Employee Training in a Recession

  • Written By: Phil Simon
  • Published On: May 27 2009

As organizations reassess their staffing levels, many employees are being asked to do more with less. Aside from reducing headcount, many organizations are cutting back on employee-related expenses, even if they can provide long-term benefits. Examples include application training and travel to user groups in which employees can network and exchange best practices. This article discusses the increased importance, benefits, and risks related to employee training in a recession with respect to enterprise systems.

Growing Organization Risks

While understandable and often imperative for the continued survival of an organization, the aforementioned cutbacks promote a vicious cycle of increased organizational risk:

  • Organizations reduce or eliminate formal training and informal opportunities for users to learn how to better utilize enterprise systems.
  • This solidifies many users' bad habits and suboptimal processing methods.
  • At the same time, organizations trim staff, resulting in more work among fewer employees. This means even less time for cross-pollination where employees are trained in multiple jobs.

Organizational risk is compounded if key employees leave the organization and, as is often the case, user documentation is lacking. For example, incumbents may scramble to figure out how Alex ran regular interfaces, Neil matched invoices, Julian filed tax reports with the government, and Nancy created database backups. If Alex, Neil, Julian, and Nancy are no longer with their organizations, then they are, in all likelihood, unable or unwilling to assist their former employers in the event that their help is needed.

Often, the best case scenario is that jobs performed by ex-employees are partially understood by their replacements. Nonetheless, this may very well result in increased risk of error, financial irregularities, expensive engagements with external consultants, or some other highly undesirable outcome. In the extreme, a single employee's departure may result in a missed payroll, an eventual government audit, or security breaches.

Opportunities and Benefits

Organizations with tight budgets may not need to reduce headcount at present. There is a fundamental tension between lean staffing levels and organizational bench strength. Lack of widespread end user application and technical knowledge is dangerous in the event that a key employee decides to walk. Yes, even in these economic times some employees voluntarily leave their jobs for whatever reason.

To this end, organizations should consider expanding employee training, not cutting back. Whether employees are being cross-trained in different functions or learning new technologies altogether, the benefits of training can more than offset their costs. First and foremost, training mitigates the risk of key employee turnover. Second, the mid- or long-term savings of training may more than pay for itself. Two super users with substantial skills and a global perspective may be able to do the work of three or four limited end users, especially if they are skilled in different automation methods. Finally, while hardly tantamount to reassuring nervous employees about their employment futures, training can send a strong message to attendees: the organization wants you to develop your skills. And the message becomes "despite current economic challenges, we are committed to growing our employees' skills and abilities." This attitude may reduce the likelihood of voluntary employee attrition.

Types of Classes: Public versus Private

Once the organization has decided to move forward with training, it has a fundamental decision to make. Where will the class be held?

Organizations that want to build internal expertise in new applications have two choices: They can either send their employees to public or private training classes. Public classes typically take place at vendors' offices or at vendor-approved locations. These classes cost in the neighborhood of $500 per day per student. Many organizations in different stages of an implementation send users to public classes to learn how their systems work in a generic sense. In other words, a payroll manager should not go to a public class intent on learning how to set up and process payroll at her company, although she should walk away with more than a few ideas from the class. Because payroll personnel from other organizations attend public courses, the instructor will discuss the payroll application in general terms.

For public classes, clients travel to vendor sites, sometimes incurring significant travel costs. To the extent that client end users are out of the office, they should be able to focus exclusively on the class and the applications being taught. From a technical perspective, vendors should have sufficient computer terminals and training data areas. In other words, clients need no organizational IT involvement to attend a public class, nor do they necessarily need to bring laptops with the applications already on them.

Private classes are very different than public ones, both in terms of costs and content. For one, it's not uncommon for a vendor to charge upwards of $3,000 or more per day for a customized class at the client's site, because vendors know that client end users will not have to incur travel costs. Thus, from a strict cost standpoint, a private class with more than six people will probably be cost-effective for the organization. As for content, instructors will typically customize agendas specifically for each client. In a private payroll class, for example, the payroll manager can ask many specific questions related to her company's payroll setup and processing.

