Importance of staff training during an economic downturn | Page 2 | Sunday Observer

Importance of staff training during an economic downturn

25 September, 2022

Employee training and development are crucial components of human resources development and their significance grows further during economic downturns around the world.

This means that there are additional demands on management at all levels to be more adaptable, flexible, and focused during times of recession and the issues that result for organisations at all levels. Therefore, in times of economic uncertainty, only highly qualified and self-driven staff would be able to protect their companies from failure.

Can training and retraining programs help during an economic downturn? Certainly, they aim to keep people in jobs and also to help provide a pathway back into employment for those who have lost their jobs due to the crisis. During times of crisis, training and retraining programmes can function as an economic stabiliser, help address underlying skills gaps, and ensure that the unemployed remain connected to the labour market, which may be useful in a re-recruiting scenario.

What training mechanisms were used by employers? The midst of an economic crisis is a challenging time for any enterprise to go on board with an investment in skills development. Even then, employers made efforts to offer workers opportunities for training. For example, adopting less expensive training methods such as internal training through the available experts and online courses can be done reasonably effectively.


Effective commitment to employee training and development can offer companies a number of benefits, including high levels of employee motivation and greater responsibilities to complete their respective job obligations.

Employees’ individual learning styles must be considered and addressed when developing and implementing employee training and development programs.The best results can be derived by utilising learning styles and methods such as visual, aural, logical, and social.

Classical conditioning techniques should be included in programs for worker training and development. Conditioning theory specifically emphasises the function of stimuli and unconditioned responses to them during the learning process.

Managers, particularly those who are in performance-based functions, are advised to give serious attention to the quality of training to avoid misconceptions about the negative factors of the recession. Pessimistic content in a training programme may have a negative impact on organisational performance.

In Sri Lanka, commercial entities are going through an extremely tough patch influenced by the ongoing gruesome economic crisis. When in crisis, throughout the world, enterprises involved in knowledge-intensive sectors, multinationals, and medium and large enterprises were more active in training than small-scale businesses that usually neglect or overlook its importance.

Businesses, particularly small and medium-scale enterprises, are under tremendous pressure to retain cost-conscious customers. Business managers are under the gun to do the maximum with the minimum resources to keep employees motivated and retain their focus.

As the economy moves unsteadily, small and medium business enterprises, as the first victims, were forced to follow stringent strategic moves such as budget cuts, employee layoffs, slashing marketing and advertising expenditures. However, they should realise that when dealing with economic slumps, they have to be drastically aware of employee talent in their operations.


There are reasons why staff training is critical for an organisation to survive through the economic recession. Boosting morale, self-esteem, and drive of workers, at all levels, is important when the market takes a nose-dive.

Job security can be a major concern for employees as they visibly see a downturn in the revenues of their employers. They also feel that replacement employment is also hard to find. Conducting training programmes with low budgets reinforces the organisation’s commitment to its employees. This can radically increase engagement and build up renewed trust.

By laying off staff, the organisation loses knowledge, experience, and productivity. Most often, regardless of the size or volume of revenue of the business, the knowledge and on-the-job experience of any employee are vitally essential. This is why employee turnover is regarded as a crucial factor in the sustainability and growth of a business. However, staff training helps fill the gaps in the remaining team members.

In order to successfully sail through a hard time and unprecedented changes, companies need the most knowledgeable employees. These changes during this period need adjustments to both day-to-day operations and the short-term survival of the business.

Hence, retaining talent is an extremely important aspect to consider seriously, as new recruitment of talents can be an expensive exercise. Right now, companies need to retain their best workers. Training increases loyalty, avoids time-consuming recruitment and prevents turnover.

Creative ideas

Training programs inspire innovation. Tough economic times demand new thinking and new strategies. Training, perhaps with brainstorming, encourages employees to think outside the box and come up with innovative ideas that can impact the bottom line.

Usually, when companies allow workers to think independently, they may produce more creative ideas than recognised think tanks. Therefore, conducting training sessions and giving complete discretion to make suggestions may increase staff motivation on one hand and lead to better strategies on the other.

The competitors are also going through the same difficulties and adapting similar methods to confront the immediate challenge. Hence, if training continues in an organisation (just as almost every successful conglomerate throughout the globe does during recessions), it can edge out the competition and pull ahead.

Evaluating the organisation’s current status, including possible revenue losses specifically, and reaffirming future plans is an essential step in troubled times. Entrepreneurs must re-strategise their overall effort, especially when there is no concrete evidence of the end of the crisis period. Defining existing workforce skills, knowledge, prevailing mindset, and other personal traits needs to be studied to create plans.

Assumptions of business owners that lack of time for training is one of the key reasons companies find shortfalls in employee skills. Organisations can utilise the slow-down period for upskilling. The employees can be easily influenced to learn new skills or enhance their job-related knowledge. This can again be a great motivator and confidence booster for an uncertain worker who is worried about the future.

These upskilling efforts should also be agile and flexible. Workers will be told that while improving skills, they may have to take on additional duties to assist the organisation in sailing through the storm. They must be taught how their existing duties can be improved differently.

The owners and the senior managers must lead by example during recessions. Constant reminders and encouragement by senior staff about future opportunities are essential. Discussing the benefits they can derive if they are successful in weathering the storm and other positive results that may be in their path through training sessions can be tremendously effective.

Finally, Alvin Toffler, futurist, business leader, and author of Future Shock, quoted, “The illiterate of the future will not be the person who cannot read. It will be the person who does not know how to learn.” Therefore, encouraging and influencing the workforce by encouraging them to learn by providing training and upskilling them must be the commitment of any business venture. Although the task may be complicated, finding opportunities is a winning strategy.