on collaboration, knowledge sharing, social networking, coaching, and mentoring," he stressed.

Those firms that failed to invest in the good times in non-traditional methods of training, or had failed to instil a proper training culture in their managers and workers, would probably suffer most.

"While formal, instructor-led training is not going away, it is becoming a smaller and smaller percentage of training budgets," said Bersin.

"Business, HR, and learning leaders must think differently about corporate training and focus on those informal and collaborative strategies that will save money and increase the breadth of organizational learning," he added.

Another intriguing finding from the research was that the use of e-learning decreased in 2008 for the first time ever.

Companies also reduced their use of virtual classroom training, meaning that the total amount of online training dropped from just under a third of training hours in 2007 to just under a quarter last year.

This shift, again, illustrated the steady move towards more informal learning and social networking, argued Bersin.