Recession Rebound

By Margery Weinstein

A return to normal after a crisis is a good thing. Who doesn’t want back what once seemed lost? The problem is it usually isn’t a simple task figuring out how to patch together a scaled-back training program. With the infamous 2008/2009 recession hopefully slipping into the rearview mirror, and companies beginning to feel secure enough to think about bolstering training efforts again, how do you make the most of this opportunity? Companies are finding ways to assess their current needs compared to their needs over the last couple of years—and the scaled-back resources they had to make do with—and ramping up again.

Reexamine, Regroup

For Henkel, the company behind brands such as Dial, Purex, got2b, and Loctite, this year’s economic recovery means it’s time to think about how to tailor pared-down programming for more robust times.

Like many companies, Henkel decided once the recession set in that it needed to limit business travel. With employee training programs such as off-site retreats and other development events affected, the company’s trainers needed to be creative. In 2009, as the economy started to show signs of life, the opportunity for employees to travel gradually increased. Henkel recognized skeleton travel budgets as a precaution that could be loosened up on as better financial times returned.

“During fourth quarter 2008, we temporarily suspended all global and regional training programs that required international and domestic air travel,” says Director, Talent Acquisition and Development Chip Heginbotham. “This temporary measure was lifted by the end of the first quarter of 2009.” Similarly, the programming that shrunk along with the business travel budget also is returning back to what it was pre-recession, and then some: “Since then, we have added four new courses and several offerings of existing programs such that we are providing more employee development opportunities on an ongoing basis than we were pre-recession.”

Henkel’s trainers also now are operating with some useful lessons in hand. The country’s financial collapse forced them to think of ways to deliver training on a tightened budget. That challenge has instilled creativity in training that will be put to good use for years to come. “Henkel employs several methods, such as: quantity discounts on materials, more internal certifications for delivering programs (e.g., Fierce Conversations, Covey’s 7 Habits, etc.), consolidation, and aggressive pricing with vendors and hotels/venues,” says Heginbotham of tactics trainers used to survive the recession, which also come in handy in heartier times. Good times or no, after all, what company doesn’t strive to save thousands of dollars in training expenses? “We also started running programs back-to-back to reduce instructor travel costs. For example, we recently ran two, seven-day Basics in International Management programs in Scottsdale, AZ, with Cranfield Business School from the UK. This allowed us to save approximately $20,000 on a single program.”

Even as Henkel grew adept at using creative strategies to make do with less to continue offering the same ongoing quality training programs, it also learned to roll out new programming in anticipation of a financial recovery, while still keeping costs in check.
For People Leadership, the company’s new leader training program, the curriculum was updated for improvement, as well as a reduced budget. “We revised the entire program to be more streamlined and focused,” says Heginbotham. “Through higher- quality interactive exercises, and between-session check-ups (conference calls), we improved [Kirkpatrick] Level 1-3 evaluation scores and saved the business 33 percent of cost and time investment by reducing travel costs and employee time by reducing the face-to-face time of the class.”

Henkel also makes the most of training vendors, many of which are still in a recessionary mind-set and more open than usual to making cost-cutting deals. “For other programs, such as Decision Base, we leverage a guaranteed number of ongoing programs to drastically reduce developmental costs,” Heginbotham explains. “Due to the ongoing fragile nature of the economy, vendors are still willing to maintain or lower current prices if it means more business in the future.”

Just as functioning in a recession teaches trainers how to be resourceful, it also teaches them the mistakes they are apt to make when the panic of a financial collapse sets in. Heginbotham cites “hasty reactions of suspending all training or suspending all travel associated with training” as a short-sighted measure that he is glad is being mended along with the economy. “It may seem attractive to suspend all travel to save costs,” he says. “However, there also may be substantial cancellation fees for vendors, hotels, etc. Additionally, if companies are quick to suspend all training, the unintended message to employees can be ‘Your development is not critical.’”

The scale-back that occurred during the recession forced Heginbotham and his team to consider which training programs should never be given short shrift. “Companies should never skimp on ethics and compliance training, as well as business skills training (financials, sales), which generates revenue and lowers operating costs,” he says. “Companies can cut back on the amount of formal leadership training, and employ
additional developmental opportunities such as mentoring and stretch assignments. Additionally, companies may consider low-cost alternatives such as senior leader panel discussions and informal article reviews (such as Harvard Business Review), in lieu of a formal training class to bring costs down.”

Technology also can come in handy to 21st century trainers operating on a scaled-back budget. “Henkel has created and deployed a New Employee Launch Pad in place of more expensive, labor-intensive, hands-on new employee orientations. We also have utilized article discussions (HBR) in place of formal training classes,” says Heginbotham.
He notes the company also makes use of technology to cut down on backend expenses. “Henkel has begun using technology more for administration and logistics associated with training program execution. We also pay for conveniences (e.g., Mimeo.com for training manual generation and shipping), which allow us to add and manage more programs without increasing central learning and development staff. In fact, we actually reduced staff and increased offerings 25 percent over the last two years.”

Continue Building Top Talent

Construction management company Gilbane learned that a recession is no time to stop building the skills and talents of your greatest resource—your employees. Vice President of Learning and Development Diane Fasching says the company didn’t blink in continuing to move forward even as the economy collapsed.

