Here are Top 10 reasons why companies are currently choosing to source more of their training activities with external suppliers - even during a growing market.
It is cheaper for Organization to outsource training to training professionals when starting up as it is cheaper than designing and building it themselves.
For many companies, training is a necessity. But the development, management and delivery of training is a distraction. For companies that manage training everyday, it IS core to their business. And they are much better at it!
What a novel idea...use training as a way to make money! More and more companies are now recognizing that training is a source of revenue, and they have intellectual property that is valued in the market. So they use another company that knows how to market, sell and deliver training to a mass or targeted audience to create new revenues streams. Wondering if this is a good idea? Ask Microsoft, Cisco, and RedHat (just to name a few) if it makes sense to them.
Training helps prevent failures. It helps protect us from the liabilities of our company being sued if we don't provide the right training. Think about it this way – if we don't provide the training our employees or customers need, and when they need it, we're vulnerable to being sued if an injury or catastrophic failure occurs. So training reduces our risk. It’s easy to see that using a company who specializes in training could help prevent unneccesary failure costs. It sounds like insurance. Wonder which is cheaper in today's world?
Running an internal training organization requires people of various levels of skills and talent. Full-time internal staff is a fixed resource. But training is a variable activity. Using an external supplier allows you to flex the number of resources to deliver the training you need - when you need them. It allows your company to scale up and down based on the demand of training you need. Makes a lot of sense when your company is hiring a lot of people in a short period of time.
If your company is a software products company, it may be a good idea to source the marketing and delivery of your training to an established IT training company. The IT training industry is a mature channel market. Companies like Kaplan IT, Global Knowledge, Learning Tree, and New Horizons, have a powerful channel to IT professionals. Not only does sourcing this training through a channel partner make sense, it also may help drive new revenues.
Bringing a new product to market may be dependent on getting resellers trained on how to sell or service your product. Using a training outsourcing company may allow you to get your product into a lot of customers’ hands much faster, without scaling up internal resources.
When General Motors began manufacturing cars for the Chinese market, they needed to train local employees; repair technicians, sales agents, and many more within the Chinese market. It made a lot more sense for them to outsource training to a company who had resources in China and who understood the Chinese culture. It wouldn't have been feasible for GM to take U.S. employees to China for all this training. And it doesn't mean they have to use a Chinese company to do it. Just a company with local resources.
We've said it many times...no company has all the knowledge they need internally to be successful. Sometimes it’s necessary to hire an expert to teach internal employees how to do something that is new to their company. Yes, hiring an outside consultant to deliver a training course is considered outsourcing.
The number one reason why companies outsource training is to save money. It's the bottom line. It's the common denominator and culminating reason for all the other reasons mentioned above. We should never forget that how you manage training is always about how we manage costs.