Organisations can cut up to 30 per cent off their learning costs by addressing four areas of inefficiency, according to a new white paper launched today by KnowledgePool.
Called Are You Cutting It?, the paper exposes supplier management, administration, scheduling and solution design as four areas where organisations can make significant savings.
It features a worked example showing how a company with a £1m learning budget could cut its learning costs by 31.9 per cent.
“Right now, many organisations are looking to reduce their training spend by 20 to 30 per cent,” said Kevin Lovell, Learning Strategy Director at KnowledgePool and author of the paper.
“You can’t make that kind of saving just by working harder. Our experience of working with L&D teams shows that savings of this magnitude are realistic.
“Every organisation is different of course but if you look closely at the efficiency and effectiveness of your L&D operation, the four areas identified in this paper will point the way to significant cost reductions.”
According to the paper, organisations can save 7 per cent of their supplier costs by improving their supplier management.
“Creating a preferred supplier list for all external training minimises the number of supplier relationships you have to manage and it maximises the potential for discounts,” said Kevin Lovell.
“After negotiating the best deals, it is important to ensure that everyone uses only those suppliers.”
By using specialist technology to automate the booking, authorisation and post-course evaluation of training, the paper claims that organisations can cut their L&D administration costs by around 30 per cent, which equates to a 7.5 per cent reduction in the overall cost of learning.
“Many organisations still process large volumes of course bookings and post-course evaluations manually,” said Kevin Lovell.
“This repetitive and labour-intensive work swallows up a huge amount of resource. Automation can dramatically increase efficiency in this area and lead to substantial cost reductions.”
The paper reveals that organisations can save 2.6 per cent of their learning budget by improving the occupancy of internal training events and ensuring that events with low take-up get cancelled before penalty charges are incurred.
9.5 per cent can be saved by introducing longer-term planning and by restricting the ad hoc scheduling of training by individual managers.
The paper claims that organisations can achieve a 9.5 per cent net reduction in their cost of learning by redesigning their learning solutions.
It recommends that the relevance and effectiveness of training interventions should be reviewed every two years, as the needs of the business will change, and it highlights, for example, that classroom-based courses can be redesigned and delivered using different approaches such as blended learning.
“The obvious place to look, when making learning budget cuts, is external supplier costs but greater reductions are possible through ‘intelligent’ scheduling and solution design,” said Kevin Lovell. “A 30 per cent cut in learning costs may sound extreme, but it is achievable.”
The white paper lists some additional savings which can be achieved by outsourcing the organisation and management of learning to a specialist, vendor-independent provider.