When faced with the prospect of slashing budgets, most managers perform an informal risk assessment and want to avoid eliminating positions. So, it is not surprising that training budgets are among the first casualties in any cost containment initiative.

Recent economic turbulence has significantly affected how training occurs within organizations. If managers did not have to decimate their training budgets, they hoarded the dollars in the event more spending sacrifices were needed later in the year to counterbalance flagging sales.

Training has been all but eliminated in organizations located in geographic areas that were most impacted by the financial meltdown, steep real estate value declines, and the automotive crisis. Other firms whose futures are questionable due to their sluggish financial performance have also curtailed training to save money.  Even in organizations that are doing relatively well and have been less negatively impacted by the economy, investments in employee training have been significantly reduced – and it is easy to see why.

What is the Value of Training?
Since few organizations perform Kirkpatrick’s Level 4 assessment to link training outcomes to business goals, most managers have difficulty defending training expenses – except of course in those industries where failure to train could lead to expensive failures to execute, e.g., medicine, healthcare or food preparation. Typically, internal audit is not perceived to be that vital – but why not? 

Failing to train knowledge workers on whose opinions boards of directors rely can prove to be a short-term cost savings, but a long-term liability if the auditors’ performance and judgment is flawed because their knowledge is limited or out-dated.

There are other short- and long-term consequences for failing to provide useful training. In the short run, employees are disappointed and those with designations are concerned. Company-provided continuing education is more than an employee expectation in a profession that rewards (and in many situations requires) advanced degrees and certifications. Long-term, employee stress builds, and talented workers leave.

Employees who are Baby Boomers, Gen Xers, and Millennials share a common outlook: they view themselves as a marketable commodity. In essence, they are the product who will work for the employer that makes the best offer. For each of these different demographic groups, training is a way to increase their market value. Deprive them of training and you have diminished their perceived value.

Ironically, cost cutting has taken a toll on the employees who have survived and retained their jobs. Their salaries are frozen, the term “bonus” has become a dirty word, and hiring freezes are in effect. Essentially, they are stuck. Their morale is down and their stress is up because they are now doing the work that used to be performed by several people. This increases the potential for disgruntled employees, which unfortunately increases overall fraud risk.

While less training is provided, simultaneously there is an increased demand for time management and assertiveness training programs to help the “survivors” get it all done and manage the expectations of their managers, colleagues, and clients. Global organizations are especially hard hit because their employees, particularly the project leaders, grapple with working in virtual teams whose members live in different time zones. 

Ten Actions You Can Take

1. What can a manager do? The following are some options, if you would like to provide training on a limited or non-existent budget.
2. Bring training programs inside instead of sending department members out – assuming there is a common training need and you have some money in the budget.
3. Boost your level of participation in trade groups like The IIA (www.theiia.org), which can be a source of very cost-effective training.
4. Consider volunteering to perform committee work for local trade groups in exchange for being able to attend monthly programs or conferences for free or at a significant discount.
5. If you are in a large organization, check with your HR/Training Department to find out if your company has been accredited to grant CPE credit for courses that are designed and provided in-house. This way, attending in-house programs will still count towards the number of credits needed to maintain the designation you have.
6. Use the internet to identify webinars – some of which are free. While these lack the energy of an interactive session, they are a means of acquiring information and becoming acquainted with topics in 90 minutes or less.
7. Create a department-wide reading list and schedule time to discuss reactions to the material. The reading can be supplemented with self-directed study.
8. Enroll in a self-study program – assuming you have the self-discipline to complete it. This can be an effective way to gain information at your own pace.
9. Have experienced department members make presentations concerning their areas of expertise. This builds presentation skills in those who deliver the message while creating an interactive learning environment.
10. Require those who have attended training sessions or conferences to make summary presentations to the rest of the department. To increase the on-the-job relevancy, these presentations should apply the content covered during the conference or training to the audits or projects currently underway.
11. Make staff meetings more interactive so that team members are engaged and involved. Create discussions that foster information exchange concerning the organization’s current performance and plans.

Training as a Hedge against Future Turnover
The current economic climate is a test of managerial mettle, leadership, and budgetary creativity. Finding inventive ways to continue to train team members despite the cost cuts is a good hedge against turnover and needs to be a management priority.

Given the importance the audit profession places on continuing education, failing to train in the short-term can be a plan to fail in the end.