Is training the key to survival in a downturn?

Many businesses will not have traded through a recession before, so it will be interesting to see how they respond in terms of cost control. My recollection of the last recession was that two of the significant cost categories to bear the brunt of cuts were advertising and staff training. However, an interesting article in the Sunday Times today suggests that better investment in training might be a key part of a strategy to survive the impending downturn…

The Sunday Times feature focuses on how better training has helped solve a problem of staff retention at a sweets manufacturer (actually one of my old clients at PwC!). However, there are wider benefits arising from improved training opportunities, including better productivity and staff motivation.

All of which makes it surprising that small businesses in the UK don’t seem to invest in training as much as they ought to. Despite substantial free help on offer from a variety of government programmes, a third of firms that employ fewer than 50 people don’t invest in any training at all, according to the article.

A useful quote goes on to state:

““Work we’ve done has shown the failure rate among companies that never gave their staff any training was 2.5 times higher than those that did. Other research shows that a 5% rise in the training rate increases gross value added per employee by 4%.”

A useful article for students; particularly good for the new AQA Unit 2.