Not every business performs all its processes in-house. Organizations often delegate key services, such as office maintenance, talent sourcing, and public relations, to qualified outside contractors. Outsourcing training is yet another service strategy that uses external suppliers to deliver a broad range of training-related services.
How does outsourcing training work?
How organizations outsource their training needs depends on the sourcing strategy they pursue. The two industry models include Business Process Outsourcing (BPO) and Out-Tasking:
- BPO typically entails an organization hiring a third-party contractor to manage and operate the entire corporate training process. The selected vendor is responsible for every aspect of training—from training needs analysis, development, and delivery to ongoing follow-up and re-training.
- Out-Tasking as a training outsourcing strategy, however, is less extensive in its scope. In this approach, companies usually choose outside vendors to deliver a sub-task within their overall training strategy—such as eLearning development. All products, processes, and technologies related to that sub-task are then owned, implemented, and managed by the outsourcing vendor.
BPO is a strategic outsourcing strategy, while Out-Tasking is more of a tactical approach to outsourcing. Both approaches, however, free up in-house resources from segments of training workflow they would otherwise own, manage, and administer themselves.
Outsourcing eLearning development—what you should know
Businesses typically embrace a robust training outsourcing process for quality, time, and cost considerations. Many organizations ramp up their in-house eLearning development capabilities closer to launching a new online learning initiative. However, once the program is complete, those resources either remain idle or are let go. That’s a waste of training dollars and time!
Before committing to an outsourced eLearning strategy, here’s what you must consider:
- Quality: Can you produce quality eLearning with in-house resources?
- Time: Do you have enough resources—people skills, technology, SME expertise—to finish the job on time?
- Cost: Will your efforts result in a lower-cost product than outsourcing it?
Bottom line: If the answer to these three questions is no, then outsourcing training may be the right choice. Using outside vendors will likely result in a better return on investment (ROI).
Is outsourcing training the best solution for your organization?
If outsourcing seems like the right solution, there are some points to consider to ensure you receive the best training solution.
When and how to outsource training
As discussed earlier, if you can’t match the quality, time, and cost of an outside vendor, then it’s time to outsource. So, how do you go about outsourcing?
- Define your requirements.
- Create a Request for Proposals (RFP).
- Do your research and request proposals from pre-qualified vendors.
- Evaluate responses to your RFP from qualified training outsourcing companies.
- Negotiate specific terms and timelines.
- Initiate, monitor, and evaluate your project throughout its lifecycle.
In-house vs. outsourcing
One of the limitations of outsourcing management training is that you might not have total control of the project—not like you would if you did it in-house. The best way to address that challenge is to ensure you define project deliverables and timelines very clearly. With outsourcing, especially in fixed-fee contracts, project costs have greater visibility. Because multiple departments typically share in-house training resources, time and cost accountability is often a gray area for in-house Learning and Development (L&D) teams.
Benefits of training outsourcing
When done right, working with outsourcing partners to design, develop, and execute eLearning and other corporate L&D programs produces many benefits. Some of the benefits of outsourcing training include:
Planning, designing, developing, testing, executing, monitoring, fine-tuning—these are challenges that every in-house L&D team must face to launch even the most simple corporate training programs. When pressed for time and resources, outsourcing those challenges makes good business sense. Put succinctly, an outsourced training strategy has fewer challenges than one that’s run in-house.
Increases geographic reach
When operating in a geographically-dispersed environment, it’s hard to have in-house mastery of every aspect of training across the company. Training needs, along with compliance and regulatory aspects of training, differ from country, region, and continent. Multi-jurisdictional training outsourcing companies bring a diverse set of cross-jurisdictional expertise to your training needs.
In industries where change happens frequently, it’s hard to keep up with changing training needs. Only multi-disciplined outsourcing vendors can address those changes quickly. Regulatory environments change. Certification requirements change. Training technology changes. In-house training teams often have a tough time keeping up with such changes. They spend their time updating and revamping existing content … and the next change makes it outdated and irrelevant.
