With the recession and consequent purge on the cost base, training and development for many organisations, is still their ‘poor relation’ in terms of spend. Cutting training budgets became a necessity during hard times but now that there is a need to train and retain personnel as not training people has some negative spin-offs:-
- Employees will feel that they are not being developed and so become dis-satisfied with their role – and the expanding jobs market is a reason for them to start to look around
- A lack of training means a lack of skills and professionalism and this can lead to poor customer service, mistakes and lost business
- As natural wastage (retirement, moving on, illness etc) occurs, there will be succession problems because the skills of the experienced people will not be there – and recruiting new people is a very expensive exercise
- Health & Safety issues may be compromised and falling foul of the HSE or Local Authority is costly, in terms of fines and lost reputation
- If an organisation does not develop staff, it will be far behind the competition and consequently have to spend more to catch up
Unfortunately in the recession, many organisations lost their training and development person and therefore ‘landed’ the role with someone as an extra job. These people cannot give the work their full attention, it causes them to spend reduced time on their main role and what they do has to be done less efficiently than it should be. But organisations haven’t yet appreciated the need to re-employ a dedicated person due to the cost.
And few Directors fully appreciate how these problems can be solved and savings made by outsourcing all, or a part of the process.
There are two main types of outsourcing model.
Training companies who offer a service which covers administration and management of training but they provide the training itself – trying to capture all of an organisation’s training needs and possibly at prices that are above the market rate but the administration is ‘free’
‘Vendor Neutral’ which basically means managing everything including organising suppliers and negotiating good rates with them, with the outsourcing supplier gaining no profit from a course but charging a fee for the administration.
When consideration is being given to outsourcing, research has proven that an organisation’s objectives should be:-
Aligning T&D strategy with business goals
A good outsourcing provider will spend time to fully understand where the business is going, so that any training can be identified as being relevant to those goals
Identifying Needs Accurately
Organisations should look to an outsourcing provider that can either look closely at Appraisals and ‘read between the lines’, or help with the identification of skills that are required. The provider should also be able to identify the best type of training – classroom, on-line, coaching, distance learning so that it fits both the person and the budget.
Delivering what is required
We all know that to promise an employee training and then not to deliver it, is one of the worst de-motivators. Outsourcing the function is almost a guarantee that a training need will be dealt with and not forgotten.
Remaining in Control
Outsourcing is often looked at as being a loss of control but in fact, if carried out effectively, it is actually a means of having more control. Often individuals who have been given the role of T&D, have a core job to do and so training suffers and, in reality, the organisation is actually out of control.
An organisation needs to look at the savings to be gained by employing either types of outsourcing provider both in terms of actual savings but also those indirect ones such as releasing someone who is dealing with training administration, to do a more productive job.
In 2015, for some larger organisations there is a need for on-line booking, text messaging and customised on-line learning but for many SMEs just having someone deal with the training management as if they were a person in their office, is sufficient.
In many sectors there is an increasing demand for training through new legislation and also Clients that, as part of tenders, are requiring more pro-active training. SME’s who ignore this rising requirement will undoubtedly miss out on business. But it is too easy to ignore the future because is it not a pressing requirement NOW! So organisations should consider outsourcing, as it will help them have a pro-active approach that can help their bottom line.
In many organisations there are people in place organising training and so there is a tendency to think ‘in the box’ and not about the more radical options available – which can mean making someone far more productive, as well as saving money by maximising training budgets.
Tony Willson is Managing Director of Helmsman training services, who provide outsourced training for UK businesses.