I once worked in a bank where the CEO decided to shut down the training division. He was chasing short term cost advantages (and got them) and his view was that the leadership of the bank should provide the training. I remember once when - after spending a lot of money on developing a new system to better manage customer files and records - he decreed that the line managers would train the staff in implementation. So instead of spending time building market share and helping my team win new business and retain customers, I spent three weeks showing staff which buttons to click on a screen (after I had learned the system myself through trial and error). In effect - for the time I worked there - the only training I was able to provide for my staff was that which I implemented by scratching budget in from other areas and doing some ad hoc training through external providers - or by piggy backing my staff onto a little bit of training that was being done by another division in the bank.
Really what was happening was that we were mining the experience of the longer serving staff (who had been properly trained) without replenishing the organisation's talent pool.
Needless to say, the bank found it could not retain young talent and a huge part of the line managements activity was in recruiting new staff to replace those who had left to join another organisation. End game? The bank was taken over by another bank not long after I also moved on.
This research by McKinsey is really interesting reading. Organisations that will build competitive advantage are those whose senior managers are critically supportive of both technical and soft skills training.
McKinsey Survey on Building Organisational Capabilities March 2010
So - don't skimp on training your people. It is probably the biggest thing you can do to build sustainable competitive advantage.