We are in a "credit crunch". Times are hard. It isn't the first time; and it won't be the last. People tighten their belts and do their best to weather the storm, and businesses focus an even more critical eye on their spending. Often, one of the first things to come under scrutiny is training and development, and decisions are made to put anything other than "essential" training on hold. "Soft skills", (also referred to as "People Skills") often seen as the "fluffy bunny" stuff of development, is the first to be dropped. But how effective is this strategy in reality?

Shona Garner exposes some common "myths" around soft skills and explains why, in the scramble to reduce our spending, going for the "obvious" targets may not be as effective a strategy as you think.

Why do we call "soft skills" by that name, and what does it conjure up for you exactly? What images or words do you associate with this frequently used term?

For me it conjures up some kind of "fluffy bunny", soft, gentle, rather vague term, designed to encompass abilities which are not so easily measured, and certainly less tangible than, let's say your ability to rewire a home, use powerpoint, or know your products inside out. There's something almost apologetic about "soft skills" too; after all these are also often referred to as "people skills" - and we're all, well, people arent we? That being the case, these "skills" will be an innate part of our being already, so there's no real need to spend much resource on developing them.

Or is there?

Over many years, working 1-2-1 or in workshops with managers and teams I am struck by how often the following issues come up: - The team just don't pull together.

- There are 1 or 2 individuals who are extremely difficult to manage or work alongside, and this creates tension in the team.

- Communication, either internally, or externally with clients or customers, is poor.

- One or two individuals are underperforming, either taking many absences, not completing work on time, or resisting doing certain parts of their role, and others are getting fed up of having to "carry them."

- Changes in the wider organisation are affecting morale.

- Team members feeling there's a lack of leadership, of fairness, of support or development, or of valuing what they do - with the result they just "do what they need to, to keep out of trouble" They're not passionate or enthusiastic about their work - this is "just a job" which pays the bills.

Credit crunch or not - if you think these VERY common symptoms aren't damaging your bottom line - think again! I bet I could find at least some of these in your business right now!

And these symtpoms are caused, not because you haven't given these people the training they need to do their job - they are the result of less than effective people skills!

The dynamics of the working relationships in a team can make the difference between hitting, or missing your targets - between profit and loss - between survival in a credit crunch and real difficulties.

And the central figure in that dynamic, who can make or break the team's ability to function, is the manager.

A quick look at some figures, for those of you who really like to see the hard facts!

Gallup research looked at a retailer with over 30,000 employees and over 300 stores. This retailer took great care to ensure each store provided the customer with a consistent shopping experience, whichever store they visited. Using 12 questions which asked workers to rate how they felt about their role, then looking at the answers and the actual results in that store or team within a store, what they found was astonishing, and significant.

They found, that where employees scored more highly in terms of their satisfaction with the "culture" in the team, the hard line sales figures were significantly, and consistently better than those stores where the cultures were hindered by things such as lack of trust, poor morale and little enthusiasm. They found the highest scoring stores were on average:

- 4.56% over sales budget for the year. This translated into $104 million of sales

If the company could transform the poorer stores, this would increase their total sales by 2.6%

- 14% over profit budget The bottom stores missed their profit goals by a full 30%

- Retaining staff by an average of 12 staff more per year than their counterparts in the bottom 25% of the survey This translated into the top stores retaining 1000 more staff over the year. Estimating the average store employee salary, and the cost of finding, hiring and training the new employees, the overall cost to the company was $27million.

How would you like to shave some of that "cost" off your bottom line?

So - next time you're thinking of cutting your training budget to strip out the "nice to have" things like "soft skills" - perhaps you might think again?

Even if you scale down such training for everyone, ensuring your managers are highly skilled people managers is one of the most worthwhile investments you will EVER make.

Copyright (c) 2008 Shona Garner