The Training Economy

The economy is strengthening, but does the Great Recession of 2008— and recent stock market slide—continue to affect the dollars allotted for your learning and development programs?

The economy is officially turning around, with positive financial news reported regularly on the nightly news (barring a setback or two, such as periodic stock market plunges). The question is whether the strengthening economy is trickling down to your training programs. And of the dollars that are allotted, where should they be directed? A Training Top 125 winner, a Training Top 10 Hall of Famer, and two experts share their thoughts on the impact of the economy on training, and how you can continue delivering the learning programs your employees need.

Some companies are experiencing an increase in training funding, at least partially commensurate with the strengthening economy. Compass Group North America, which owns Training Top 125er Morrison Healthcare, is experiencing a strong investment in learning and development. “Compass Group has increased its investment in training for salaried associates as the company has expanded,” says Eileen Springer, senior vice president, Talent Acquisition and Development. “For example, we offer a variety of courses via our Learning Management System (LMS) and third-party partners, and have greatly expanded our in-house offerings targeting unit managers, multi-unit managers, and leadership programs.”

The company has a systematic process for ascertaining needed training dollars, and then directing the funds to the proper projects and purchases. “Each of our businesses has a Talent Plan, where the HR leaders work closely with the L&D subject matter experts (SMEs) to understand timing, cost, and delivery methods for the anticipated needs in the upcoming year,” says Springer. “By attending business unit leadership meetings and participating in the planning sessions, we are able to plan ahead for the number of seats needed for each management/ leadership program well in advance.”

The LMS the company recently invested in, as a result of the increase in funding, will have long-lasting impact in the organization, and Springer notes that the purchase of the LMS has helped enable Learning professionals at Compass Group to create a new framework for delivering training. “We also recently created an L&D Center of Expertise, which is focused on new delivery methods and current practices in instructional design, with an emphasis on delivering programs in a more flexible way, such as providing choices for participants to meet minimum requirements to reduce time to complete and cost, plus target the learning to the individual,” she says. “Some of our programs, which used to be delivered in a traditional classroom setting, now will be blended or move completely to online content, saving on travel and time out of office.”

The globalization of business has been going on for years, but companies are still trying to gain their footing as global entities. “Our research shows that the business environment is fundamentally reshaping in response to global mega-trends, such as changes in global economic power, technology breakthroughs, and demographic shifts,” says Mary Lyons, Advisory principal with Training Top 10 Hall of Famer PwC, who specializes in helping businesses transform their human capital function. “Business strategies and operating models are evolving at a new velocity in response, and as such, organizations are adapting their talent strategies.”

Lyons says the needs of the global company are affecting even the modes of training delivered to learners. “We are seeing more companies consider ways to leverage experiential learning concepts to develop their professionals. For some, this is a formal mentorship program, while others make greater use of less formal shadowing activities,” she says. “For instance, by teaming highpotential employees with strong leaders and high-performance teams, overall development of high-potential employees is accelerated. By aligning high potentials with leaders and teams in order to focus on the development of specific capabilities such as technical skills, global acumen, or leadership, organizations are trying to deliver the value of today’s nano-degrees.”

Hand-in-hand with the needs of being a global organization is the need for highly evolved “people skills.” As employees reach across the world more easily than ever before to communicate, they need to know how to approach others, and how to work together toward a common goal. Developing these people skills, fortunately, is also amenable to staying budget conscious. “Companies are leveraging alternative development strategies to help mitigate costs while maintaining—or sometimes enhancing—effectiveness,” Lyons says. “They are challenging themselves to develop their people’s skills in news ways, including blended learning, virtual classroom settings, and on the job. For example, some companies have been focusing on rotational assignments as a means to expand the understanding and skills that are essential to the organization. These assignments have been used effectively as part of the onboarding process and as a component of a leadership development program.”

The economy is strengthening, and making it easier for companies to invest in training, but some organizations, regardless of the economy, are more likely to spend money on learning and development, says Michael Bleadorn, vice president and practice lead for North America for Right Management, the global workforce consulting arm of ManpowerGroup. “The amount organizations are prepared to invest in their people often is tied more to corporate culture than profits,” he says. “Obviously, when times are tough, everybody cuts back, but as companies have started to grow again, and merger and acquisition activity has picked up, it is the organizations that view their employees more as a strategic resource, rather than an interchangeable commodity, that we see investing in their workforces.”

