Based on various definitions presented in the literature, it can be concluded that training and development are the facilitation of the employees in learning competencies that are job-related. Training allows the employees to improve the knowledge, skills, and behaviors so that these can be applied in daily activities of the organization. However, the situation of the marketplace is changing rapidly that have made organizations to review the policies on training. The organizations are putting continuous efforts to invest in the employees that require human, time and financial resources and results in meeting the growing demands to boost productivity, managing technology and retaining talent. For these reasons, training and development programs enable the organizations to sustain the competitive advantage over the competitors even in the periods of recession. The employees have to be delivered training programs that involve more than the basic skills development. These programs should present broader perspective towards intellectual capital creation that enables the employees to develop basic skills required to perform a task and advanced skills such as the use of technology for information sharing. Training programs also make the employees understand the needs of the customers.
There is the scarcity of talent in the labor market that has made organizations to consider the talent management in a different manner. Employees have to understand the customers, products, services as well as the methods of sharing knowledge. They also need to understand the ways to creatively use the knowledge so that the customers can be served in right manner and products can be modified based on their needs.
The whole world has recently faced economic downturn and corporations went through massive cutbacks in the budgets and spending. One of the first items in pulling back from discretional spending is training and development. After the emergence of an economic crisis, profitability declines rapidly and production cost increases. As such, businesses increased emphasis on employee training and focus on developing innovative ways for delivering the training. Furthermore, to maintain profit, businesses curtail their workforce and try to perform operations with a limited workforce. As a result, it becomes very hard to maintain quality services and to satisfy customer needs. After a recession, it becomes a significant challenge for the business firms to manage the cost of employees. Therefore, by implementing training and development programs, firms try to enhance employee’s productivity and efficiency.