Training cuts spell future problems

With outsourcing and cuts as high as 25%, who's training Canada's next generation of marketers?

Training cutbacks in the marketing world could lead to major problems in the future, according to industry experts.

With the downturn in the economy, pundits believe that some companies have cut their training budgets by as much as 25% – a situation they claim could present difficulties when senior staff retire and their younger counterparts are not able to step into their shoes.

‘Training is typically the first thing to be cut [when the economy is poor] because you don’t see an impact right away,’ says Karl Moore, professor of marketing strategy at the faculty of management, McGill University in Montreal. ‘However we will start to see an impact in the medium to long term.’

Moore estimates that cutbacks in some companies may have been as high as 15% to 25% in the last two years. ‘The problems arise when you get younger people who are not being prepared for more senior positions.’

Like many companies, Cadbury Canada has been affected by training cutbacks, according to the company’s former SVP of marketing, John Bradley. ‘There was a time when it was common for hundreds of thousands of dollars to be spent on training an individual, and you just don’t see that kind of investment any more,’ he says.

Bradley, who now runs an Oakville, Ont.-based consultancy called Yknot Solutions, believes that the problem has been insidious across the industry for a long time, partly because of the rapid staff turnovers that many companies face today. ‘A lot of companies take the approach that it’s not worth spending money on training people because they are going to leave anyway.’

Another trend has seen companies outsource their training programs more frequently. Ken Wong, marketing professor at Queen’s University School of Business in Kingston, Ont., believes that this is an issue, because on-the-job training programs are superior. There is no better way of learning than at the feet of the masters, so this is bound to have a detrimental effect,’ he says.

Toronto-based Maple Leaf Foods is one company where a lot of non-core training is outsourced. But VP of leadership Bob Hedley says the programs, provided by various companies, including Niagara-on-the-lake, Ont.-based The Niagara Institute and Escondido, Calif.-based Ken Blanchard Companies, are still exclusive to the company, so the long-term development and succession plans are not adversely affected.

And while Hedley admits that Maple Leaf has experienced substantial cutbacks to its corporate training budgets, he says the firm is reallocating resources to maintain quality.

‘Because training is on-the-job and it’s part of the flow of the job, the money isn’t necessarily coming from the training budget,’ he says. ‘We are actually doing a lot more training than ever before, even though the budget has been cut.’

Meanwhile, some companies have been getting around the need for training altogether by simply hiring more experienced staff at the outset. Says Ron Lund, president of the Association of Canadian Advertisers in Toronto: ‘Organizations are looking for people who have already achieved a certain level of understanding of brand positioning.’

Melinda Head, president of Toronto-based Head Research, agrees that many companies are showing a reluctance to hire inexperienced staff because of the high costs involved in training them.

‘You have to make a two- to three-year investment training somebody to get them really up to speed, and once they are fully trained they are often hard to retain, so many companies are reluctant to make that investment,’ she says.

Coca-Cola Canada, for example, has a policy of not recruiting entry-level brand marketers. ‘We recruit people who already have experience,’ says Kari Kerr, spokeswoman for the company’s Toronto office. ‘With our resources being limited, we have to hire people who can come straight in and manage the brands.’

But Head fears that the industry will suffer from a lack of freshness and spontaneity brought by younger, less experienced staff members.

‘I look at the businesses I’m exposed to and I see that the mean age is creeping up, and that’s a very scary thing for the industry,’ she says.

New Centennial course gives students experience up-front

Advertising agencies looking to save on training costs will have a new forum for recruiting experienced young graduates next year. An advertising account management program will be launching at Toronto’s Centennial College this fall, to give college and university grads a broad insight into account management prior to joining an agency.

Program co-ordinator Dean Cowell explains: ‘I worked in agencies for 18 years and often interviewed people with good degrees and a keen interest in advertising, but no real knowledge of the industry, and we couldn’t always justify training those people.’

With this new program, Cowell says, graduates will be able to start work with a sound knowledge already under their belts – a major benefit to the agency world.

‘It’s a good way for someone to break into the industry from a different career,’ he adds.

While other post-grad courses take two or three years to complete, and often only result in starting salaries of around $25,000 to $28,000, the new course takes only one year to complete.

Around 40 students will be starting the course this fall. It involves producing integrated marketing plans, media selection, financial planning for agencies and campaign planning. Students will also benefit from a summer semester in an account management job placement with an agency. LS

Musical chairs

Loyalty Group staff try their hand at several positions

Some marketers and agencies are maximizing their training budgets by playing musical chairs. The Toronto-based Loyalty Group, for example, assigns marketing staff a stint in several divisions, in order to give them a holistic view of the company.

For example, an employee might spend time in the customer service, technology and production departments, working closely with experienced staff in each area.

‘It’s a cultural and philosophical approach to managing employee development,’ says Caroline Papadatos, VP of marketing at the Loyalty Group. Papadatos says that while training and development budgets have not changed, this approach enables the company to use those dollars more effectively. LS