Organizations are shifting priorities away from talent to immediate needs such as reducing risk and cost. While keeping an eye on the short term, learning leaders need to find long-term opportunities to leverage development.
by Mike Prokopeak
March 12, 2009
Given the economic downturn and record number of layoffs occurring during the past few months, it’s not surprising that organizations are shifting their priorities away from organizational talent to more immediate needs such as reducing risk and cost. While keeping an eye on the short term, it’s important for learning leaders to find long-term opportunities to leverage development to navigate the current downturn.
Last month, Personnel Decisions International (PDI), a global leadership consulting firm, released the findings from its annual “Pulse on Leaders” survey. Conducted from December 2008 to January 2009, the study asked leaders from 500 global organizations to rank their top business challenges. Respondents were primarily directors and executives (50 percent), but also included managers (25 percent). The remaining respondents were either individual employees or did not indicate their roles.
According to the findings, financial pressure to cut costs is the No. 1 business challenge (83 percent), followed by rapid market decline (54 percent). Given the global economic downturn, neither result is a great surprise.
What was more revealing was the dramatic drop in talent priorities when compared to prior years. From 2006 to 2008, study respondents indicated that “loss of leaders in key areas or insufficient talent to quickly adapt to change” was either the first or second top challenge. In 2009, that challenge dropped to dead last, only making it onto 5 percent of respondents’ lists.
“It reflects a shock to our collective psyche,” said Marc Sokol, senior vice president and global practice leader for PDI. Survey findings indicated the heightened focus on the national and global economies and reflected the rash of bad news at the end of 2008, including a dramatic drop in retail spending, massive layoffs, mounting corporate bankruptcies and general uncertainty about direction for 2009, he added.
“One implication is that people don’t think of this as a cycle, but as enduring reality — so they get more and more short-term focused,” he said. “Immediate-term focus is essential, but so is clear-headed thinking about the future and the signals of when to take action.”
The dramatic drop in talent-related priorities forces learning professionals to refocus and take new directions, Sokol said. “It’s an opportunity to get people to think about their core strategies as a business and what they can do that creates leverage, not just meets expectations,” he said.
Findings from Chief Learning Officer’s recently released “2009 Business Intelligence Industry Report” reflect a similar finding. Now in its fifth year, the report collected responses from 1,523 learning leaders from a wide cross section of job titles and organizational sizes on topics ranging from staffing to learning investment and delivery methods.
Compared to prior years’ findings, a much smaller percent of organizations believe their learning budgets will increase in 2009 (41 percent, compared to 61 percent in 2008 and 58 percent in 2007). But while budgets will be tighter, respondents indicated learning and development will be more aligned to company business objectives (95 percent) and the perceived value of learning within the company will be higher (84 percent).
In looking at the learning organization’s role in implementing a response to the economic situation, C-level executives represented the group with the largest percent of individuals who believe learning and development will play a significant role (83 percent). Fifty-nine percent of chief learning officers and just 27 percent of HR leaders believe L&D will play a significant role. That gap indicates an opportunity for learning and development practitioners to seize upon the widespread change happening in organizations and help lead enterprise-wide efforts to navigate the economic downturn.
“As organizations deal with cost cutting, they are also re-evaluating business strategies and are restructuring to meet today’s demands,” Sokol said. “It is critical these organizations also understand the talent and leadership requirements to put these new processes and structures in place. Developing and retaining top-performing employees is an essential piece and should not be overlooked.”