Investing in training and retraining in an

economic downturn
By Dr. Hassan B. Ndahi
Senior Specialist, Skills and Employability
International Labour Organization
Subregional Office for the Caribbean
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It is no longer a question of when the financial crisis will hit the Caribbean countries, but
the impact it will have on their economies. Public and private enterprises by now have a
clear understanding of the impact of the crisis on their businesses. For most, it is
declining revenue or production. In particular, the effects of declining revenue trickles
down to a limited investment in education and training simply because some managers
cannot justify spending on human resource development at a time when revenue and
production are dwindling. Some enterprises may suspend investment on training, while
others may downsize their workforce as a strategy to restructure.

Since the Great Depression of the late 1920s, the world economy has experienced
recession about every decade or two and, typically, this was followed by steady growth,
driven mostly by the many ensuing innovations. This recession is likely to follow a
similar pattern. Business and industry leaders with foresight, understand that this is a
perfect time to invest even more in the training and retraining of workers to take on the
new challenges of the current financial crisis, and for improved productivity when the
economy recovers. Employers looking to emerge strong from the current economic
crisis, and better positioned to improve their competitiveness, must continue to invest in
education, training and development of their employees.

Employee training and development
Training is one of several possible solutions for solving employee and enterprise
problems caused by factors within and in some cases outside of an organization. Many
factors, not all clearly known, are responsible for the current economic crisis. However,
most of the discussions on how to get the economy back on track have centred on
infusing liquidity into the banking sector. The fact that all sectors of the economy are


affected by the crisis means that all enterprises will require workers who are skilled,
innovative and adaptable to help their company emerge from the crisis strong enough to
compete in the global market. Therefore, investing in education and training of human
resources should be a priority for every enterprise - public and private.

Visionary leaders understand that during times of economic difficulties, it is also the time
to protect and increase the companys investment in human resources, where it is
possible, so that when the upturn in the economy occurs, the company is better poised
to survive, grow and succeed with the right people in place. History shows that in the
first few months in an upturn, hiring quickly becomes a front-burner issue, so why not
save costs in hiring by investing in nurturing the skills and talent of employees?
Investing in employee training during a downturn has the added benefit of improving
staff loyalty, commitment and building high-performing teams.

As businesses and industries restructure, training provided to employees should be in
the emerging areas and ways of doing business, if they are to adjust to changing
realities. To downsize the workforce and hire new employees when the economy
-
rebounds is certainly not a cost-effective way of building a smart workforce to help a
company compete and innovate. Employees who are educated and flexible, and have
valuable insights into the business through their years of experience, will contribute
immensely to reducing the impact of the recession because they can take on new
challenges and adapt quickly to changing business strategies. There is no doubt that
when the current economic recession is over, business will not be the same as usual for
both private and public enterprises. Those that survive the recession will have to adjust
to new ways of operating. Visionary leaders will emerge from the recession strong, with
an educated and skilled workforce, because they would have invested in training during
tough times. They would have realized that education and training constitute a bridge to
entering and competing in new market conditions in the global economy.

Retraining of Employees
In a global recession of this magnitude, the worse case scenario for public and private
enterprises would be to downsize their workforce to cushion the effects of the
recession. Although not the best strategy for the way forward, it is inevitable for some
businesses and industries. When business leaders are forced to downsize, they retain
their most experienced workers and the less experienced or newly hired workers are
made redundant. But management should not just pay off and terminate employees.
Rather, as part of the termination package, the extra step should be taken to assist in
identifying their skills and talents with a view to providing alternative routes, including
retraining for occupations where employment is possible.




Talent and skills assessment of workers should be followed by career counselling,
career development and access to job fairs which may offer job opportunities and
different retraining options. The availability of up-to-date labour market information is
crucial to understanding the exact areas for which skills are needed, and where
retraining can be focused. Both public and private enterprises should encourage
education and retraining of their employees by facilitating access to technical and
vocational skills and entrepreneurial training, certification and the pursuit of associate,
undergraduate and graduate degrees as well as access to funds, grants, loans and
scholarships.

Employee self-assessment
Self-assessment is equally important for individuals who lose their jobs. They should
look inward to identify their skills, strengths, and weaknesses. Losing a job during an
economic downturn may not be the fault of the worker nonetheless, it is important for
individuals to assess whether or not their deficiencies made them quick targets. Self
assessment also serves as a motivating factor for pursuing new skills and knowledge.

Government as a key player
Governments have the primary responsibility, working with the social partners, to create
the enabling environment to link skills to productivity and employment by implementing
policies in areas essential to training and employment. This is a central plank of the
Decent Work Agenda, a sustainable development strategy which strives for closer
linkages between social progress and economic development with a focus on full and
productive employment and decent work.

Government must work in partnership with employers and workers organizations, civil
society and training institutions to design, fund, and implement education, training and
retraining programmes. Human resource development is central to innovation,
economic recovery, job creation and sustainable development; as such, it should not be
treated as a secondary issue.