The benefits of outsourced training
Tony Willson outlines the many benefits that can be gained through outsourcing your training and offers his advice on how to get the most out of the process.
During the recession businesses had no choice but to cut back on resources and one area that is often among the first of the casualties is training. Although a cut in this area will most certainly bring about a rapid, short-term financial benefit, it can be counter-productive and very costly in the long term. Training has long been identified as one of the key influencers in effective employee engagement and staff retention. Poor training and development has been proven to have a negative effect on the workforce, prompting people to seek employment with companies who do offer opportunities for self improvement.
Companies who do not make training a priority can also find that businesses who do, find it easier to gain the competitive advantage, particularly on tenders as a well-trained workforce will be perceived as having the skills that are needed for a business to deliver a quality product or service. Removing training altogether, or reducing it to the extent that it becomes ineffective, achieves nothing positive for a business. But how can a reduction in costs be achieved whilst retaining a pro-active approach to the subject?
Outsourcing makes use of other people’s expertise to run non-core parts of a business, thereby reducing costs, relieving people of unprofitable and non-core tasks while the business retains overall control.
Is the penny beginning to drop?
More progressive and adaptable companies are beginning to look at ways to maximise results from their training budgets, rather than cutting them. Training is now being regarded as a more vital business function and no longer as merely necessary for compliance with legislation such as health & safety or financial and its role in motivating and retaining staff is now fully recognised.
Although a relatively small function in the majority of businesses, training and development can most definitely be a drain on internal resources as it requires consistent and careful administration and management. The process can be made far more efficient and effective by outsourcing it.
For many years, outsourcing has been successfully delivered in areas such as facilities management, transport, catering, IT, salaries and human resources. This has enabled companies to offload non-core functions and reduce headcount and to avoid financial outlay on staff, software and equipment, new system installations and upgrades and to avoid other employment law liabilities. Instead, the administration and co-ordination of these functions are managed by experts in the field who can offer a comprehensive, every-day service.
Gain control but reduce the burden
Even if the business does not employ someone to manage training, the basic administration often takes up the time of managers or other staff who have more important jobs and in these (thankfully) busy times, this reduces their effectiveness in their core area of expertise. This is a cost, although often it is ignored.
Outsource suppliers are either training companies who will supply courses as part of their contract, or are independent (‘vendor neutral’). The former usually means that a client pays a price for the training courses that reflect a profit for the supplier. The vendor-neutral model means that the supplier negotiates hard for the best rates from outside trainers but charges a fee for the management side.
Businesses usually benefit from the services of a training co-ordinator who will deal with their training issues regardless of holidays, maternity or paternity leave and sickness, although larger outsourced providers do have less personal call centres. Good outsource providers will set key performance indicators that are focused on the delivery of a high service level that will benefit their clients’ business and staff and help them achieve their business goals.
What should you consider before outsourcing?
Having established that better trained people are typically more motivated and loyal and that those qualities in a workforce help businesses to achieve their objectives, how should you approach the process of outsourcing to achieve optimal benefits?
- Decide what and why. Outsourcing must be done to achieve strategic objectives such as to reduce (not increase) overheads, gain specialist knowledge, start a new service, decrease staff turnover etc. At the very outset an organisation needs to carefully consider why they should outsource and what should be included. Sometimes it is the actual course organising that is required, sometimes the recording, sometimes part of the function and other times the whole of it.
- Set clear objectives. Outsourcing is not just about saving money. If that is the only objective that is set, areas such as quality can suffer. Decide what it is you want to achieve, not only from a strategic point-of-view but in terms of what results you will require in order to increase efficiency, as well as minimising cost. Results must be measurable and a reporting system should be set up to ensure that targets are being met.
- Choose carefully. Once you have set clear objectives and can brief prospective suppliers on what is required, then you need to find the right partner. In the first instance, I would recommend that you speak to others who already outsource the same business function. Try social media networks such as LinkedIn or network face-to-face with business groups and if that fails, try the internet. Once you have a shortlist, research their websites to make sure that they offer what you want and treat the process of finding the right one in a similar way you would if you were employing a senior member of staff.
- Who will you be working with? Insist on meeting the person who will be ultimately responsible for the day-to-day running of your contract, as it is unlikely to be the person who pitched to you. Your people will need to work well together with the provider for the venture to be a success.
- Contracts. Once you have selected your provider, you must have a contract that fully sets out your expectations, including provisions such as deliverables, payment terms, service levels, penalties for poor performance and termination details. The contract, in common with many contracts, is probably going to sit in a drawer while things are going well but should things go wrong, it will come into its own.
If you identify that learning and development is very important but is a non-core function that can be outsourced, invest the time to find the right provider to carry out the right functions for you, then outsourcing is certain to succeed. By concentrating your resources on what it is that you do best, you can achieve higher levels of profitability, happy, well-used staff and a healthy business.