Building the case for L&D in a recession

Gustaf Nordbäck explains why, during tricky economic times, businesses should not view learning and development as a luxury that can be cut

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With the cost of living and fuel crises coming so quickly on the back of the Covid pandemic, rumours are afoot about the potential for a 2022 recession. While the Bank of England is currently only predicting a downturn, there is a feeling of anxiety in business, and the battening down of hatches has begun. It’s a natural and sensible reaction to wish to protect resources when potentially tough times lie ahead. But not all efficiencies work for the good of a business. And it’s when times are difficult that you need your teams to be performing at their best. So, is there an argument for making learning and development a priority during times of recession?

The value of L&D 

Whisper the words ‘recession’ and ‘downturn’ and companies will immediately begin to assess their overheads, identifying ‘luxury’ expenditure for potential reduction or removal. And inevitably, L&D becomes an easy target. Depending on the scale of the business and format of delivery, L&D can be pricey. And it’s easy to dismiss it as not immediately relevant to the success of your business. Something that can be put aside, temporarily, without ill effect. But is that really the case?

While careful management is always essential, it’s having access to the right people and the right skills that will carry a company through turbulent times. L&D helps teams gain the skills your business needs to flourish in adversity, to find creative solutions for difficult problems, and to stay ahead of the curve, so that you’re always ready to maximise opportunities when the economy starts to show signs of improvement. Perhaps your organisation already has that talent. Perhaps you have no need to bring any other employees further forward, or prepare them for the next steps, because you’re totally confident in their skills and their loyalty. But you’d be in the minority, partly because of the constant evolution of business, and partly because L&D has a proven positive impact on retention. 

When companies invest in their people, they create loyalty and improve both morale and employee engagement while strengthening company culture. And this in turn helps to protect a business’s assets by reducing churn, which is vital at a time of international skills shortages, as well as when recruitment is so expensive, with the average cost of employee turnover sitting at in excess of £30,000

Integrating L&D in a company’s growth strategy

L&D immediately stops being perceived as a luxury when it feeds into a business’s core infrastructure, answering current problems and safeguarding against future difficulties. And for that to happen, L&D needs to be incorporated into a company’s growth strategy. And that means doing several different things:

  • Identifying your company’s overall priorities: To be valuable, your learning strategy must be aligned with your business goals, whether that’s diversification,  digital transformation, or some other area specific to your business.

  • Identifying skill gaps: Once you’re sure of your business’s priorities, you need to assess what you currently can and can’t do. By understanding the capabilities of your employees at each level of your infrastructure, you will be better positioned to identify skillset gaps as well as gaps that may form in the future.

  • Assessing the form of learning most suited to your business and your teams: Digital learning has dominated in recent years, particularly in light of the pandemic, in part because it is a highly cost-effective solution. But research suggests that hybrid learning and social and collaborative learning can render better results. It is best to provide a flexible, customisable solution that allows employees to work at a pace that is comfortable to them, while still delivering trackable gains.

  • Taking an integrated approach: Too often, L&D is viewed as a separate concern to the daily processes of a business. But at its most effective and valuable, it is integrated with daily operations, bringing relevance to training, which will better engage employees and better benefit your business. 

In times of downturn or financial difficulty, businesses need employees who are capable of navigating through problems and change. By investing in the right places, and ensuring that your L&D budget is being used to effect the results you need, you are futureproofing your business – helping to improve business impact, retain staff and attract new talent. 

Gustaf Nordbäck is CEO of Headspring Executive, a joint venture between the Financial Times and IE Business School