The impact is often even more acute for SMEs and thus, often funding training and development for leadership and management for employees is one of the areas which an SME will cut back on or delay funding until the economic environment improves. This is often mirrored by the lack resources for the funding of marketing functions also within an organisation, where budgets tend to be cut. Not investing in both of these areas, is often seen by organisations as being easy wins or low hanging fruit, and seen as a way of reducing internal costs.
Importance of Leadership and Management Training/Development
However, an organisation’s Board needs to consider the longer-term benefits and value of continuing to develop leadership and management skills rather than a quick fix reduction in training/development. The key here is that it is difficult to qualify the outcome/impact of such training in such a turbulent environment. However, thriving organisations mainly do so because of their great people/employees.
Organisations need to ensure that their leaders are trained and developed to be:
- Known for continuing to maintain or develop an internal culture of supporting employees as ‘great people’ within the organisation
- Creative and innovative to deal effectively with reductions in organisational revenue and financial difficult of potential downsizing
- Resilient and able to ride out the difficult times and ensure that the organization continues to flourish
- Ethical and transparent in their leadership in difficult times to keep the employees on-board, even more importantly in times of potential redundancy situations
- Loyal to the organisation and willing to keep levelheaded and instill a sense of calm and effectiveness in recessionary times.
The key here is that often, in recessionary times, staff turnover or churn increases as employees become more nervous about the organisation’s ability to survive in line with its current vision and mission. The cost of losing employees, who seek other more stable organisations, is high for an organisation to bare from a range of perspectives.
The Tangibles of Continuing Investment in Training and Development
Organisations are currently grappling with the actual tangible evidence of continuing to invest in training for employees, but some of the key metrics which can be measured pre- and post- recessionary times to analyse the impact of development are:
- Senior management turnover
- Continuous employee satisfaction surveys
- Achievement of core organizational objectives
- The trajectory of growth or decline in profitability
As with all organisations, it is the responsibility of the Board to ensure that employees are treated with respect and dignity in difficult times. Employees need to feel valued and that they have an important role in helping to thrive in recessionary times and make a personal difference to the organisation. This means that it could be argued that even more focus of employees is required, and the development of a strong people culture, i.e. ‘we are all in it together’ is of paramount importance.
Great People Culture in Recessionary Times
There are many excellent organisations who have mastered the concept of the ‘great people’ culture and lessons can be drawn from their success in difficult economic environments. Timpson Group has been growing from success to success as a family grown business for over 150 years, which started with making, selling and repairing shoes. Their strapline confirms their investment in their employees i.e. ‘Timpson: Great Service by Great People’. The Timpson Group has expanded and diversified significantly and now includes within their ‘family’: Max Spielman, Snappy Snaps, Johnson’s The Cleaners, Timpson Locksmiths, Jeeves, Barber Shop by Timpson and The Watch Lab. Timpson pride themselves in their belief that their business is about people - not numbers. Indeed, James Timpson, CEO of the Timpson Group, constantly speaks about the Timpson people philosophy which includes: “employing good people, with lots of personality, give them lots of training, let them get on with it, and look after them well.” This has been a tried and tested formula for Timpsons success over many years (www.timpson.co.uk).
Continue to Treat Employees Well
So, in conclusion, it may be argued that the way to prosper in recessionary times is to invest even more in employees’ skills development, to gain their loyalty and commitment to achieve continued success. Getting the people culture right is so important as evidenced by those organisations who are still thriving and making a difference during this recession.
