Tightening belts whilst still sharpening skills
The Mind the Skills Gap 2025 research survey has revealed that 79% of SME employers have identified skills gaps in their organisation in the past 12 months. Larger SME’s (100 to 249 employees) are more likely to report these gaps (85%) The research published jointly by the Chartered Institute of Management Accountants (CIMA) and research agency Opinium found that fewer than one in three SME employees have undergone training in the past year, yet 82% express a desire to upskill.
According to the survey results, lack of budget (41%) and lack of time (39%) are the primary barriers that prevent employer investment into training and development. (Source: HR Magazine)
The research found that many SME’s are turning to outsourced training consultants to support with training and development of their teams. (Something which quite naturally I wholeheartedly agree with!!)
However, as the financial year draws to a close, and budgets are finalised for the new year, organisations are often faced with a critical question: how do we continue to invest in our team’s development without breaking the bank? Training, often perceived as a luxury, can easily be sidelined when budgets are tight. However, neglecting employee development can have far-reaching consequences, impacting not just individual performance but the entire organisation’s health.
According to the survey results, lack of budget (41%) and lack of time (39%) are the primary barriers preventing employer investment intro training and development.
However, there are practical and affordable strategies that organisations can adopt to ensure their teams and managers remain skilled and motivated, even when faced with financial constraints.
The cost of inaction – Real world examples
Imagine a small hotel, still struggling with occupancy levels after the pandemic, aiming to cut costs, it has failed to replace the trainer when they left. New and existing team members no longer receive training in effective communication skills, problem solving and handling complaints.
The consequences?
Increased guest complaints
- The team are unable to handle guest enquiries or complaints effectively, leading to frustration and dissatisfaction.
- Simple issues escalate into major problems due to poor communication and lack of problem-solving skills.
Negative online reviews
- Unhappy guests leave scathing reviews on online platforms, damaging the hotel’s reputation and deterring potential customers.
- The hotel’s online rating plummets, affecting its booking rates.
Decreased guest loyalty
- Guests who experience poor service are unlikely to return, resulting in a loss of repeat business.
- The hotel struggles to maintain a loyal customer base, leading to revenue decline.
Team morale issues
- The team feel overwhelmed and stressed due to their inability to handle difficult situations.
- They experience increased frustration from dealing with unhappy guests, leading to low morale and higher staff turnover.
Within manufacturing, operatives are often promoted to supervisors, having displayed loyalty to the company and a knack for their job. Fast forward months or even years and they have never been given any supervisory or management training. They are not communicating effectively with their team, not resolving conflicts as they occur or managing performance.
The consequences?
Increased production errors
- Supervisors struggle to give clear instructions, leading to misunderstandings and errors on the production line.
- They fail to properly delegate tasks, causing bottlenecks and delays.
Decreased employee morale
- Supervisors are inconsistent in their treatment of employees, leading to feelings of unfairness and resentment.
- They avoid difficult conversations, allowing minor conflicts to escalate into major disputes.
- A lack of constructive feedback leaves employees feeling undervalued.
Higher turnover
- Frustrated employees seek employment elsewhere, resulting in increased turnover and recruitment costs.
- The plant struggles to retain its most skilled workers.
Safety issues
- Poor communication can lead to a lack of enforcement of safety procedures.
In a retail setting, the owners decided when they set their budgets last year that they could save costs by not training the team. Being a sector renowned for its higher employee turnover, several key members of the team left and were replaced.
The consequences?
Missed sales opportunities
- Employees struggled to understand customer needs, resulting in recommending inappropriate products or services.
- They lacked the ability to effectively explain product features and benefits, leading to customer confusion and hesitation.
- They were unable to close sales, and potential customers left the shop without purchasing anything.
Decreased customer satisfaction
- Customers felt unheard and misunderstood due to poor listening skills from the team.
- The did not return due to negative experiences.
- They told their friends and family and word-of-mouth spreads, which damaged the shops reputation.
Lower average transaction value
- Employees failed to upsell or cross-sell, which resulted in lower average transaction values.
- They did not recognise opportunities to add on warranties, or accessories.
Reduced employee confidence
- Employees felt ill-equipped to handle customer interactions.
- They now lack confidence, and feel overwhelmed.
- Many of them lasted less than 6 months before leaving.
