Investment in Training and Development in Times of Uncertainty

Sheehan, Maura

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 no t 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.

Citation

Sheehan, M. (2014). Investment in Training and Development in Times of Uncertainty. Advances in developing human resources, 16(1), 13-33. https://doi.org/10.1177/1523422313508924

• Journal Article Type: Article
• Acceptance Date: Jun 1, 2013
• Online Publication Date: Jan 6, 2014
• Publication Date: 2014-02
• Deposit Date: Jan 20, 2020
• Journal: Advances in Developing Human Resources
• Print ISSN: 1523-4223
• Electronic ISSN: 1552-3055
• Publisher: SAGE Publications
• Peer Reviewed: Peer Reviewed
• Volume: 16
• Issue: 1
• Pages: 13-33
• DOI: https://doi.org/10.1177/1523422313508924
• Keywords: training and development, uncertainty, general and specific T&D, dynamic analysis
• Public URL: http://researchrepository.napier.ac.uk/Output/2478310