Another recession is looming which means extra fear and growing uncertainty not only for individuals but companies as well. A question that arises naturally – what to do next? And here we have businesses which choose probably the easiest way out – to stop, freeze and postone the investments in training and development of employees. But is it really the best solution and the smartest saving? We had a great chance to discuss this in depth with BMI Executive Institute visiting professor Aad JCM van Vliet, HR management professional with more than 30 years of experience in global companies such as Unilever, SmithKline Beecham, Novartis and DSM and a founding Partner and Global Lead of Avvartes. Here are 7 reasons why you should at least think twice before choosing this risky business strategy.
1. Developments in markets, technology, customer and employee expectations don’t stop because there is a recession. Changes will continue taking place at the fastest speed ever. How are you going to keep up and survive, or even better thrive, if you stop your people from learning new skills?
2. Reskilling and Upskilling needs will continue to be of an unprecedented level that we have never seen before. According to WEF, 50% of all employees will need reskilling by 2025. Millions of jobs may be displaced and even more new jobs will emerge. There is a good chance that for your business to flourish reskilling needs to happen now! How are you going to do this if you stop these investments in your people?
3. “Learning fast” continues to be a strong competitive advantage. Many companies are not yet ready to confidently embrace the future. Yet, the future will not wait. Jobs are changing, we will use technology to do what technology can do best and use people to do what people can do best. Jobs will be more fluid, making it possible to adapt to new challenges. Teams and teamwork will become more important and more autonomous. There are different ways of learning. And we can learn a lot more by experimenting. However, many companies are not strong enough in this area. So, how are you going to stay ahead if you stop investing in learning?
4. Companies that don’t allow for training and development will have to recruit for essential (new) skills…….and this recruitment is more difficult than ever before, and too often even impossible. The demand for skilled workers is growing, with 7 out of 10 employers globally saying they are struggling to find workers with the right mix of technical skills and human capabilities (Deloitte, July 2021, The worker-employer relationship disrupted). If you can’t recruit and you don’t invest in training, how can you make sure you have people on board with the right skills?
5. New generations are looking for development opportunities in their jobs and they are very quickly ready to move on when their expectations are not met. Gen-Z generation, who have rare skills that are in high demand, will not sit out a recession and a development freeze. They are ready to move on when they believe that their expectations cannot be met. By the way, it is likely that your competitors are already trying to attract them… How are you going to survive if you don’t have people with future-critical skills?
6. Companies, in order to succeed, do not just need ‘people with skills’, they need ‘engaged people with skills’. There is ample evidence that engaged and empowered people make a huge difference to the top- and bottom line. After hearing about the Great Resignation during the pandemic, we now hear a lot about Quiet Quitting. According to a Gallup survey taken in June 2022, quiet quitters “make up at least 50% of the US-workforce-probably more.” Gallup says that the percentage is particularly high among people under the age of 35. If you employ people who have personal development and growth as a key-driver and you stop investing in their development, you may expect these people either to leave quickly or to quit quietly. How are you going to succeed without these people – remember they also have the rare skills you need in order to succeed.
7. Trust is what people need, even more so during a crisis. “Can I trust?” is the question we ask ourselves all the time. In this case: Can I trust my company that I can continue my development? Can I trust my leaders that I will be supported in my journey? We are already in a situation that many workers in a job agree that independent work is more secure than traditional employment (Workers don’t feel like a 9-to-5 job is a safe bet anymore, Carolyn Ockels, Steve King, Gene Zaino, HBR, March 23, 2022). Without sufficient trust there will be no engaged employees.
It is very easy to quickly decide to stop the learning investments in times of recession. But we should not underestimate the negative dynamics set in motion by such a decision.
Above we shared just 7 reasons why continuing with these investments is essential, especially(!) in tough times. We are sure that when you think this through for your company, you will find even stronger arguments.