Cost cutting in a time of recession is what companies do. But which costs should be cut? Some costs are beneficial and could even contribute to increasing profitability in difficult times, and prepare the company for the economic turnaround.
Gordon Cousins, chairman of Business Today, the board-based simulation training company, argues that there is enough evidence that carefully targeted and appropriate staff training in recessionary times can positively impact the future of the company.
In the UK for example, an open letter to UK employers, the UK Commission for Employment and Skills (UKCES) stated that businesses, business organisations and trade unions in the UK must invest now in building new skills to help get through the recession.
The UKCES has a number of prominent business people on its board. They include Sir Michael Rake, chairman of BT Group; Mervyn Davies CBE, chairman of Standard Chartered; Brendan Barber, general secretary, Trades Union Congress; Richard Lambert, director general, Confederation of British Industry; and Sir Stuart Rose, chairman of Marks & Spencer.
The letter says to cut spending on staff training is a false economy: "Research in 2007 confirms that firms that don't train are 2,5 times more likely to fail than those who do. Now is precisely the time to keep investing in the skills and talents of our people. It is the people we employ who will get us through. When markets are shrinking and order books failing, it is their commitment, productivity and ability to add value that will keep us competitive."
The letter continues: "From our experience in previous downturns, it was the businesses that did invest in their staff which saw the most dynamic recovery."
"Even in these difficult times, there are real opportunities we should seize. In many businesses, it will be easier to find the time to release staff for training. Larger businesses could strengthen their supply chains by developing training in partnership with suppliers. For individuals, committing to training is the best way to maximize future employment opportunity," the UKCES letter concludes.
Cousins say cost cutting is always necessary in any organization. But at the same time businesses should strive to enhance productivity and continually motivate and up skill staff.
"We believe, and have seen practical examples, that training in times of recession can be even more beneficial than in times of economic growth.
It motivates staff. Staff needs to be motivated during times of economic slowdown," he says.
Simulation training, such as that provided by Business Today, is aimed at making staff more aware of the company's focus in its marketplace and the direct effects employee decisions can have on the company's success."
At Transnet Freight Rail the learning related to Transnet's actual railway environment, emphasizing the importance of operational synergy. Delegates were introduced to the functioning of a scheduled railway and the role of each employee in achieving the organization's goals.
The training enabled management and staff, including technical staff, line supervisors and train drivers, to discover how they can personally influence the performance of the business through their everyday activities and decisions, using the custom-designed board-based simulation.
Said one delegate: "The simulation displayed exactly what happens within Transnet on a daily basis and the realities that incidents have on the rail network. The training reinforced the argument that an integrated approach is the best possible solution to the challenges we face."
At Col' Cacchio restaurant at Emperors Palace the focus was to provide restaurant staff with an overall understanding of the business, from the amount of start up capital required to the monthly expenses such as rent, salaries and food purchases. The training also covered customer service and creating a professional dining environment.
At Reckitt Benckiser, the UK-based household, health and personal care Products Company, the Business Today simulation called "Impacting the P&L" has been used on an ongoing basis to train staff to analyse the company's financials including the latest annual report and interim results.
At Sandvik in Australia, the mining construction company, a course called Asset Management Today (AMT) is being run. This simulates scheduled maintenance and breakdowns and shows the importance of being proactive rather than reactive.
At Electable, the Belgian market leader for electricity production and a division of Elia, 250 managerial staff has been trained to convey the Group's new 'Operational Excellence' strategy.
The training covers the functioning of the contract and spot electricity markets, cost structures of the different technologies such as fossil fuel and nuclear power, outage planning, spares management and resource allocation.
Goodyear Dunlop has run the Train the Trainer programmed for staff in Spain, Portugal, England, Czech Republic, Russia and Italy. The simulation reproduces a fast fit workshop. The key training issues are to balance stock and workforce management, and to effectively utilize available machinery and equipment.
About Business Today
The Business Today Group was started 28 years ago and is operational in 29 countries. The company plans to be truly global with a network of international business partners in 50 countries by 2010.
Business Today has developed a range of experiential board-based business simulations which are utilised worldwide as a vehicle for providing staff with a working knowledge of business and finance.
The company will custom design a simulation for the customer. The development team spends time at the company where they gather information and do interviews. This process normally takes between 3 – 6 months depending on the complexity of the company structure.
Business Today have designed and customized over 120 different business simulations. These simulations are built around different types of businesses across many industries, from the electricity, manufacturing and FMCG industry to the insurance industry and banking industry. The simulations incorporate the financial and other business drivers of that type of business.
Business Today is represented in 29 countries namely Australia, Belgium, Bulgaria, Canada/USA, China, Czech Republic, France, Ghana, Hungary, India, Italy, Ireland, Kenya, Korea, Malaysia, Namibia, Poland, Portugal, Romania, Russia, Singapore, South Africa, Spain, Thailand, Turkey, UK, Ukraine, the UAE and Zimbabwe.
Large international clients include Toyota, Royal Bank of Scotland, Nestle, Vodafone, Daimler Chrysler, Roche, SAB Miller, Anglo Gold, Goldfields, Danone, Johnson & Johnson, Elite Strauss, Goodyear Dunlop Europe, Reckitt Benckiser, Unilever and Sandvik.
| < Prev | Next > |
|---|