Bleadorn says that along with a continuous investment in training, forward-looking companies are focused on delivering programs that drive innovation. However, they want this innovation to take place in what is often a pared-down environment. “What we hear more today, is clients looking for development programs that help drive innovation and simplification throughout the corporation,” he says. “Having spent years painfully slimming down and becoming more efficient, nobody is interested in adding back layers of bureaucratic complexity. However, developing a more creative culture that can adapt to new technology and changing market forces is widely seen as crucial.”

In addition, Bleadorn says there is a trend now to spend more money on assessment tools that help companies determine which up-and-coming employees will be ready to step into leadership roles. With Baby Boomers quickly advancing toward retirement, organizations realize they will soon—if they don’t already—have open slots to fill. “Programs targeting high-potential talent are booming, because they tend to deliver clear, measurable results,” says Bleadorn. “Assessment and development tools benefit from this trend, too, because they can offer a clear measure of where companies are strong or weak on talent, and how that relates to turnover and the company’s bottom line.”

Whatever dollars you are allotted will go further if you tie it to your company’s long-term strategic goals, says Edward G. Brown, co-founder of Cohen Brown Management Group, which offers change management consulting and training for the financial services industry. “When a company feels the effects of a downturn, top management doesn’t keep doing the same thing. They adopt a strategy and tactics to adapt to the new environment. And when they do, that demands equally strategic adaptations from their Training leaders,” says Brown. 

As an example, he points to a recent change in banking regulations that strictly limited banks’ ability to charge fees that previously had been a significant source of income.

The loss of this income demanded that banks come up with other ways of generating revenue. They needed to develop more high-priced products and attract more profitable customers, while lowering the cost of serving unprofitable customers.

Some of the Training departments at these banks were able to work with executives to tailor training to these new challenges, while others floundered. “We saw banks’ Training departments rise to the occasion with compliance training around the new regulations. But when it came to supporting the new sales strategy, some simply offered refresher courses of their general sales training,” he says. “What they needed were highly specific programs for the new strategy: a deep dive into the challenges of selling high-priced products, or how to overcome the specific objections that affluent customers tend to make, or new scripts for interacting with unprofitable customers. So it is important that Training ‘be in the room’ where corporate strategy is defined, so they can tailor their budgets accordingly.”

Brown says understanding the mindset of management is key to convincing them to fund the programs you have in mind. “Ask yourself what management is trying to accomplish: more sales, better service, greater customer retention? ‘If we fail to offer training on X, what will it cost us in terms of lost sales, service, or customers?’ That’s how you figure out how much you can spend,” he explains. “‘If my technicians don’t know how to use tablets in the field to analyze data from the cloud for making on-the-spot buy/don’t buy decisions, that could cost us $1 million in missed revenue.’ There’s your answer—you can afford to spend half a million dollars on technician tablet training. Whatever you spend on training, you should be able to bring in twice that—that’s a decent rule of thumb. You’ll come out ahead this year, and by next year, it’s all gravy. That’s a rationale process top management will understand and appreciate.


  • Create, or learn how to navigate, your company’s system for measuring monetary needs of new training programs.
  • Make investments count. If you invest in a new learning management system, find ways to enhance your offerings or change the way learning is delivered.
  • Tie requests for additional funds to the new needs your company may have in a global economy, such as for more distance learning or a new intranet with greater ability for informal interaction, social media-style.
  • Market the contributions of the Learning & Development department so a culture of investment in training is created. That way, even when money is tight, L&D still will be at the top of the list of recipients.
  • Tie requests for training dollars to long-term corporate strategy. Explain how new training programs will help support new product development or the rollout and marketing of new products and services.
Lorri Freifeld
Lorri Freifeld is the editor/publisher of Training magazine. She writes on a number of topics, including talent management, training technology, and leadership development. She spearheads two awards programs: the Training APEX Awards and Emerging Training Leaders. A writer/editor for the last 30 years, she has held editing positions at a variety of publications and holds a Master’s degree in journalism from New York University.