Dear Colleague,
I don’t know if we’re in a recession. In fact, nobody will know for sure until July 28th when the government releases its 2nd Quarter economic report.
But as Bob Dylan said, “You don’t have to be a weatherman to know which way the wind blows.” And it certainly seems as if the winds are blowing us toward a significant economic downturn.
Funny thing about recessions, though. Most companies react to them by cutting expenses. Slashing overhead. Reducing staff. Canceling plans for the future, and so on.
In the HR Department, for example, the training and consulting budget is often among the first things to go. Many companies also choose to cut back on advertising and marketing. To the folks in the C-suite, after all, advertising, training, and consulting all look like “unnecessary expenses.”
But in the case of advertising, at least, history has shown that companies who maintain—and even increase—their advertising budget in a recession not only survive the bad times … but come out the other end stronger than ever.
During the Great Depression, for example, America’s two largest cereal companies—Kellogg’s and Post—took opposite approaches to the failing economy.
According to a recent article in Forbes, Post decided to save money by slashing their advertising budget. Kellogg’s, on the other hand, doubled their advertising budget and expanded into the new media of radio. They even introduced a new product called “Rice Krispies.” Contrarian moves like those made Kellogg’s the king of the breakfast business for the next century.
I think the same is true of training and consulting. When the word comes down from upstairs to cut expenses, it’s certainly understandable that HR managers may look at their training and consulting budget as an obvious and tempting target. But is it the right thing to do? I think not. And here are three reasons why:
- Just like with Kellogg’s and Post, maintaining your training during bad times will give you a competitive advantage over organizations who choose to cut theirs.
- Trainers and consultants will help your organization save money. They increase productivity, streamline procedures, and improve efficiency. With the strategic use of trainers and consultants, in other words, you’ll spend less money and get better results.
- You’ll position your organization for a stronger recovery when the good economic times come back. (As they always do.) By making an investment in your human capital, instead of “shorting” it, you’ll come out ahead in the long run.
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So if you really want to cut expenses during the coming recession, start using postage stamps instead of Federal Express. Buy single-ply toilet paper for the restrooms. Give up the private jet and tell your executives to fly coach. Whatever.
But do NOT stop hiring trainers and consultants. Because it’s the wrong thing to do and the wrong time to do it.
I’ll put you in touch with trainers and consultants who can help your organization survive—and thrive—in challenging economic times. And guess what? My service comes at NO CHARGE to you. (Talk about saving money!)
So if the GDP report in July says that yes, indeed, we are in a recession, don’t pull your head in your shell like a turtle.
Instead, take your cue from Rice Krispies and let me help you put some snap, crackle, and pop in your training and consulting plans for the coming year.
Sincerely,
Sharon Armstrong
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