Business confidence declines in times of weak growth. With it goes investment, morale and innovation. And while confidence has recently improved among business leaders in key Asian and ASEAN markets, little has changed for employees who fear the impact of slow growth on their careers.
Templar consultant, Divya Ahluwalia from our Hong Kong office looks at why investment in learning and development is key in a downturn economy.
Stay one step ahead when times are slow
Investing in learning and development (L&D) programmes is one of the best things a business can do for employees (and productivity) in times of slow growth. In fact, lack of consistent investment in L&D, in both good times and bad, is one of the reasons why companies fail:
‘Many organizations view leadership as a short term…series of episodic events that are funded one year but not the next. Companies that “get it”…invest in developing leaders during good times and bad rather than treating it as a luxury they can only afford in strong years…High-performing companies spend 1.5 to 2 times more on leadership than other companies. [They] reap results that are triple or quadruple the levels of their competitors.’
Economic growth in Asia – and other regions around the world – has slowed down since the global financial crisis of 2008-2009. But even in a downturn economy, companies can maintain high turnover and outperform their competition by investing in L&D.
Why you should invest in learning and development in a downturn economy
Investing in L&D programmes has a direct impact on your business and in a downturn economy, investing in your employees will:
- Boost morale. Investing in L&D tells your employees that you value them and the work that they do, and that they have a future in your company. This improves employee engagement and, according to research, engaged employees deliver more value for their company.
- Improve retention. Retention improves as engagement grows, according to research by Aon. Engaged employees are more likely stay with the company, speak positively about their job and strive for success. This results in increased productivity and lowers employee turnover (reducing the amount spent on hiring), especially in markets like Singapore where turnover rates are the highest in Asia.
- Attract (and retain) young talent. A report by global recruitment agency Hays found that Gen Y employees take their development seriously. Companies offering quality L&D programmes are more likely to attract talented and ambitious young people who would otherwise look to more promising overseas markets for competitive job offers.
- Reduce the capability gap. A capability gap exists when employees can’t perform their duties because they lack proper training. This has an impact on your productivity and revenue, and makes your employees feel unmotivated and unsupported. Investing in L&D can help empower your employees and reduce the capability gap, which is particularly high in Asia and even greater in Southeast Asia.
Invest consistently, not sporadically
You don’t need a big budget to invest consistently in L&D. Fortunately there are many effective options with high ROI (return on investment), such as:
- E-learning and online training. E-learning is a popular L&D tool among companies. You can train large groups of people at once and let employees learn at their own pace. As a result, you’ll save money on formal meetings and training sessions.
- Workshops and face-to-face training. Josh Bersin, the founder of Bersin by Deloitte, believes that 30 to 50 percent of training should be done face-to-face. Depending on the workshop content, sessions run by professionals may be more engaging and effective than e-learning programmes.
- Gamified and interactive mobile learning. Some bigger companies like Deloitte, Xerox and IBM are experimenting with video, gamification and mobile learning as part of their L&D programmes. This enables employees to learn in a familiar format, interacting with content on their smartphones.
Stay strong in the slowdown
According to the IMF and Fortune magazine, global business will continue to slow down; developing economies in Asia buck this trend by accounting for sixty percent of world growth. However the Asian Development Bank (ADB) advises that Asian firms will see growth continue to slow in the near future.
Investing in the human capital of your business – your employees – will help you survive the downturn economy. So focus more on providing ongoing L&D opportunities (and less on benefits and perks) if you want your employees to be more engaged and more motivated to succeed.