Striking the best balance
By AIM Education & Training Executive Director Sales & Marketing, Matt Cavalier
By now we’re used to hearing that Australia is in transition. Economically, that is.
The Government has placed transitioning to a new economy at the heart of its agenda.
Exactly where we’re going and what lies ahead remains somewhat of a mystery but, like it or not, we are all on the move.
As explored at the most recent AIM Beyond the Boardroom in partnership with The Australian, nowhere is this transition more keenly observed and felt than in the mining, resources and energy industries, which underpin the Australian economy.
While these industries have experienced highs and lows before, the last few years have been particularly volatile.
From 2005 to 2013, Australian mining companies rode the wave of an unprecedented mining investment boom amid a global shortage of commodities. Between 2011 mining investment made up 8% of GDP. It is now just half that at 4.25% and expected to fall further to 1.25%.
Mining, resources and energy are not the only boom and bust sectors. Property development is another well-covered area. Tourism also waxes and wanes, largely dependent on what’s happening overseas and with currencies.
The big question for boards and managers is when do businesses that work within a boom and bust industry invest for the next cycle. When do they re-hire employees? When do they train those employees? When do they refresh capability in their existing teams?
The theory is the earlier you invest the better because then you and your company are prepared for the upturn – ideally ahead of the competition. Again, in theory, early investment also helps flatten out the boom and bust cycle. But early investment needs to be balanced with commercial realities – cashflow, the costs of gearing up and the uncertainty of when the next cycle will actually arrive.
These are all age-old business questions. Answering these involve a lot of complex financial modelling but, sadly, the decisions are never perfect ones.
Adapting and innovative approach to this challenge is critical. When it comes to training it might be using online rather than face-to-face (or vice versa), prioritising needs across the organisation or breaking the training up into smaller pieces.
When it comes to thinking through the investment through training, education and development here are a few pointers:
- Ask yourself, what exactly does your organisation want to achieve from the training? This will help you filter what you need and what you don’t – and where you can compromise.
- What would the business result be if you didn’t invest in the training?
- Most organisations will have what are sometimes called “compliance” and “discretionary” training. Compliance training such as health and safety is critical. But many employers can fall into the trap of thinking that all other training then becomes “optional”. It may be legally optional, but it’s not necessarily optional from a business point of view. Prioritise the “discretionary” training into “priority”, “within a set timeframe” and “don’t need to do”.
- Can you prioritise your training needs by business strategy, business need or team?
Are there more cost effective options, for example, using online training and education allowing employees to remain on-site rather than taking time away from the worksite? Can the training be spaced out over a period of time – with key components completed and then refresher courses as needed?