11/03/2009 - 22:00

Downturn a test for principles

11/03/2009 - 22:00


Save articles for future reference.

Long-term business strategies could become casualties of the downturn.

Downturn a test for principles

DURING the long-running economic boom, many businesses professed their unwavering commitment to principles and practices that may have been costly in the short-term but were seen as key to long-term success.

This included practices like maintaining staff training and development through the ups and downs of economic cycles and principles like sustainable development, responsible environmental management and genuine community engagement.

These are the sort of things that collectively define being a "good corporate citizen".

Six months into the economic downturn, there is evidence that some businesses are shunning long-term strategies in favour of short-term fixes.

New data on apprenticeships is a prime example. Education department data shows that a record number of Western Australian apprentices have had their training suspended.

Group training providers like Electrical Group Training have been forced to stand down probationary apprentices for the first time in their history. This is disappointing after the debate over the skilled labour shortages that emerged in recent years.

It was universally accepted during the boom years that economic growth was constrained by the limited supply of skilled workers.

There were multiple reasons for this shortage, including the ageing of the workforce, the focus on university education over trades, the privatisation of government utilities that traditionally were among the biggest employers of apprentices and the pressure on manufacturing industries.

Added to that was the failure, or inability, of many businesses to maintain their commitment to training during the 1980s and early 1990s.

In light of this experience, it was accepted wisdom that business and government would need to maintain their support for staff training and development through thick and thin.

Every commentator and industry group agrees that Australia's eventual recovery from the current downturn - whenever it occurs - will be hindered if the commitment to training wanes.

The problem is that businesses are focused on their immediate financial prospects rather than the economic recovery that will occur at some indeterminate time in the future.

It makes good sense for individual employers to minimise their operating costs in the current commercial environment and in practice that may mean not taking on new apprentices or trainees. Ironically, the fall in trainee and apprentice numbers could give added impetus to efforts to reform trades training.

Governments in recent years have implemented substantial reforms designed to make trades training more flexible and efficient, and are working on further changes to create more alignment across Australia.

The business sector's commitment to trades training during the current downturn is not an isolated issue.

Similar questions arise over the business sector's commitment to sustainability, corporate philanthropy and environmental management.

We were often told, particularly at the big end of town, that there had been a fundamental shift in thinking in recent years; that the corporate sector did not simply pay lip service to these concepts but genuinely embraced them and integrated them into their business practices.

The investment that big resources companies have made in indigenous training and employment programs and community development activities, particularly in the Pilbara, seemed to support this rhetoric.

To what extent will this be maintained, particularly if resources companies conclude they don't need indigenous workers to meet their growth targets?

Similarly, it will be interesting to see how many employers maintain the flexible employment practices they boasted about when the labour market was extremely tight.

Law firms, for instance, talked about how they had changed because they were happy to accommodate staff, and even partners, working from home, often with flexible hours.

And what about businesses that employed older workers, often on a part-time basis? We were often told that older, part-time workers still had a valuable contribution to make. Former prime minister John Howard famously exhorted businesses to employ older workers who could transition out of the workforce instead of going straight from hectic, full-time work to sedentary retirement.

Did these firms genuinely embrace a more flexible approach to running their business, in a manner that accommodated staff who could not or chose not to work traditional hours? Or was it just a convenient line to spin while they had no choice, and they will now revert to their traditional practices?


Subscription Options