A new survey by the Australian Industry Group has revealed that a third of companies are planning to cut their training budgets in the next 12 months, as entrepreneurs fight to hang onto staff ahead of a new skills crisis.
The survey, conducted in conjunction with Deloitte, shows overall business expenditure on training will fall by 4.1% in 2009-10.
But at an individual company level the cuts are much deeper – a third of companies are going to reduce training budgets, and 80% of these are planning to cut their budgets by 20% or more.
On top of this, 36.8% of companies employing apprentices expect to reduce the number of apprentices in training in 2009-10, with the uptake of new apprentices expected to fall by 10.6% over the same period.
However, companies are determined to hang onto their staff, with the total decline in employment from the 500 companies surveyed expected to be 3.8%.
Other strategies used to stave off job cuts include reducing non-labour costs (44.8%), reducing working hours (39.6%), freezing salaries and bonuses (35.4%) and bringing forward leave (32.2%).
AIG chief executive Heather Ridout says companies appear to have understood the lessons of past recessions and are doing all they can to hold on to staff.
“Training budgets have been trimmed rather than slashed and strategies have been employed across the board to retain staff, albeit with fewer hours.”
The primary reason for that is a looming skills crisis. Specific roles expected to be in shortage include technicians and trades workers (28.1% of companies), engineers (15.3% of companies), labourers and process workers (7.0%), managers (5.9%) and apprentices and trainees (5.9%).
David Brown, Deloitte Human Capital partner, says companies need to start working on strategies to hold onto and attract new staff in the New Year and as the economy improves.
“How organisations have been looking after their employees and continuing to invest in technical and leadership development will influence people’s decision to either stay or move on when opportunities present themselves.”
“As the demand for talent continues to escalate, those organisations that have focused on flexible work design and multi-skilling will also be better placed to take their share of the available talent.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