While, it may be less expensive for clients to host private classes in which trainers come to them, understand that employees attending private classes are in the office. Crises or emergencies can take them away from the class, reducing overall learning. Also, from a technical perspective, the trainer is not going to bring laptops configured with the software and training data areas. Consequently, the amount of IT involvement is much greater than that of a public class. The organization that brings in an instructor at $3,000 per day should ensure well before trainer's arrival that its hardware and software are "up to snuff". Nothing inhibits a class and frustrates all concerned more than "buggy" software and the lack of a proper training data area. The last thing that a client's management wants from a public class is a disaffected end user base.

Outside of a formal class (whether public or private), independent learning has become more populate. Recent advents such as web-based training (WBT) have become increasingly popular. While the cost savings are obvious and the convenience factor is high, remember that employees at their desks are often distracted by daily calls, e-mails, and old-fashioned door knocking. Consequently, the cost of a public course can sometimes be justified by the additional learning that tends to take place in an isolated environment.

Considerations and Caveats

Training for training's sake is fruitless. Organizations need to ensure that their training investments will result in tangible benefits. Users may learn a robust new technology over the course of a three day class. However, this certainly does not equate to mastering it or deploying it in the organization, even for highly motivated and skilled attendees.

Consider two examples. Boris attends a class on Cognos PowerPlay, a robust business intelligence (BI) tool. Patty attends a class on Crystal, a powerful reporting application. Boris and Patty are both highly skilled users who have long expressed to their managers a desire to learn more about each application. During and after their classes, they are excited about the new features and possibilities now available to them. Both are excited to begin using their new toys in their jobs.

This is where the similarities end. Boris simply has no time to use PowerPlay. Building cubes of data takes time and he is simply swamped with his daily responsibilities. While he finds half hour increments every two weeks or so to play around, the phone invariably rings and he forgets much of what he has learned. His excitement for—and knowledge of—the product wanes and PowerPlay never gains traction in the organization.

On the other hand, Patty immediately begins writing Crystal Reports and distributing them to others throughout the organization. She builds on the knowledge and excitement from class and joins online discussion groups promoting best practices. She is able to "kick the tires" on new reports and experiment with different ways of extracting, manipulating, and presenting her organization's data to her internal clients. As a result of her efforts, many users have freed up additional bandwidth; they no longer have to manually compile reports from disparate sources of information. Now, reports arrive via e-mail as attachments with no further manipulation of the data required. Patty's employer saves thousands of dollars in overtime and now has access to accurate and actionable business information. In this case everybody wins: Patty gains valuable skills that will help her be more productive. For its part, the organization will recognize a significant return on investment (ROI) on the course and might even unearth new knowledge through data mining.


The benefits of employee training cannot be viewed in isolation or in a vacuum; they must be considered within the context of the real world. The organization that sends an overworked, overwhelmed end user to class is wasting its money. Forget the fact that the attendee's mind may be back at work throughout the class. Knowing what an application can do—but ultimately not having the time to play around with it at work—will result in attendees not utilizing their newly acquired skills and knowledge. Ultimately, neither the user nor the organization will reap the benefits from the class. Even if the user returns to the application six months or a year later, it is highly unlikely that she or he will remember.

While there are no guarantees that an employee will use a new technology in his or her job after class (much less effectively), organizations can take steps to maximize the chances of this happening. Ensuring that employees have the time to use new technologies is essential. Holding those employees accountable to deploying them via annual objectives and performance reviews can also ensure that employers actually benefit from their training investment. Along with potentially reduced risk from key employee turnover and greater internal system knowledge, application training can be a wise investment for an organization even in a tough economic environment.


Phil Simon is a seasoned independent systems consultant, public speaker, contributor to different media outlets, and the author of the recently released book Why New Systems Fail. He assists organizations in all phases of systems implementations, including vendor selection, project management, business needs analysis, system design, training, system testing, interface and custom report development, and documentation.

Simon is a graduate of the School of Industrial and Labor Relations at Cornell University (MILR) and Carnegie Mellon (BS, Policy and Management). He lives in Northern, New Jersey (US). Visit Simon's web site at philsimonsystems.com or contact him at phil@philsimonsystems.com.

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