Outsourcing is familiar territory to training professionals who outsource courses and purchase products from services when it isn't cost-effective or timely to develop them in-house. As training professionals grapple with how to most cost-effectively pursue their learning and development strategies, outsourcing is a solution they're using more and more.
A recent survey from the Society for Human Resource Management (SHRM) revealed that 57 percent of the HR and training professionals surveyed outsource all or portions of their training and management development programs. The top reasons respondents listed for outsourcing included cost savings, time savings that allow them to focus on business strategy, and improvements in compliance and accuracy.
Training managers are also throwing more of their money into outsourced solutions. According to research firm brandon-hall.com, Sunnyvale, Calif., most training departments spend up to two-thirds of their budgets buying off-the-shelf training and hiring outside consultants or instructors to deliver courses.
When is it right for you to outsource? To help make these decisions easier, here's a list of 10 questions from the experts to help you determine whether to outsource or go it alone—whether it's to create content, introduce a training program, or launch a learning management system. k
1. What are the capabilities of your training organization? Do you hire it or grow it? Capability is the first factor to consider when deciding whether to outsource training programs, says performance consultant Judy Hale, president of Hale Associates, Downers Grove, Ill. "Does your staff know enough internally that you can grow the capabilities, or are the capabilities so unique that you need to hire them from the outside?"
Training professionals must take time to answer the capability question, says Bill Rothwell, professor in the workforce education and development program in the College of Education at Pennsylvania State University, University Park, where he also oversees the graduate program in human resource development and employee training. "Take a hard look at what you have and don't have in terms of competencies in your organization," he says. "What skills do your employees have that you can transform into training?"
It's important to focus on subjects for which the training staff has energy and knowledge, says Stefanie Heiter, principal of Townsend, Mass.-based consulting firm HeiterConnect. "I wouldn't base the decision on one or two people, but if you have a training staff with a passion around leadership, it doesn't make sense to outsource it," she says. "You can bring an external product inside the company and train your staff to deliver it."
2. What's your internal training capacity? You must also determine whether your staff has the capacity to take on additional training responsibilities. "Are your people already maxed out? You had better find out before you pile on more work," says Hale. "Then decide whether to hire people to meet the growing demand. Often it's better to outsource specific pieces of the training and leverage your staff's skills internally."
Geography is also related to internal training capacity and is another factor you must consider. "Do you have people all over the globe?" Heiter asks. "What is the capacity to deliver the training and what is the need?"
3. Is the training proprietary? If it is, you will have trouble outsourcing it, says Rothwell. "It comes down to common sense in this case," he says. "If the information is key to your company's competitive strategy, it becomes a confidentiality problem."
Hale says it can also become an understanding problem. When training programs are proprietary, it boils down to matters of intimacy and intelligence—in other words, being in the know. "You need an intimate understanding of your company's programs, the political players and the people you can't tick off," she says. "How do you get through the maze of people to make things happen? That requires an intimate understanding of the company that's nearly impossible for someone outside the company to have. We tend to outsource things that can be thought of in a technical aspect, such as building a Web site, duplicating training materials or building graphics."
Heiter points out that an understanding of the company's culture is also critical to the success of many training programs. "There may be a certain procedure about how the company should handle performance issues, and the training will be more effective if it is delivered by someone who understands the culture," she says.
4. Does your company value its training organization? This may be the most important question of all. "For example, if I am in operations and have a training need, is my first thought to call the training department or my operations colleague who has used an external training solution?" Heiter says. "Whether the company really considers its training department proficient and capable will determine if training is kept in-house or outsourced."
5. Does the content change rapidly? In some cases, such as technology and compliance, the content changes so rapidly that it's better to hire outside experts to keep the training up to date. For example, Heiter specializes in virtual leadership and trains companies to manage outsourced employees. "The current thinking on virtual leadership in the global arena changes quickly because it's an emerging field," she says. "I get new ideas almost weekly and share them as an outsourced partner to my clients."
Hale says that it's often better to outsource technical training. "When you purchase a technology product, you always have a number of updates," she says. "When the training involves a great level of detail, it's cheaper to bring in the experts rather than taking time to train internal people on details that are going to change anyway." She recommends partnering with a vendor to get the most up-to-date information in a particular area.
It's also more cost-effective to outsource the harder skills, such as technology and compliance training. Outsourcing the softer skills can be much more difficult and political. "There is a competition between the internal training folks and the external training folks about softskills, such as leadership development and team building, because that's what the internal folks want to do," Hale says.
6. Are the outsourced trainers viewed as experts? And is that a good or a bad thing? The answers depend on the company's culture. "Are people from the outside considered experts, or are they viewed with cynicism or skepticism?" Heiter asks. "It's also a question of whether you can be a prophet in your own land. Depending on the company's culture, sometimes that's impossible."
Heiter has seen both outsourced trainers and internal trainers fail and succeed. "If training is outsourced, it's too easy for someone to say, 'That doesn't apply to me' because the person doesn't know the culture," she says. "I've also seen training given by the internal trainer, when the employee thinks, 'This is just another person from inside the company, so how could they know this better than me?' But I think a combination of the two works best."
7. Did you do your homework? "You must complete due diligence before you think about bringing in a training program that is in contrast to what's in-house," says Heiter. "Research first to find out what training you currently have and what you are doing in a certain area. For example, in the case of project management, you should bring in the people in charge of project management and have them pick out a training program. Then you can train their people. That's how you create a winning situation for everyone."
8. Are you handing over the entire training function? Although a growing number of companies over the last decade have outsourced parts or all of the learning functions, the experts say this isn't the best solution for most companies. "Companies are beginning to think that outsourcing may be a total plug-and-play solution from a consulting company," Rothwell says. "Sometimes I will hear a training professional make the comment, 'We are looking for a total outsourcing agent.' That is troublesome because it suggests that there will be no one in-house to work as a liaison to deal with the political issues of making the training stick."
Heiter is also seeing more overwhelmed and overloaded training professionals looking to outsource the entire learning function. "They just hand me the keys to the kingdom and tell me to call them if I need them," she says. "This is the wrong way to approach outsourcing. Like any project, you need to slow down to speed up, and determine who is going to own the program internally."
Hale says it's ironic that companies want to outsource the entire training function, because often they don't even have a handle on what that entails. "These training organizations have an illusion that they are the one and only training organization in the entire company, but they don't realize there a number of underground training departments within each business unit," she says.
9. Is there a hidden agenda? Outsourcing the training function can be a way for companies to pretend they're doing training and development when they really aren't. "By delegating training to someone else, the company is not accepting responsibility as an organization to build the bench strength of its people, and training simply becomes a window-dressing solution," Rothwell says. "A company can outsource training, but it can't outsource its responsibility for it. I fear that may be what is happening."
Rothwell also worries that executives have a hidden agenda when it comes to outsourcing. "These companies are trying to minimize training's impact," he says. "Executives at these companies don't like people interfering with the day-to-day work, so they think that if training and development is outsourced, it is out of sight and out of mind."
10. Have you considered a combination? In most cases the best training solution is when an internal consultant works with an external consultant. "It's troubling to see so many organizations do a total outsourcing of the training function. You need an internal person to do the leg work around the political issues to make the training work," says Rothwell. "The combination approach works best because the external consultant has more access to the executive level, but the internal consultant has the staying power to see the training project to the end."
Gail Johnson is the managing editor of Training. firstname.lastname@example.org