The continued fall in unemployment remains one of the most enigmatic features of the current economic slowdown and defies previous experience. An analysis of training investment in the past three years tells a similar story.
The latest Chartered Institute 0f Personnel and Development annual training and development survey shows that UK organisations have resisted the temptation to cut training budgets. And it is clear that they have recognised that they can best sustain a recovery by investing in people. They have hoarded labour and invested in workforce skills.
So why is training so important? There is evidence that it improves profitability, but how can we justify or sustain the cost when budgets are being cut?
Learning through training, and other means, improves one's knowledge and ability to do one's job, and in a knowledge-based economy where the advent of knowledge sharing, team working and flat structures is sweeping away the old order, the returns provided by training and learning are at a premium.
The CIPD's research into the impact of people management on business performance shows that HR practices have a bigger impact on the bottom line than research and development. As well as improving performance, training is recognised as one of the key levers in improving innovation and customer service.
This can be more significant during a downturn, when low morale affects productivity. As a growing component of our understanding of how to improve productivity, investment in training shows that employees are not just business fodder. It improves morale and reduces stress levels and absenteeism.
But money is not the answer to everything. In the UK, organisations seem to place too much emphasis on training and not enough on learning. Too many companies adopt a "sheep-dip" approach to training, which does not tune in to individual styles of learning. Trainers must learn to customise and offer continuous learning.
There needs to be a shift away from training as a separate activity towards learning as part of continuous improvement, as well as something the individual wants to do. Organisations must be more flexible in delivery and content.
As more power is devolved to line managers, many are thrown in at the deep end without adequate training. While obvious qualities, such as leadership, should be covered in any training programme, few organisations have responded to changes in the legal environment by providing diversity training, for instance.
Provision does not filter down to all levels. Another CIPD study reveals that less skilled employees are far more likely to take up training, but it is more likely to be offered to better-educated people in higher social classes. While it is important to recruit and retain skilled staff, this should not be done to the detriment of overall workforce productivity. So the challenge is clear: to accelerate the transition from training to learning, to employees at all levels.
Gerwyn Davies is a spokesman for the Chartered Institute of Personnel and Development
This was first published in May 2003