Learn while you earn

Bob Fisher, CEO of Grow Federal Credit Union in Tampa, Fla., believes strongly in the value of employee training and education. He maintains a training department that offers four or five programs daily, ranging from classes in public speaking to instruction in coaching and mentoring. He also sends executives to a writing seminar at the University of South Florida.

"We spend a lot of money in that area," Mr. Fisher says, referring to his commitment to training. "So far it's worth the money spent. We owe it to our employees to make sure they have all the tools necessary to do their job."

Not all executives share that attitude these days. As businesses trim spending in a slow economy, some regard training and continuing education as easy targets.

"During recessions, many companies view employee training as the big E – expense," says Steven Feinberg, an executive coach in Palo Alto, Calif. "They think, Cut it, don't spend. They don't see it as an investment."

But not all trends are negative. A February survey by the consulting firm Mercer finds that although 9 percent of companies have cut back training and development programs, 14 percent have increased them.

Those who do value these benefits are finding creative ways to maintain programs at a lower cost. To remain true to its mission and values, a marketing agency called Creating Results in Barrington, R.I., has started an internal "university" with monthly classes, guest lecturers, a library, and homework.

Some firms cut expenses by holding training sessions on-site or online instead of at a resort.

"Where in the past we might have brought 100 people together for a conference, now we ask, can we achieve the same outcome in a more cost-effective way?" says Tom Starr, a principal at Booz & Company, management consultants in New York. "Typically we would have had a two-day meeting. Now it's one day. Managers might ask, Can we do three two-hour sessions via the Web rather than one eight-hour day?"

Increasingly popular "webinars" enable managers to reach employees thousands of miles apart.

For some purposes, e-training is effective, says Al Switzler, cofounder of VitalSmarts, a corporate training company in Provo, Utah. "If you want to learn PowerPoint skills, you can do that online. But in teaching interpersonal skills – being good team members, cooperating, holding other people accountable – it hasn't proved very effective."

Mr. Starr finds another limitation. "You sacrifice the opportunity for people to get together," he says. After group sessions, when he asks participants what they liked best about the training, they often answer, "the opportunity to get together with my peers and talk to people I never get to see face to face anymore." He adds, "There's a pent-up hunger on the part of employees to engage more often than they do today as we work virtually."

When e-learning falls short, schools sometimes fill that void. When Robert Forsythe, dean of the College of Business at the University of South Florida in Tampa, talks with executives who hire new employees, one of the first issues they raise is the need to improve writing skills in an age of e-mail and text messaging. This includes both recent graduates and those hired 15 or 20 years ago who have hit a ceiling because of poor communication skills.

To meet that need, Dean Forsythe created a two-day writing workshop at the university for mid- and senior-level executives. The $400 course, limited to 25 participants, is always filled, and companies ask about bringing the program to their offices.

"My prior experience has been that when the economy heads south, executive education dollars dry up," says Forsythe. "But with highly tailored programs such as these, we're seeing good demand from the business community."

In a recent study by the Institute for Corporate Productivity, 81 percent of organizations say they provide tuition assistance programs for employees. Tuition reimbursement represents a $20 billion industry. Nearly a third of businesses in the survey require employees to repay tuition if they leave the company within a year of completing a course. Some managers express concern that workers will take advantage of continuing education programs, then quit.

Quitting is not on the mind of Michael Zorn, assistant plant coordinator at Johnsonville Sausage in Sheboygan Falls, Wis. Continuing education, reimbursed by the company, has expanded his horizons and skills. One night a week for three years, he attended on-site classes given by a local technical college. In 2003 he received an associate's degree in supervisory management. Next May he expects to earn a bachelor's degree in business management.

"It helps you grow both personally and professionally," says Mr. Zorn, a 26-year employee. "It's made me improve my people skills, business knowledge, thinking and listening skills. I feel it's made me a better overall person. If it hadn't been for Johnsonville's vision on continuous learning, I don't think I would have pursued any of this."

In addition to enhancing workers' credentials, some training focuses on developing the whole person, says John McTigue, a managing partner of Northwestern Mutual Financial Network in Chicago. That includes instruction in everything from working with staff, superiors, and clients to getting involved in the community. "When a person feels more educated, they're happier, more confident, and able to show themselves better in the community," he says.

Whatever its form, workplace development remains critical for retention, says Alexandra Levit, author of "Success for Hire." "If you are cutting training now, you're going to have employees leaving. You get a reputation for being a company that doesn't support employees."