There are many paths a company may take to reduce expenses in the midst of an economic downturn. Among them is downsizing the workforce, cutting middle management and/or eliminating nonessential travel. These may look like good ideas on paper, but they’re likely to affect training and development budgets via slashed scheduled trainings, suspended current training, limited development opportunities (trade shows, conferences, etc.) or myriad other reasons.
As it has for generations, the Railway Educational Bureau (REB) stands ready with the training and employee development tools railroads need to maintain essential training for their essential employees. REB will be rolling out a new online series of training modules covering Federal Railroad Administration regulations as part of its initiative to provide railroaders the means to comply with 49 CFR Part 243 requirements. While REB will still be offering a wide array of its traditional correspondence courses and current onsite instructor-led training, these online learning modules will provide the industry with a refreshing and modern tool for training.
“Our RailTrainer Suite will offer online learning, instructor-led training and licensed training programs for added flexibility in meeting customer needs,” REB Director Brian Brundige notes. “The licensed training programs will give customers a complete training program they can deliver to employees using their own instructor.”
“Many organizations look to cut training and development first since they sometimes feel training is not directly tied to revenue,” Brundige says. “Training in our industry is in fact directly tied to revenue, because a railroad cannot function safely, efficiently and profitably without well-trained employees. Sadly, uninformed shareholders who aren’t interested in sustainability and growth, and who can’t look past the next quarter’s financial results, may be putting pressure on leadership to produce any profits they can during a rough spell. Training and development can be an easy target to cut. This is a mistake—a serious one, especially for a railroad, where training and safety go hand-in-hand. Any good, experienced railroader knows that safety is good business.”
A study by Association of Talent Development showed that “leading-edge” companies trained 86% of employees while “average” companies trained only 74%. Leading-edge companies also spent twice as much per employee on training. Companies that invest the most in workplace learning, the study showed, yielded higher net sales per employee, higher gross profits per employee and a higher ratio in market-to-book values.
When downsizing occurs, the employees who remain too often don’t get the necessary training to handle the additional tasks their former co-workers once handled. Plus, firms need to be careful when downsizing, as it can be counter-intuitive to add additional duties to the remaining staff without giving them the training they need to do their jobs efficiently, or safely. The long-term effect on employees can hurt morale.
However, the pain doesn’t have to be permanent. As Kris Mailepors, MBA,Author and Senior Manager Leadership Development Programs at Blue Cross NC, notes, “With cost reduction of any kind, a firm should compare the overall benefit of the cost reduction with the overall loss of what is being cut. In the case of downsizing, the loss of employees results in lost knowledge, experience and overall productivity.
“To balance this loss, a firm benefits in two ways: reduction of costs of salary and increased per-person productivity. The latter isn’t always a clear benefit. In theory, when a firm reduces a 10-person workforce by three, for example, the seven remaining workers are typically expected to maintain the original workload. This means that the smaller group must do the same, but the per-person output has increased; someone has to be taking up the slack.”
One study from the National Center on the Educational Quality of the Workforce found that a 10% increase in workforce training provided an 8.6% improvement in productivity, while the same increase in new equipment only provided a 3.6% improvement in productivity. This exemplifies that training is a valued investment.
As well, when employees see their company is continuing to invest in their career development, their pride and sense of worth may be amplified—plus the company will be better positioned for the future. This leads to a more productive and dedicated employee in the long run. There are many other benefits to continuing training efforts during a downturn.
“Now is a good time to evaluate any skills gaps your employees have and address them with training initiatives,” Brundige stresses. “The railroad industry has worked diligently and invested lots of time and money to become the safest transportation mode, bar none. It cannot afford to slack off in human capital investment. Turn to the REB. We can make a difference, and help railroads ensure that their employees are rebound-ready, because business will come back.”