Remember Lessons Learned from the Last Recession: Don’t Cut Training

By Cara Silletto, MBA, CSP

Twelve years ago, when the Great Recession hit and money got tight, businesses had to make cuts. What was one of the first things to go? Training and development. It was the wrong choice.

The COVID-19 economic crisis is going to tempt business leaders to do the same thing. I’m here to warn you: Don’t repeat the mistake.

How do I know it was a mistake? Because for the last seven years, my entire business has focused on helping companies pick up the pieces from slashed training budgets.

  • Here are the types of clients I work with:
  • Turnover has been getting worse year after year despite their efforts.
  • A positive, team-based culture isn’t thriving like they envisioned.
  • They can’t pinpoint why people are leaving.

Their bottom line is suffering, and they’ve got to try something new.

As my team and I work with business leaders to diagnose what is the root cause to increasing turnover, one common factor almost always surfaces. Most will admit that at some point in the past, they’ve made cuts to training and development, specifically for their managers, at nearly all levels in order to focus on higher productivity and profitability.

Their reasons for these cuts are always similar:

  • We’ve got to reduce costs, and training is a no-brainer since it’s not essential for our employees to fulfill their jobs.
  • Training takes people away from doing their jobs, and our staff doesn’t have any spare time.
  • We take the “sink or swim” approach. Good managers who get promoted will figure it out.
  • Our managers don’t need training; we just need employees with a better work ethic. These dang millennials just don’t want to work. Retention was fine until they got here.

Any of these sound familiar?

But there is another factor to consider. In fact, it’s the ONE reason you need to keep training in your budget:

The No. 1 cause for unnecessary employee turnover is poor management. Companies might save a few bucks by cutting their managers’ training, but, ultimately, they’ll be spending much more in the employee turnover costs that inevitably follow.

Today, I’m petrified for so many businesses not simply because the pandemic has wreaked havoc on many budgets, but because what I’m hearing again is, “We’ve got to cut training and development this year.” And this at a time when managers and supervisors need more support and training resources than ever.

Many do not know how to manage remote workers; many do not know how to train new hires virtually; many still avoid conflict and aren’t comfortable being transparent; many are burned out and don’t know how to help themselves or their team members through this difficult time.

Now is NOT the time to cut management training budgets. You need strong managers and must develop many to get there, or you will continue to watch talent walk out the door that you can’t afford to lose.

Keep in mind, staff (and future candidates) will remember how leaders treated them during this difficult time, and the companies that will come out ahead in the end will be those who invested in their leaders’ abilities. Communication, trust and leadership are not soft skills. They are critical skills and they are developed over time – much faster with effective training and coaching.

Depending on your industry, you may be busier than ever, you may be struggling to pay bills, or you may simply be trying to hunker down and weather this storm. No matter the status, keep developing your people. Continue providing resources, whether it’s free valuable articles or videos you can share or continuing more comprehensive planned leadership development programs.

And if you must cut the training budget this year, be sure there’s a plan to reinstate those committed dollars for future years. Make the case for investing in your leaders in order to stabilize staffing and maintain your productivity and profitability. Otherwise, you’ll be right back where all my clients were when they called – wondering what happened and wishing they hadn’t cut one of the most critical components of their success. Or worse yet, closed for good.

Cara Silletto, MBA, CSP, is a keynote speaker and President of Magnet Culture, a Crescendo Strategies company, focused on reducing unnecessary employee turnover by bridging generational gaps and making managers more effective in their roles. She is the author of Staying Power: Why Your Employees Leave & How to Keep Them Longer and named her in their “Top 10 Company Culture Experts to Watch.” Learn more at

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