Unless you've been hiding under a rock or in a coma these last few months, you'll know the world economy isn't looking very healthy at the moment. The 'credit crunch' is really starting to bite, stock markets are starting to fall, and job losses in the financial sector are starting to affect other areas of business. Whether the world is heading for another full blown 1990's style recession, or just a minor correction is hard to assess right now. Nevertheless, far thinking businessmen and women should start making contingency plans for what to do if it all goes wrong.

You may have to put expansion plans on hold, look for cheaper suppliers, even trim the payroll by laying off staff, making them redundant, or not replacing them when they leave. One thing you shouldn't dispense with, though, is training -- either for yourself, or for your employees.

Back in the 1990s, many companies cut the training budget back to zero, and regretted it when the recession was over. It's easy to understand why they made this mistake; after all, they thought: Why bother training the workforce when we might be having to let the workforce go. The money saved could pay a few bills.

By all means look for cheaper alternatives -- self study courses or e-classes rather than classroom based training, say -- but doing away with training altogether is a big mistake.

Why? Several reasons. First of all, things are changing and evolving even if the economy isn't doing very well. New software titles are coming out. New techniques are being developed. New products are being invented. New laws are being passed. Not keeping up to date with these changes puts you (and your employees) at a disadvantage when things pick up again.

Second, with bad news all around, it's very easy for your employees to become de-motivated. After all, if you're not investing in them, they might start to feel there's not a lot of point in doing their jobs well if they're not going to keep their jobs for long. While that may or may not be true initially, in the long term such thinking can quickly become a self fulfilling prophesy. If your staff have get new skills, they'll to want to try them out and achieve a positive result -- which can be very good for business in the long run.

The same goes for yourself. It's very easy to become bogged down into doing the same old things the same old way. You may even have to take on roles that had previously been assigned to someone else. If you just try and 'wing it', you're heading for trouble.

Also, it's certainly more cost effective to train an existing employee to fill a vacancy when someone leaves than it is to hire a new replacement. While it's important to bring 'new blood' into your organisation, in difficult times, you may be able to share the workload between several of your current staff, giving them each some more training and a small increase in their pay. This can often work out cheaper than an expensive new hire -- particularly when you factor in all the associated cost like agency fees, advertising, and so on.

Later, when things pick up again, both you and your staff will be in a much stronger position to take on your competitors and win!