Learning and development is a lot like advertising; both are often the first department to be scaled back or eliminated during budget cuts. It’s a risky move, considering that Henry Ford once said, “A man who stops advertising to save money is like a man who stops a clock to save time.” So, too, is learning critical to business success.
Sadly, it looks like another “belt-tightening” is headed this way in the next year or two. What can you start doing to ensure L&D is A-OK?
Bracing for the Coming Crisis
Many business leaders claim that there’s a slowdown coming in the next few years. Hedge fund titan Ray Dalio of Bridgewater Associates sees “significant risk” of a recession as early as 2020. UCLA Anderson School of Management’s senior economist, David Shulman, predicts slow growth at the end of this year, with a recessionary pace coming in 2020. Major investors are identifying the same trends, with just 49% of professional money managers saying they’re bullish in a recent poll by Barron’s. Outside the U.S., economies including China’s are already feeling the squeeze, according to The New York Times.
When leaders see the clouds gathering overhead, they typically cut spending. In a recent Wall Street Journal article, journalist Lauren Weber noted two interesting statistics about learning in our economy. First, while nearly half of the 1,200 leaders in a recent Accenture survey say that skill shortages are a major concern of their business, only 3% are significantly increasing their training budgets over the next three years.
Second, “Employers have long shown a reluctance to invest the dollars needed to successfully retrain large swaths of staff, even when the economy is strong. … And as the economy declines, training budgets are typically slashed. One paper found a 28% decline in employer-funded training between 2001 and 2009.”
To stay competitive in the future, companies need to take learning seriously. How can you, as an L&D leader, thrive during the crunch?
Three Strategies to Consider
Sell Soft Skills
Cutting soft skills training is counterintuitive, because these skills are the most important precisely when the going gets tough. Soft skills are also critical for the jobs and companies of the future. In short, don’t shy away from soft skills — lean into them.
Deloitte’s 2019 Global HCM Trends report explains today’s in-demand jobs this way:
New research shows that the jobs in highest demand today, and those with the fastest acceleration in wages, are so-called “hybrid jobs” that bring together technical skills, including technology operations and data analysis and interpretation, with “soft” skills in areas such as communication, service, and collaboration.
These hybrid jobs, together with new technology and changing business models, require soft skills. But soft skills are hard to teach, right? Not necessarily. We can rewire our brains to better adapt to social contexts and demands.
Show the Fundamentals
The previous two economic downturns that affected L&D spending to some degree reflected the technology of the time. The brief downturn at the end of the 1990s saw an interruption of event-based, seminar-style training courses. The 2008 recession proved to be a test of faith in the new “web-based” training technology.
While both marketplace disruptions caused a lot of grief to people in the industry, they served as a mandate to reevaluate business strategies. Creating products that work for users and administrators became imperative for a learning management system (LMS) to stay relevant, and this task will only become more complex as we move forward.
A recent jobs report from the World Economic Forum estimated, “By 2022, no less than 54% of all employees will require significant reskilling and upskilling.”
To ensure that your initiatives pass these tests of faith, deploy an LMS with accurate reporting on business metrics, including leading performance indicators like engagement and adoption.
Embrace Industry Parallels
Consider the impact ride-sharing apps have had on the transportation industry. The market shifted dramatically because a few companies developed innovative ways to facilitate booking, payment and customer feedback. Legacy providers — traditional taxi companies — quickly adjusted to this dramatic market change by responding with similar technology.
Many other industries are going through a similar transition. A key strategy for leaders is to look at how other industries’ disruption will affect your own. For example, when Amazon buys Whole Foods to gather data on purchasing behavior, or when private equity firms invest in health care artificial intelligence (AI) startups (to the tune of $4.3 billion over the last several years, according to CB Insights), what takeaways can you see in the market to determine what you need to invest in going forward? How can you reinvent your strategy by looking at other, unrelated industries?
Three Steps to Turn L&D Into a Critical Business Strategy
Beyond strategy, there are a few ways to bring your company’s leaders on board with your vision. Consider these basic points as you work toward becoming a strategic part of your organization.
1. Understand Your Goals
Your CEO and other key executives and managers establish goals every year for each part of the organization. Find out what they are, be prepared to provide L&D programs to support them, and be able to validate your reasoning.
2. Understand Your Business Fundamentals
Develop a granular understanding of the real goals of the company on both a micro and a macro scale. Learn about your organization’s entire range of products and services. For each one, understand the impact it has on the market, how your customers and clients perceive its value, and its relevance in the marketplace.
3. Customize Your Goals
Although some learning programs may benefit all departments, it’s important to also develop L&D programs to serve discrete department or business unit needs. Also consider the delivery method of the program; people have different preferences for how they learn. Finally, define a measurable result, going beyond course completion, to prove effectiveness and, ultimately, return on investment.
Once you gain an understanding of the overall company goals, business fundamentals and how to customize your goals to fit the organization’s needs, you can start to sell your vision to leaders and gain their buy-in and support.
Market dynamics are changing rapidly, from broad economic factors to narrow industry parallels, and smart learning professionals scoop up insight wherever they can. These insights hopefully provide some clarity on how you can shift your L&D programs from line items to leading innovations.