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Cath Everett

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Training budgets continue to be squeezed

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The trend towards shifting increasing amounts of training provision in-house to cope with budget cuts seems unlikely to change over the year ahead, with two out of five organisations anticipating further squeezes.
 

According to a survey among 600 private and public sector organisations undertaken by the Chartered Institute of Personnel and Development, some 43% saw their funding for learning and development drop last year, while some 42% anticipated seeing further cuts over the next 12 months. Only one in 10 believed their training pot would rise.
 
The fact that just over half of respondents saw the general economic health of their employer decline during 2010 led about a third to reduce their reliance on external providers and go for cheaper options such as e-learning (54%), coaching by line managers (47%), in-house development programmes (45%) and internal knowledge-sharing events (37%) instead.
 
John McGurk, the CIPD’s learning and talent development adviser, said: “It’s encouraging to see that during the tough times, organisations have coped well with reduced budgets and shifted from external to in-house provision as well as utilising less costly development practices. This has proved that the function is adept to new innovations as well as cost control when the going gets tough.”
 
As a result of the shift, respondents expected to increase the median amount of training offered to each employee to five days, which is equivalent to 2009 levels, compared with only four days last year.
 
In terms of trends within both the public and private sector respectively, just over three quarters of bodies in the former category anticipated that the money available for learning and development would fall compared with only 26% in the latter category. The situation is a reverse of last year, when some 19% of public authorities and more than half of private sector firms had expected cuts.
 
As a result of tight budget squeezes, public sector organisations were twice as likely as their private sector counterparts to anticipate reductions in attendance at external conferences, workshops and events (50% versus 28%), formal education courses (49% versus 24%) and instructor-led training delivered off the job (38% versus 21%).
 
“Although many firms are still struggling in the private sector and some are still reining in spending on training, the picture has picked up from last year. Not only have we seen learning and development being prioritised more in the recent recession than in previous ones, we’re also seeing a strong bounce-back from firms recognising that investing in skills is the best way of capitalising on recovery,” McGurk said.
 

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