These are not hypothetical scenarios; they are the everyday realities faced by organisations that fail to prioritise training.
The consequences extend beyond immediate operational issues. In a rapidly changing market, a stagnant workforce quickly becomes obsolete. Without continuous learning, employees may feel undervalued and disengaged, leading to higher turnover rates. Replacing experienced staff is costly and time-consuming, further straining already limited resources. Moreover, a lack of management training can result in poor leadership, ineffective communication, and a toxic work environment. This can lead to decreased productivity, increased conflict, and a general sense of unease within the team. Ultimately, neglecting training creates a ripple effect, impacting everything from operational efficiency to employee morale and the overall financial health of the business. As organisation’s begin to solidify their budgets, it is crucial to recognise that training is not an expense, but an investment in the organisation’s future.
As if this wasn’t reason enough, four generations in the workforce is a challenge. From different communication preferences to varying work ethics and expectations to technological differences to conflict values and perspectives to stereotypes and biases, today’s workplace is a complex place to be. Communication and understanding is more important than ever. A lack of focus in this area is damaging to the success of any business.
Creative and Cost-Effective Training Strategies
Recognising the need for training is only the first step. The challenge lies in implementing effective programmes within a limited budget. Fortunately, there are numerous affordable strategies to explore. One of the most effective is leveraging internal expertise. Identify employees with specialised skills or knowledge and empower them to become internal trainers. This not only reduces the cost of an inhouse trainer but also fosters a culture of knowledge sharing and collaboration. For example, a senior software developer could conduct workshops for junior team members, or a seasoned sales representative could share best practices with new recruits.
Another cost-effective approach is to utilise online resources. Numerous free or low-cost online courses, webinars, and tutorials are available on platforms like Coursera, Udemy, and LinkedIn Learning. These resources offer flexibility, allowing employees to learn at their own pace and convenience. Organisations can also explore industry-specific resources and professional associations that often provide training materials and workshops at discounted rates for members. Blending online and in-person learning, known as blended learning, can be particularly effective. For instance, employees can complete online modules at their own pace and then participate in in-person workshops or discussions to reinforce their learning.
Consider implementing a mentorship program, pairing experienced employees with junior colleagues. This provides valuable on-the-job training and fosters a supportive learning environment. Mentorship programmes can also enhance employee engagement and retention.
Cross-training, job shadowing or job rotation is another valuable strategy, allowing employees to learn new skills and perform different roles within the organisation. This not only increases flexibility and adaptability but also reduces the need for specialised training in certain areas. For example, a marketing team member could learn basic design skills, or a customer service representative could gain experience in social media management.
Building a Culture of Continuous Learning: Fostering Sustainable Development
Beyond specific training programmes, organisations can cultivate a culture of continuous learning by encouraging employees to take ownership of their development. This can be achieved by providing access to relevant articles, books, and industry publications.
Encourage employees to attend conferences and workshops, even if it’s just one or two individuals per year, who can then share their learnings with the team. Create a learning library stocked with relevant resources, and promote informal learning opportunities, such as lunch-and-learn sessions or peer-to-peer discussions.
Performance reviews are another opportunity to identify training needs and develop personalised learning plans. Encourage employees to set learning goals and provide feedback on their progress. Recognise and reward employees who demonstrate a commitment to continuous learning, whether through formal training or informal self-development. Small incentives, such as gift cards or extra time off, can go a long way in motivating employees.
Finally, it is essential to measure the effectiveness of training initiatives. Track key metrics, such as employee performance, customer satisfaction, and productivity, to assess the impact of training on business outcomes. Gather feedback from employees to identify areas for improvement and ensure that training programmes are aligned with their needs and the organisation’s goals. By adopting a data-driven approach, organisations can ensure that their training investments are yielding tangible results.
When in the midst of budget planning, leaders must recognise that training is not a luxury, but a necessity for long-term success. By embracing creative and cost-effective strategies, and fostering a culture of continuous learning, organisations can empower their teams to thrive, even in challenging economic times. Investing in employee development is an investment in the organisation’s future, ensuring that it remains competitive, adaptable, and resilient in the face of change.
It’s an oldie but a goodie, but so very true…
The only thing worse that training your employees and having them leave, is not training them and having them stay (Henry Ford)
