Training Effectiveness in Times of Austerity: A Case of an Oil Subsidiary Company in Brunei

Training Effectiveness in Times of Austerity: A Case of an Oil Subsidiary Company in Brunei

Nur Ehsan Ibrahim (Universiti Brunei Darussalam, Bandar Seri Begawan, Brunei Darussalam) and Wardah Azimah Haji Sumardi (Universiti Brunei Darussalam, Bandar Seri Begawan, Brunei Darussalam)
Copyright: © 2020 |Pages: 19
DOI: 10.4018/IJABIM.2020040107
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Due to the fall in oil price, many companies are looking into ways to cut cost. Despite such cost-cutting efforts fuelled by the constant pressure for companies to stay competitive, the importance of training is still widely recognised. In response to limited training funds, companies are forced to revise their training programmes and make changes in their mode of delivery as part of their austerity measure. One of the approaches taken by an oil subsidiary company in Brunei is the increased use of in-house training and online-based learning (e-learning). This article seeks to evaluate the effectiveness of such a training approach when it is adopted. This allows training to be appraised in tangible terms, i.e. how much trainees have benefited to provide evidence to justify the importance of training, in times when training is assumed to be among the first casualties.
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Due to the drastic drop in oil price since summer 2014, from USD115 per barrel to its lowest at USD30 per barrel, the global economy is heavily impacted particularly affecting oil producing countries (Hazarika, 2016). Major oil and service companies were directly hit and are still struggling to cut losses, adjust budget to reduce operating cost and maximise their revenue. According to studies (such as Werner and Desimone, 2005; Teague, 2014) one of the very first decisions made on a budget cut is to limit employees training due to its uncertainty in determining added value on the employees’ job performance. Although it is often suggested that training is an early casualty in times of economic downturn, Jewson et al. (2015) believe that it is not always as vulnerable as feared. It is argued that rather than eliminating training, economic difficulties may instead encourage companies to make changes in the mode of delivery (Felstead et al., 2012). Jewson et al. (2015) further mention that in times of limited training funds, companies may choose to reduce the frequency of courses, prioritise courses, tighten the application of eligibility criteria among potential trainees and economise on training delivery. This include the increased use of in-house training provisions, incorporation of trainer functions within the roles of regular staff, expansion of on-site and group training and enhanced use of e-learning. However, the question is – How effective are such approaches? This question is highly pertinent and merits investigation because the economic justification for companies to invest in training has come under the spotlight as their budgets have tightened.

The study explores this question by presenting evidence from a qualitative case study of an oil subsidiary company located in Brunei. In times of recession, the subsidiaries of the oil company worldwide are forced to cut its budget in training and development. Before the global economic downturn, it is a common practice for the company to train their employees, from new hires to upper management, at their dedicated training centre located in the parent headquarter, which is equipped with state-of-the-art training facilities and designated trainers. In order to cope with tough times, the subsidiaries are moving towards adopting the least costly human resource development (HRD) practices. This involved an increased use of in-house training and online based learning (e-learning). With such changes in the learning environment, the study attempts to find out the effectiveness of the revised training approach.

To evaluate the effectiveness of the revised training approach in the case organisation, the study adopts Kirkpatrick’s (1959) training evaluation model. Reio Jr. (2017) points out that this model is the most used evaluation tool by companies due to its comprehensive strategies in evaluating organisation training. Moreover, since the model operates based on the presumption that the return of investment is one of the critical aims of training initiatives, it helps to provide the economic justification for companies to invest in training. Based on this model, the study examines the following: (i) the reactions of the employees to the training programs; (ii) the level of employee’s learning; and (iii) the employee’s transfer of training. This model is designed based on traditional classroom instructions and to add value to this model, this study also extends the model to e-learning training session.

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