Investment in Training and Development in Times of Uncertainty. (February 2014)

• Record Type: Journal Article
• Authors: Sheehan, Maura
• Other Names: Sheehan Maura guest-editor.; McCarthy Alma guest-editor.
• Is Part Of: Advances in developing human resources. Volume 16:Number 1(2014)
• Page Start: 13
• Page End: 33
• Publication Date: 2014-02
• Subjects: training and development -- uncertainty -- general and specific T&D -- dynamic analysis; Personnel management -- Periodicals; Organizational effectiveness -- Periodicals; Human capital -- Periodicals; 658.30105
• DOI: 10.1177/1523422313508924
• Languages: English
• ISSNs: 1523-4223

Abstract

The Problem: While there is some consensus in the economics literature that there is a negative association between uncertainty and investment in capital, whether this relationship applies to investment in human capital—in particular training and development (T&D)—undertaken by firms is not clear. The evidence about what has happened to T&D investment in the aftermath of the global financial and economic crisis of 2008 is very inconclusive. This article examines how uncertainty has affected overall, general, and firm-specific T&D post-2008. The Solution: The analysis shows that T&D investment is highly sensitive to uncertainty, especially general T&D. Given the importance of T&D—especially general T&D for sustained competitive advantage—it is absolutely essential that investment is sustained, even in the presence of uncertainty. Viewing and treating T&D as an investment, rather than its current accountancy configuration, as an "expenditure, " can help to ensure T&D investment is maintained. Practitioners need to become more confident and competent in demonstrating that T&D is an investment, with the potential to generate significant returns for organizations, especially in relation to sustained competitive advantage. The Stakeholders: The article will be of particular relevance to human-resource development, T&D practitioners, and employees, all of whom have to compete for scarce resources.