Case study Managing the HRD budget Concrete Co is a leading manufacturer of concrete building materials for the construction sector. The company has just under 2,500 employees distributed across the country in si production sites, cleven regional distribution centres, and a head office which includes a small HRD department headed by a training and development manager supported by two full-time trainers (one a specialist in IT training) and an administrator. The research and development centre is located at the site of the company's largest factory. Recently trading conditions have become very difficult as the global credit crunch impacts on house building in particular. Plans to expand into plasterboard and associated products have been post- poned although the acquisition of two regional businesses specializing in leading-edge roof- ing materials is still proceeding. The aim is to merge these into a new division and rationalize costs further by relocating certain functions, including research and development, to the company's existing head office location. The long term goal of the company remains establishing itself as the market leader although the timescale for achieving this has had to be extended. It currently trails its main rival by 11 per cent in terms of market share. As part of this strategy it has invested heavily in new technologies (not only in production and related functions, but also in terms of: distribution and customer service, sales and marketing, and research and development). HRM policies are focused on recruiting and retaining the best talent; HRD policies have been focused on developing competence in innovation, customer care, and process improvement. However, as a consequence of trading conditions the board of directors has decided to reduce the company training budget by 50% from 600,000 to 300,000 euros. The HRD manager has been asked to review the proposed training plan which currently comprises: 1. MBA sponsorship for one director and three senior managers as part of the company's ongoing commitment to supporting the career development of high-fliers: 1 x 41,000 euros, 3 x 27,000 euros 2. Ongoing sponsorship of five staff taking professional qualifications: 1x4,000 euros; 1x 3,800 euros; 1 x 3,500 euros; and, 2 x 3,400 euros 3. Ongoing health and safety training: 20 days training at 600 euros per day 4. Ongoing technical skills training for process operatives: 35 days training at 500 euros per day S. The initial design costs for a new e-learning programme for customer service staff which is going to be implemented in 18 months time: 95,000 euros 6. Ongoing open-learning programme for customer service statt (to be replaced in 18 months time by the new e-learning programme): 27 clays of workshops at 1,100 euros per day plus materials costs of 5,800 euros 7. New product training for sales and customer services staff to support a new product launch in six months time: 21 days at 300 euros per day 8. Induction training for new staff: 12 days at 300 curos per day 9. Ongoing development centres for sales representatives and sales managers: 6 events lasting 2 days each at 3,000 euros per day 10. Ongoing IT training using an external provider: 40 days of workshops and 10 surgery days at 800 euros per day 11. Internal IT training: 100 days at 100 euros per day 12. Management development workshops for middle managers: 12 days at 1,000 euros per day (external trainers) plus 6 days at 100 euros per day (Tand Manager and trainer) 13. Ongoing sponsorship of research and development specialists at 48,000 euros per annum (this includes conferences, seminars, and technical programmes) 14. Contingency to cover unforeseen requests (based on previous two years' experience): 40,000 euros Case questions Imagine that you are the training and development manager and you have to decide which initiatives to support: 1. What programmes will be cut from the training plan? 2. What criteria will you use to prioritize your decisions? 3. Are there any ways in which you could reduce costs so that some of the programmes can be implemented in a different way? 4. What changes, it any, could you make to the design and structure of the HRD department? 5. What are the potential implications for the company of the decision to reduce the training budget