The UK economy shrunk by 0.5% in the third quarter of 2008, moving us all ever closer to a full-on recession. That won't be news for small business owners who always feel the impact of any downturn well before large businesses. But while business may be slower than usual, a downturn is often an ideal time to tighten your company strategy, sort out what skills you have and address any gaps you may have too.

Many small businesses will not be in any position to plug gaps by recruiting new staff so a more cost-effective route could be improving the skills of existing workers. Indeed, according to business development guru Brian Tracy, if your business has been affected by the slowdown, it may partly be attributed to skills gaps within your team. "Tougher economic times often mean you're in a better position to identify skills gaps and address them with appropriate training and development," he says. Investing in training can also go some way to making up for a lack of pay rises and help to keep staff morale up at a difficult time.

One of the most exposed industries to the UK downturn is the construction sector; a fact not lost on Mark Farrar, chief executive of ConstructionSkills, the Sector Skills Council for the industry. He says far-sighted businesses should ramp up skill levels in the current environment: his own industry needs to recruit around 42,000 skilled workers every year by 2013 to satisfy demand for new projects. "That's a very substantial number," he says. "We advise small-to-medium sized businesses to continue training employees, putting them in a stronger, more competitive position to win and retain contracts during challenging economic times."

‘Training in the UK is almost the last bastion of paternalism. It's often a very central model. The notion of people driving their own development but supported by the organisation is much more novel'
Marytn Price, managing director of Carpentry Management Contracting, a small firm employing 50 people in Biggleswade in Bedfordshire, knows all about challenging economic times having set up his business in the last serious downturn. "We started the business at a time when the market was tough, but we were successful because we offered clients more value for money," he recalls. "Staff training was the cornerstone of this, because we gave our employees better knowledge and superior practical skills with formal qualifications to back it up." Price says this approach has recently contributed to prospective business opportunities trebling, from £1m to £3m.

Shifting demand
Training skills providers themselves are noting distinct differences in product demand. John Osborne, product training manager at global training provider BSI Learning, says he's noticed a trend towards both environmental-related programmes and quality management standards from smaller companies. "Keeping the customer satisfied is particularly important in the current environment which explains why these products are popular," he says.

"Another training area we're seeing more demand for is process improvement and problem-solving," he adds. "When times are tight, many businesses need to know that they're operating effectively and perhaps be able to find new ways of reducing costs." Osborne adds that an increase in distance-learning products and online web training programmes is also evident. "Quite a lot of training is done by people in their own time. But the majority of our business is instructor-led training dotted around the country."

Martyn Sloman is training, learning and development adviser at the Chartered Institute of Personnel Development. He believes two of the biggest training growth areas in the UK economy are technology and communication skills. But how these are absorbed is changing, he says. "Three-quarters of the UK population now use IT at work and 50% of people consider a PC as essential to their job," he says.

"The other skill is softer communication skills. There's an argument that both these skills are learned rather than taught. For example, ask yourself how you learned to use Microsoft Word. You may remember some course you went on to learn more about it. But it's equally likely that you also learned a great deal by trial and error and asking others. So creating an environment where people support each other is the predominant training story of our time."

That method of learning also puts demands on line managers to take more responsibility for staff training, of course. But they are likely to be busy people and staff may sometimes need to use their own initiative, says Dr. Grant Crow from Stepstone, a skills programme software provider. "Training in the UK is almost the last bastion of paternalism. It's often a very central model. The notion of people driving their own development but supported by the organisation is much more novel. It's also increasingly difficult to get 10 or more people from the same department together at the same time."

‘Ask yourself how you learned to use Microsoft Word. You may remember some course you went on to learn more about it. But it's equally likely that you also learned a great deal by trial and error and asking others'
Crow believes a lot of training can be given on the job; often it's about staff being given the chance to be put on projects to develop their own skills and confidence. "People need to be equipped to get to the necessary levels of self-insight and unless you're being shown that on the job progress can be difficult."

Within budget
Securing cost-effective training for staff is obviously going to be a priority just now. Many colleges offer courses at a fraction of the cost of private companies (see case study), while the government's Learning and Skills Council (LSC) can help you find what training government-backed resources are available. LSC support is not just about young people; there's no age limit on training.

Another possible solution is to use Train to Gain, a government-sponsored skills broker that will visit your business, examine how it runs and recommend training solutions in a range of areas. Train to Gain draws from all the LSC's programmes, including apprenticeships and the National Skills Academy Network, while skills brokers also take care of sourcing training providers. They may even secure on-site, out-of-hours training so the business can carry on as usual and alert businesses to training and funding opportunities. Apprentice training is also fully funded by the Learning and Skills Council if apprentices are aged 16-19; 50% of training is paid for apprentices aged 19 and over.

Those who still aren't fully convinced about the merits of continuing to train staff during a downturn would do well to consider the results of a study by the leadership development organisation Common Purpose. The research found that almost half of training and development professionals were expecting a budget cut of 20% or more, with softer skills such as teambuilding hardest hit and technical skills and leadership development less affected.

But the same poll also found that over half of respondents were worried about holding onto key staff. "Many organisations cut learning and development budgets in a misinformed attempt to see them through the tough times," says Julia Middleton, chief executive of Common Purpose. "This is understandable, yet these are the very people who will be looked on to help the organisation pull through, spot the growth opportunities and accelerate out of an economic downturn."