Ok, so investments of any kind seem like a big risk during a recessive economy, at least that’s what common logic dictates. However, training is as an investment made to mitigate the effects of a recession.

Since training has the ability to prepare your workforce to manage the negative effects of a recession, it is one of those investments that actually fall in the category of risk-mitigating investments. And risk management or mitigating investments are the best investments to make in the face of turbulent times.

Although a recession can be unpredictable and difficult to manage, here are some steps that organizations can take by implementing training programs designed to cushion the impact of a recessing economy in the near future.

During the Covid-19 pandemic, we witnessed the effects of cutbacks in hiring. We also understood the impact that understaffed businesses had on their workforce and the problems of mass layoffs that affected both the exiting and the retained workforce.

Keeping this recent experience in mind, it’s ok to assume that a recessing economy may bring back this problem. Some organizations have already cut back on hiring like Tesla Motors which has asked senior officials to stop hiring across its global units and has indicated that it may cut staff by up to 10% in order to prepare for the ‘inevitable recession.’ Now, we may not be qualified to completely back or refute this decision, but what we can say is that this decision by Tesla puts additional stress on employees that are retained and on employees who may be asked to exit.

What we recommend is that any organization that is considering similar actions, must first put a training framework in place to prepare employees to take on additional roles. Simply put, upskill employees to do more than what they already can.

Upskilling employees allows your retained workforce to achieve equivalent productivity, if not more, during the event of a staff cutback. Upskilling also prepares your exiting employees with new skills, thereby increasing their chances of quickly landing a new job as they exit. Logically, it’s the first step that companies should take in order to ensure that every person associated with the company stands to gain something during such a crisis.

The next area to look into is reducing wastage. Whether it is manufacturing or the service-based industry, wastage is a common problem that plagues the bottom line of businesses.

Think about the inefficient manufacturing practices of production houses or the overspending habits of company executives whose bills are directly footed by the company. Wastage can take on many forms and factors.

If a manufacturing process is responsible for any kind of wastage, but it’s minuscule, the wastage is often overlooked. However, in a recessing economy, this is where they must reconsider. For example, food and fashion industries are very prone to product wastage. Unsold food items with limited shelf life are often incinerated by large manufacturers with little consideration because their business model compensates for the losses they incur. The fashion industry, especially the mid to premium brands, follows this same policy. In a normal economy, it may appear ok. But during a recession, such practices will only hurt the business even more.

It’s in such situations that training can help people understand the importance of assessing correct market requirements and reducing wastage as far as possible. Training can also be used to assist these people in better understanding the process of market analyses and how to correctly apply it.

On the other hand, overspending company executives running a business into the ground is more common than you may think here’s a link to a list of such companies. However, one does not even need to overspend in order to cause trouble during recessive times. Merely spending on unrequired things such as frequently traveling or hiring expensive accommodations or throwing lavish parties and even purchasing exorbitant company assets are more than enough to become the straw that broke the camel’s back even during a flourishing economic state.

It’s doubly important for companies to train their executives to understand the importance of spending wisely and saving on unrequired expenditures. In some cases, companies may automatically cut back on these perks during the event of a recession. In such cases, it’s important to inform your employees about the rationale behind the cutbacks.

As already determined, a recessing economy may force some companies to cut back on hiring new staff and even cut back on their existing workforce. In some cases, manufacturing could slow down resulting in delayed supply chains and leaving customers frustrated. Additionally, customer service may appear slow or even delayed due to the limited workforce maintained by service-based businesses.

We know this because the recent pandemic showed us some crucial areas where service may be hampered, and one of them was customer service.

Preparing customers by informing them about the cutback in services that results from cutbacks in the workforce is one way to reduce the growing customer resentment that companies may face during a recession. Another way is to actually train your customers to solve their own problems as much as possible till the economy returns to normalcy.

Even without the overhanging gloom of a recession in the picture, companies such as Meta (Facebook), LinkedIn, and Google have often relied on creating customer training modules directed at their customers with the mission to empower customer self-service.

Not only does it help these companies save on hiring budgets by avoiding large customer service teams, but it also lets their customers help themselves faster without having to wait for a resolution from the vendor’s side.

In simple terms, investing in training that informs customers about the delay in service and then empowering customers to solve their own needs is an excellent way to keep customers from resenting your business during tough times.