Paul Krugman, recipient of the Nobel Prize in Economics and columnist for the New York Times, believes that three paradoxes are worrisome for our economy. He writes in his May 4 Op-Ed piece:
We’re suffering from the paradox of thrift: saving is a virtue, but when everyone tries to sharply increase saving at the same time, the effect is a depressed economy. We’re suffering from the paradox of deleveraging: reducing debt and cleaning up balance sheets is good, but when everyone tries to sell off assets and pay down debt at the same time, the result is a financial crisis… And soon we may be facing the paradox of wages: workers at any one company can help save their jobs by accepting lower wages, but when employers across the economy cut wages at the same time, the result is higher unemployment.
I think there is a fourth economic paradox: the paradox of employee learning. Recently, in the course of my work, I have talked to many training and development leaders in many organizations in many industries. The common refrain I hear is, “We have had to cut training positions; our budget for training and development is frozen; we’ve had to offer less training to our employees; and we don’t see any of this changing before the end of the year.” The paradox of employee learning is that, to save money, fewer people are doing more jobs but learning less. Instead of saving money, this is costing more in terms of lost revenue, decreasing market share, failure to retain high performers, poor employee engagement, and an inability to respond when the economy picks up. The opportunity for employees to learn how to do their jobs more effectively, be more effective managers and leaders, and help other people in their organizations be successful, is critical to being successful as an organization. Eliminate that learning and these companies will find that they cannot provide great customer service and they cannot make great products. They might save money in the short run but they will lose loyal customers and market share in the long run.