Outsourcing management training to an outside training specialist, for instance, allows your staff to get updated on the latest management theory, principles, tactics, and techniques instantly. The vendor will already have a suite of training modules that they can quickly customize for you to train and certify your team in the most timely manner.
Leveraging the cost of technology
Training outsourcing companies benefit from the scale of operations. Through repeated and frequent use of their tools, processes, and technology over multiple clients, they reap a better ROI from those costs than companies developing their training in-house.
What to consider before outsourcing your training
Every business uses electricity, heating, and cooling, but it doesn’t always make sense to hire, train, and employ a team of electricians or HVAC specialists. The same is true for training outsourcing. The strategy makes sense in some situations, but it might not make good business sense in other circumstances. Here are some factors to consider before you outsource your corporate training needs:
Successful companies excel at what they do best—which are their core competencies. If eLearning development or corporate training is not your organization’s core objective, then you should consider outsourcing training. Have your team focus on the big picture—training strategy, five-year training roadmap—and let the outsourcing vendor execute your vision. Not only will you get results in record time, but the specialists at the outsourcing company will deliver higher-quality training content because that’s their core competency!
If you have training budgetary limitations or you can’t afford to invest in building in-house eLearning development or training delivery capabilities, then outsourcing training might be the right strategy for you. On the other hand, if your organization has frequent training needs, then spending money building in-house training capacity might be a wise move.
Alternatively, your company’s training development needs may require high-value expertise and tools. If those skills aren’t core to your business, then making budgetary allocations for those capabilities may not be advisable either. Hiring outside training consultants on an outsourced engagement might make more financial sense.
Training entails aspects of liability that many L&D specialists might not appreciate. Regulatory mandates, industry rules, regulations, compliance requirements—these are aspects that must be addressed when developing and delivering training. And some in-house training teams of multi-jurisdictional organizations may not be fully conversant with regulatory requirements across the company.
This means that the company must assume liabilities related to the regulatory frameworks in which they deliver training. One of the benefits of outsourcing training to specialized eLearning outsourcing specialists is that they have in-house subject matter experts (SMEs) whose knowledge and experience help mitigate some of those liabilities.
Current resources and tools
Owning the latest set of eLearning and training development tools makes good business sense—but only if you use them often and use them effectively. There are costs associated with such tools—initial acquisition, ongoing licensing, infrastructure, training and education, and more. Typically, major version changes create additional costs that organizations must invest in if they wish to remain current in their training development technology.
Analyze whether there’s a cost-benefit advantage. If the cost of owning and maintaining these tools outweighs the benefits, then your company should consider implementing a training outsourcing process that relieves you from incurring those costs.
A small in-house team with low-level skills and experience may not do justice to a large-scale project—it may be more cost-effective to outsource. However, size matters when it comes to working with training outsourcing companies. That’s because economies of scale play a vital role in their (outsourcing contractors’) decisions. For instance, some companies might not find it economical to mobilize a team, dedicate resources, and initiate their full project-management lifecycle for a project that’ll last for a few days and net them just a few thousand dollars.
Consequently, they may charge you a higher unit cost or per-diem rate. That’s because the usual (fixed) costs associated with undertaking small-scale projects might not make economic sense for them. It might, therefore, make better sense to handle small projects with in-house resources instead of outsourcing them.
We’ve all heard of “runaway” or “never-ending” projects, where the final project completion date far exceeds initial projections. Because the client (you!) has limited “oversight” on outsourced resources, it’s often hard to directly influence project timelines. The resulting scope creep may also impact project timelines adversely.
When outsourcing management training or development of eLearning training, one industry best practice to monitor and control project timelines is frequent updates. Once a project kicks off, it’s important for client and vendor teams to continually (and jointly) monitor timelines and take immediate corrective action when necessary.
Well-thought-out training strategies provide a competitive edge to any organization, and outsourcing corporate training often makes good business sense. It delivers high-quality training—on time and within budget. However, before you think about outsourcing training, make sure it’s the right move for your company. Most importantly, make sure you choose the right outsourcing partner to help you implement your eLearning and training vision.