Managers want training tax credits to tackle recession

London – The Chartered Management Institute is calling on Government to tackle the recession by offering tax relief to businesses who provide training opportunities for staff. The CMI’s call is based on data, released today, showing employers in the engineering sector want greater support from Government, with many looking for opportunities to develop skills amongst their existing employees.

Ruth Spellman, the Institute’s chief executive, says: ‘We are calling for tax breaks for businesses investing in their staff and are developing our proposals with key partners . Put simply, employers should be encouraged to develop staff because a depleted organisation with fewer skills to call on is less likely to survive the recession. It isn’t a question of baling out business or massaging unemployment figures, but creating a strategy for survival that reduces redundancy rates over the long-term.”

In a recent  survey, the CMI asked how business leaders across the engineering sector plan to manage the economic downturn. Key findings suggest that employers in the sector are heavily reliant on Government to make bold decisions:
- 85% in the engineering sector want even more financial support from Government to help develop employee skills
- 57% say flexible working regulations must be applied across the whole workforce
- 53% in engineering have also called for a reduction in business taxes

The results, said CMI, show that only 21% in the sector believe ‘Government can do little to affect the downturn’. Many respondents also suggest that Downing Street should push through measures aimed at motivating staff to perform. For example, just 21% in the engineering sector think that the proposed right for employees to request time of for training should be held back.

Spellman said: “Developing skills and motivating staff to perform comes at a cost, but a recession is about making sensible cut-backs, not wholesale budget reductions that will leave organisations floundering in the future. Government and employers need to think about how they will manage immediately and when we eventually turn a corner, meaning there is a case for guidance through better regulation. After all, if they think the cost of competence is expensive, they should consider the cost of incompetence.”

The survey also shows that employers accept some responsibility for tackling the recession, with many respondents focusing on reducing pay outs so that funds are available to ease cash-flow:
- 17% in the sector are considering reducing dividends for stakeholders and 18% are also looking at implementing ‘pay freezes’ over the next 12 months
- 15% in engineering will restructure their debts and 43% are considering mergers as a route to survival
- encouragingly, 67% in the sector have already implemented product innovation programmes and 44 per cent claim they have diversified into new markets.