Cutting training spending 'a false economy'

Businesses must not cut spending on training as the recession bites, the North's Employment Commissioner said today.

Companies which do not boost staff skills are twice as likely to fail as those which do, Bill McGinnis added.

The Confederation of British Industry (CBI) and Northern Ireland Chamber of Commerce joined him in an open letter to local companies on the issue.

"In an economic downturn, there is always a temptation for businesses - large and small - to cut spending on staff training. When times are tough, it looks a simple way to cut costs," the letter said.

"But it's a false economy. It is the people we employ who will get us through. When markets are shrinking and order books falling, it is their commitment, productivity and ability to add value that will keep us competitive."

Research in 2007 confirmed that firms which did not train were 2.5 times more likely to fail than those which did, the note added.

The Institute of Directors (IoD) and trade unionists also endorsed the plea.

"Investment in skills will support the development of new products and services that will determine whether Northern Ireland is ready to succeed when growth returns," it added.

"From our experience in previous downturns, it was the businesses that did invest in their staff which saw the most dynamic recovery."

Mr McGinnis, chairman of modular building manufacturer the McAvoy Group, from Dungannon, Co Tyrone, was appointed Northern Ireland adviser on employment and skills last year and represents the region on the UK Commission for Employment and Skills.

The open letter is part of a UK campaign to promote training launched by the Commission.

Mr McGinnis added: "The skills of our people are Northern Ireland's best guarantee of future prosperity. I believe that investing in people is the best investment in these particularly challenging times.

"We must not pay the price of failing to invest in the talent on which our future growth will be built."