Advantages and Disadvantages of Cutting Training Budgets in an Organization

Regardless of the school of thought one adheres to, most HR professionals agree that training and development at the workplace is a complex human resource practice that has the potential to influence the levels of success of an organization or lack thereof. Despite the various benefits, training has on employee performance and overall organizational goals, most companies are increasingly finding it hard to maintain training practices especially during a recession or declining sales. Firms that are faced with declining sales are forced to look for areas to cut expenditures as a way of protecting themselves against further loss of profits, and the risk of going out of business. In such cases, managers forces to identify areas of overhead to cut their spending on first, which usually sees the budgets of training and development either cut down or eliminated (Paradise and Mosley, 2000). The managers of such firms are forced to balance budgets through the elimination of performance development programs and training practices that are considered unnecessary or add no major value to the profitability of the company (Milton-Eversole, 2010). Although this may seem like a short-term strategy or a reactionary one, it is often the case that the Training and Development function is the first in line to experience budget cuts when the management embarks on cost-cutting (Coleman, 2009. Phillips, 2009).
It is important for any organization to have a good understanding of the specific training needs of its workforce in order to adequately address the inefficiencies of the past and meet present and future demands. The skills to be developed in the training program should, therefore, be tailored according to the skills required by different employees in the organization.&nbsp.