By Stewart, Joanne L.
T&D , Vol. 65, No. 7
In today's marketplace, resources must be cut to meet profit goals. Companies often turn to training budgets first. Before automatically decreasing training budgets, companies may want to consider some top global trends, which, according to the "SHRM Workplace Forecast," are most likely to have a major strategic impact on the workplace, including
* a decline in the value of the U.S. dollar
* an overall decline in workforce readiness of new entrants to the labor market in the United States as compared to other countries
* increased global competition
* poor educational performance of U.S. students compared with global competitors (2006-2007).
Additional influences on the workplace contribute to some frightening statistics and trends:
* Forty-two percent of new workforce applicants with high school diplomas or GEDs are deficient in basic work skills--readiness skills they should already have when hired.
* The United States is 20th in the world in high school graduation rate.
* Declines in funding of vocational training at community colleges have resulted in a limited number of training programs. Furthermore, the negative stigma of the trades is preventing its growth as a career option. "The pressure to earn a bachelor's degree draws young people away from occupational training, particularly occupations that do not require college," says Richard Sennett, a New York University sociologist.
* According to the U.S. Bureau of Labor Statistics, the average age of a craft professional is 47 years.
* By 2014, the number of workers aged 35 to 44 years is projected to decline by 2.8 million.
* Employees are needed to replace the knowledge and skills of Baby Boomers as they retire or move into semiretirement.
All of these trends indicate a major shortage in future organizational leadership and overall skilled workers. As proof of the threat, 240,000 jobs for skilled workers go unfilled annually, even in a recession. For example, the Cianbro Corporation, a heavy construction company in the Northeast, began its quest to hire 80 experienced welders. It took 18 months to complete the task.
Government data are misleading because they do not represent employers who are begging for skilled workers even in hard times. According to Manpower Inc., 30 percent of companies worldwide are struggling to find skilled workers.
The strategic implications of company leadership and skills shortages are tremendous, and training budgets are often the scapegoat for drastic cuts in overall budgets. But even when training budgets are maintained, it is often difficult to determine how and where to allocate dollars.
Committed to learning and development
On a positive note, many companies have rejected the idea of eliminating training, and have maintained a commitment to learning. According to the ASTD report Learning in Tough Economic Times: How Corporate Learning is Meeting the Challenges, although "4 in 10 respondents said that the economy forced them to reduce learning resources to a high or very high degree, extensive cuts to learning programs or content was the exception, not the rule."
The report shows an overall commitment to training even in a tough economy, with less drastic reductions in training budgets than in previous economic downturns. In 2009, U.S. organizations spent $125.88 billion in employee learning and development and increased per-employee expenditures from $1,068 to $1,081--a 1.2 percent increase.
When considering training budgets, companies may consider the 2006-2007 "SHRM Workplace Forecast," which shows the top actions that organizations take to meet leadership and skilled worker challenges such as
* increased specialized training
* increased overall spending on learning and training initiatives in general
* increased investment in recruiting and retaining knowledgeable workers. …