Outsourcing: Outward bound

Two in five UK organisations now outsource training to external providers, according to a survey by Capita Learning & Development in October last year. So what’s the attraction?

The reasons are varied, but one of the most common is a lack of internal resources. If training needs fluctuate, it can be hard for companies to justify having an extensive training department. So bringing in an external provider when training is required can be cost effective.

“This is often the case if the training cycle goes in peaks and troughs,” says Rod Edwards, chief executive of training provider Knowledge Pool.

Brian Sutton, director of learning at training company QA, says many companies that look to outsource are initially aiming to save money. “This can be achieved through greater administrative efficiency and the leveraged procurement and purchasing power available to outsourced providers,” he says. “More recently, however, we have found customers are looking to outsource training services at a more complex level.”

He adds that customers’ more ‘complex’ demands include wanting tools to understand skills capabilities, linking future skills development to organisational needs, and providing mechanisms to evaluate and review learning investment.

Focusing on strategy

The growing need for companies to deliver training and link it to wider company strategy means many organisations would rather free their time to focus on strategy, rather than delivery. “Some companies that choose to outsource training just recognise that training is not a core competence and they want to focus on other more strategic areas,” says Edwards.

John Andrews, head of Accenture Learning, says training is increasingly being seen as critical to an organisation’s ability to sustain high levels of performance over time. So adopting a more strategic mindset is key. “As executives turn their attention to using learning to grow top-line revenue and increase market share, they need to approach learning with a new vision in mind,” he says.

So what does this mean for the internal training function?

Andrews says that outsourcing can ultimately lead to jobs being redefined, but it very rarely means responsibilities are reduced.

“People can often feel threatened by an outsourcing relationship, reasoning that their job responsibilities will be diminished with the deal. This is rarely the case and instead they often gain a more tangible and visible impact on the business, while leaving the learning execution to the outsourcing partner,” he says.

Roles must be defined at the beginning of the partnership, so that everyone knows what the internal and external responsibilities will be in delivering the training programme.

“A partnership works best when there is a totally transparent service,” says Edwards. “It’s also important to keep strategic control of the programme in-house – outsourcing this can be going too far.”

Staying in control

One of the main misconceptions about outsourcing is that companies will lose control. However, as long as you have the right agreement in place, the opposite can be true.

“Companies actually gain more control over the output because they hold the supplier accountable through service-level agreement,” says Andrews. “Outsourcing frees organisations to focus on the strategic nature of the business, while maintaining the rights and ownership of their intellectual property.”

Edwards says that objectives set out at the beginning of the partnership need to be flexible, as they will invariably change over time.

“If you try to write set objectives into a contract, it will end in tears,” he says. “You can’t have fixed requirements. You need to have absolute clarity in a contract, and not just include payment and terms and conditions.”

Tony Wright, former training director at retail giant Arcadia, is now director of retail training organisation First Friday. He believes it is important for companies to choose a training provider that specialises in their sector if the partnership is to work effectively.

“The training provider needs to understand your business and the roles within that specific business,” he says. “All our trainers have line management experience in retail, so they understand the roles they are training people to do.”

Wright adds that it is equally important for external providers to take internal knowledge on board. “Internal managers know what works best in their business. Outsourcers just provide extra skills,” he says.

He recommends appointing a project manager who can allocate roles and make sure that contact between internal and external functions remains regular. “We go into organisations very conscious of the fact that some internal staff may feel we are treading on their toes, so being clear on what you are going to deliver is important,” he says. “It’s all about trust. Once we gain trust within an organisation, we are then given greater freedom.”

Andrews agrees that regular contact and clear objectives are key to success. “The team needs to be very clear about what and why the client is outsourcing, and what value is trying to be generated. Then the team must remind itself of these goals every day,” he says.

Review, review, review

Continual reviews are essential if the training programme is to achieve these goals. You need to go back and look at the objectives set at the start of the programme, and ask if they are being achieved. Edwards says: “Reviews with the external trainer should happen weekly on ground level, monthly on a management level, and quarterly with the chief executive or HR director.”

When choosing an external provider, cost will be an issue. But a good outsourcer will make the pricing model transparent, so do not be bamboozled by figures. “You need an honest business case that takes into account core costs plus management time,” says Edwards.

There are many different pricing models. Some are based on a day rate to deliver training, which can mean you only pay for what you need. But some outsourcers may be motivated to make the work last longer. So a popular option is a fixed price for a particular programme. “This way, the outsourcer takes on more of the risk,” says Edwards.

Organisations may also be able to strike a deal with outsourcers so that the final bill depends on achieving specific and agreed targets.

But Andrews says hiring an outsourced provider is not just a matter of the lowest price quoted, or the highest savings promise. “It is also about flexibility, industry knowledge, client track record, creativity and, most importantly, culture fit,” he adds.

Ten top tips for successful outsourcing

  • Choose a provider with experience in your sector and a good track record
  • Get quotes from different providers and ask exactly what prices include
  • Make sure terms and conditions are clarified in a contract, but do not include specific business objectives as these may change
  • Get the internal training function involved from the start – this should be a partnership
  • Having a project manager will help keep the programme on track
  • Arrange early discussions to set objectives and key performance indicators and review these on a regular basis
  • Set clear roles for both the external trainers and internal staff
  • Keep strategic roles internal – outsource delivery only
  • Set fixed timeframes to review how effective the training programme is
  • Make sure top-level management is involved in the review process

Case study

When mobile communications company Orange recruited 1,000 new customer service representatives in six months, it had to provide them with an effective induction programme.

It decided to use external training provider KnowledgePool to help deliver the training. Twenty trainers were assigned to work alongside Orange’s in-house training team.

Orange training and development manager Lisa Blewitt says: “We recognised that training an additional 1,000 people would create an impossible demand on our in-house training resources. We resolved this by creating a training partnership. KnowledgePool was the obvious choice as we’ve worked with them in the past, and we’re very comfortable with the cultural fit.”

Orange runs a three-week induction programme for new contact centre staff. It includes a mixture of instructor-led workshops and e-learning.
“KnowledgePool was able to provide excellent trainers who could hit the ground running,” says Blewitt. “This enabled us to meet the demand for training without compromising the quality of the inductions in any way.”

The outsourcer provided a project manager to co-ordinate and review the activities of its trainers. “We gained the expertise of Knowledge-Pool’s trainers without the administration and co-ordination headaches that are involved in making sure they are in the right place at the right time,” adds Blewitt.

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