Will Recession Affect E-learning?

As if IT, HR and training/education budgets weren’t already tight enough, the business world is experiencing a downturn that could become a full-fledged recession. Elliott Masie, director of the Masie Center, thinks this economic impact will be felt in the e-learning sector.

“This is a serious and actually quite depressing topic for learning executives,” states Masie. “In a recession, organizations often make rapid and sometimes stupid decisions to slice any function that is not seen as directly linked to the revenue side of the equation.

“In addition, investments in learning systems and infrastructure can already be seen as getting tougher.”

He points out two known companies that were ready to sign contracts for new LMS’s a couple of months ago. They were then told to hold off, because executives didn’t want to commit to more spending when the future of the economy is uncertain. Another CLO, Masie relates, was told to shrink her staff by 40 percent in the next three months, in order to be seen as tightening the budget.

“Yet, the need to retain great talent and to have the speed and agility to respond to changing market conditions is often clearly linked to the learning capacity and function within the organization,” Masie concludes.

As if IT, HR and training/education budgets weren’t already tight enough, the business world is experiencing a downturn that could become a full-fledged recession. Elliott Masie, director of the Masie Center, thinks this economic impact will be felt in the e-learning sector.

“This is a serious and actually quite depressing topic for learning executives,” states Masie. “In a recession, organizations often make rapid and sometimes stupid decisions to slice any function that is not seen as directly linked to the revenue side of the equation.

“In addition, investments in learning systems and infrastructure can already be seen as getting tougher.”

He points out two known companies that were ready to sign contracts for new LMS’s a couple of months ago. They were then told to hold off, because executives didn’t want to commit to more spending when the future of the economy is uncertain. Another CLO, Masie relates, was told to shrink her staff by 40 percent in the next three months, in order to be seen as tightening the budget.

“Yet, the need to retain great talent and to have the speed and agility to respond to changing market conditions is often clearly linked to the learning capacity and function within the organization,” Masie concludes.

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