While the market for outsourcing training has been slow to take off compared to other organisational functions, more and more companies are now considering this option.
According to a report published last month by research company Gartner, the market for outsourcing HR processes in western Europe will expand by 6.5% this year – when it will be worth more than £2bn. The lion’s share comes from the management of payroll and benefits administration by external providers, but Gartner says outsourcing of education and training is also growing.
In the US, where the L&D outsourcing market is more mature, the American Society for Training and Development (ASTD) last year reported that 40% of large companies already outsource aspects of their learning content design, training procurement and delivery. Of the 178 organisations surveyed, more than two-fifths (41%) said interest in L&D outsourcing will increase over the next few years.
According to Gina Cannon, marketing manager at UK IT training company Parity, outsourcing training can take many forms. At a basic level, it can be a cost-saving exercise designed to streamline the administration of training and will include the booking of courses and venues, invoicing suppliers and issuing joining instructions.
Reluctance to talk
More strategic relationships with outsourcing providers will involve developing training programmes against business goals. They will also include the evaluation of training and the management and benchmarking of multiple training suppliers.
However, many providers of such services in the UK are reluctant to talk about outsourcing per se. Perhaps they’re mindful of the negative connotations attached to the term and the general view that jobs and functions will be outsourced to a cheap labour economy, such as India.
In any case, L&D professionals considering outsourcing will likely have to grasp terms such as strategic insourcing, strategic partnerships and, increasingly, managed training services (MTS).
At training company Hemsley Fraser, director of business development Mike Spurling thinks companies are sometimes hesitant to consider outsourcing because of the far-reaching nature of the learning and development function.
“Training in one form or another touches everyone in a company and is an important aspect of any organisational culture,” he says.
“Naturally, there are concerns about trusting someone else with the development of your people, but if companies were aware of the true benefits, they would outsource more readily.”
Of course, trust is something that must be earned. The longer you work with an outsourcer, the more confident you will become in the services it provides – at least that’s the theory.
But, says Philip Markham, a people development supplier manager at IT services company Fujitsu Services, rigorous research into the market and potential providers can ensure you recruit the right partner for your organisation.
Fujitsu recently signed a contract with managed training services provider KnowledgePool, to manage its training delivery, but only after a comprehensive three-month tendering process.
“We weren’t afraid of outsourcing our training as we are aware of the benefits it can bring, but there was a lot of fear about making the wrong choice of partner,” he says.
Markham advises training heads to thoroughly test the various learning management systems that are at the heart of many offerings and visit other companies using that service provider. As important, he says, is to ensure you have fully thought through the specifications of the solution you are after and what you want to achieve.
The objectivity of the service provider can also play a big role in selection, says Joanne Roadknight, sales director at learning consultancy, Star Consulting.
Do you want a supplier-neutral partner, offering training from a wide range of suppliers, or do you want a company with its own scheduled training programmes? “Both have pros and cons,” says Roadknight.
Supplier-neutral providers, she says, get better discounts from a wider range of training suppliers because they aren’t in direct competition. But a company with its own training programmes will give great discounts on its own courses, though sourcing a variety of options with competitive pricing might prove difficult.
Whatever contract length you decide on, it is important you build in a probationary period. Roadknight suggests six to 12 months. In this time, teething problems can be dealt with the value-add to your organisation can be assessed and cost-savings and service level agreements (SLAs) monitored.
The SLAs you put in place will depend on what you are looking to get out of the contract and your business needs. Cost-savings is an obvious one, where you can demand that you achieve, say, a 10% saving on all training compared with the recommended retail price.
Other SLAs can cover your provider’s responsiveness in confirming a place on a course, supplying joining instructions and following up any learning with an evaluation process.
“You may say you want initial feedback forms to be sent out electronically within 48 hours and then for a second follow-up to occur three months after the event,” says Roadknight.
KnowledgePool’s learning strategy director, Kevin Lovell, emphasises the advantages a managed training services provider can bring when it comes to evaluating training.
He says in a lot of large organisations, the management of training suppliers and the assessment of training is so chaotic that companies don’t even know if they are getting a satisfactory return from their training.
“With different departments buying from multiple suppliers, sometimes not even all the tick boxes are collected – evaluation falls by the wayside,” says Lovell.
He says KnowledgePool bypasses these issues by having one single form that is e-mailed out to attendees shortly after they have finished their training, regardless of the event they have attended.
Follow-up, at Kirkpatrick level three assessment, is carried out a few months later. E-mail is used to get feedback from individuals and their managers on how effective and useful the training has been.
Because the same form is used across the board and sent back to a central system, data soon builds up, so the results of different suppliers can be compared.
“We can also benchmark different company departments and sites to see whether standards are being maintained and who is getting value for money,” says Lovell.
Case study: Fujitsu
In May, IT services company Fujitsu recruited training services company KnowledgePool to manage the supply and evaluation of the £8m to £10m worth of IT training and management and personal development programmes the company uses per year.
“We have some good systems that identify learning needs but we needed to address the delivery – probably the area of training that has the biggest impact on the bottom line,” says Philip Markham, people development supplier manager at Fujitsu.
At the heart of the service is an electronic catalogue of training courses that every staff member of Fujitsu has access to and can book via a web browser. The catalogue also contains Fujitsu’s own internal training programmes.
“The system regards us as another supplier alongside external suppliers, so that individuals can compare and choose the best course for them,” says Markham.
While KnowledgePool manages the sourcing of training, Fujitsu retains an internal team who administer the authorisation process and deal with queries or problems from their colleagues.
Once the training is delivered, feedback from delegates and managers is collated and a monthly report sent out. This analyses the performance of each supplier and as well as individual departments within Fujitsu.
Markham and his team also meet KnowledgePool on a regular basis to discuss other important intelligence created by the system.
“They actively observe which training courses our people are searching for through search engines and phoned requests and can match this to new trends or training courses out there in the market. They are our eyes and ears,” says Markham.