“While the recession hit construction heavily and we downsized, Gilbane responded by continuing to build talent,” she says. “Our adaptations included keeping our training curricula intact, but changing the methods of delivery. Many existing curriculum courses, once instructor led, were converted to online, along with a quadrupling of Webinar use.” The company increased its use of computer-based simulations and other electronic training and workforce management tools. “Not only did we use in-house experts to deliver relevant information, but we reached out to external resources, such as consultants, contractors, and customers,” says Fasching. “This ensured that a wide variety of relevant topics could be easily taken without disrupting work.”

The company found that a recession is a good time to think about which resources, training and otherwise, your business cannot do without. “Gilbane identified focus courses that became required. These dealt with relationships, project closeout, and diversity—all deemed essential to our growth and success,” says Fasching. Those top learning priorities then were focused on through programming, as well as enhanced communication tools that allowed employees to better support each other in their work. “Very importantly, we promoted the sharing of expertise and a free flow of learning via our knowledgenet, which included a Lessons Learned Database and Ask the Expert feature. This allowed Gilbane employees to export information across traditional boundaries and enrich the company.”

The company also broadened the lines of communication between top management and employees. “Our president instituted a blog; our CEO started an ‘Ask our CEO’ column; and ‘State of the Company’ broadcasts were held every other month,” says Fasching. “Social networking provided new intelligence sources.”

Even for programs the company needed to curtail, there were workarounds to ensure employee preparedness did not fall through the corporate cracks. “While the economy forced us to abandon in-person onboarding, we creatively morphed to ‘virtual onboarding,’” Fasching points out. “Instructor-led courses, once taught at corporate headquarters, were transmitted virtually to each region. This allowed Gilbane to introduce new employees to its leaders, values, culture, and business.”

All in all, the recession boosted the ability of Gilbane’s trainers to deliver learning and development, a skill improvement that will stay with them into the recovery. “The economy forced a faster conversion to these modalities, and they have been favorably received,” Fasching notes. “It helped us transform our dependency on instructor-led training to more advantageous delivery methods. Additionally, the ease of updating online courses, Webinars, simulations, etc., allows us to update facts and prevent obsolete information from being promulgated.”

One training resource Fasching says she’s glad Gilbane didn’t try to cut back on is technology—something no company during a recession should target, she believes. “Technology and interpersonal/leadership programs need to be kept in balance,” she says. “The ways we access information and communicate and interact with each other will transform organizations. Training needs to partner with Information Services to harness the brainpower of the many to stay at the forefront of innovation. Change is the new norm.” She points out that the company is increasing its use of on-the-job tools to boost competency and productivity: “We’ve learned to embed links into our online courses that allow employees to access the latest documentation on construction topics.”
It also helps—whatever the state of the economy—to give employees greater power over their development. “Most importantly, we’ve empowered our employees to choose from a larger array of offerings that are specific to their needs,” says Fasching. “Rather than strictly adhering to a step-by-step curriculum, they are accessing information in a just-in-time fashion.”

Re-Imagine Training

At a large hospitality company, the recession—and its aftermath—meant keeping learning and objectives intact, but re-imagining many programs so they could be delivered in new and unique ways. The company also added more blended programs to its repertoire and increased the social content of all programs. The company, a Learning and Development spokesperson says, also educated trainers to deliver learning in new ways. “We’ve developed new trainers within the organization to deliver training in the form of bite-sized programming on a more regular basis as opposed to a full-day of training.”

The spokesperson says the company will keep the combination of formal and informal learning methods (including Web 2.0 technologies), “which worked well for us during this period, while also remaining focused on our core, foundational programs and our high-impact experiential learning programs.”

In addition to re-jiggered training, the company now is producing and printing as much of its training materials itself as possible. What’s more, training now is increasingly apt to take place at unconventional times. “Our learning managers have become creative, offering training on weekends and at other times that ensure the operations aren’t overly burdened.”

The biggest mistake a company can make is to focus only on the training and to reduce the experiential learning activities that enhance learning retention and make the overall learning experience a fun and worthwhile event, the spokesperson says. “Reducing a two-day program into a six-hour program may make sense from a numbers point of view, but could potentially harm the reputation of training in the organization if promised deliverables aren’t achieved by ‘trained’ employees. Areas that should never be scaled back include meaningful and desirable experiential learning activities (role-play with focused feedback, etc.).” Most important, the spokesperson adds, “any programs that relate to new employee onboarding and orientation should not be scaled back. Companies must continue setting up these employees for long-term success within the organization.”

Lessons Learned

The recession was a learning experience for many companies, particularly when it came to training. Some lessons learned from the recession will carry forward even into more robust times, including:

• Think about which resources, training and otherwise, your business cannot do without. Then identify focus courses that become required.
• Broaden the lines of communication between top management and employees, including regular State of the Company broadcasts, a blog by the president, or Ask the CEO column in a newsletter.
• Budget cuts don’t always mean less or lower-quality training; instead, they can engender greater creativity and innovation in training content and delivery.
• Keep in mind that the economy eventually will bounce back, and when a company goes back into full-scale new product development mode, additional training will be needed, so you don’t want to be caught unprepared.
• If companies are quick to suspend all training, the unintended message to employees can be: “Your development is not critical.”
• Give employees greater power over their development, both by offering them quality content and an array of learning experiences/delivery methods.