outsourced

Keeping on with my recent theme around the spare capacity of training venues being sold to the open market in the form of hotel rooms, my next question is: Have HR teams, particularly my friends in Learning and Development (L&D), finally struck a killer blow to the 4am ‘last man standing’ bar session. I am guilty like the best of us having made a pact with myself before dinner to be back in the room at 10pm to wade through the ‘homework’ for the following day. Then appear fresh as a spring bunny for the 8.30am start over coffee. But then your new best mate whether it is the marketing director or new sales executive, very seldom was it the boss (there’s a clue here), finds that inner self in you that has two pointy ears and glows bright red. Next thing you know its 4am, the barman has kicked you out and you’re on your zig zaggy way back to the ‘Stable block’. Research says that, normally people remember about 15% of training content 48 hours after its been delivered, throw a 4am’er in and your well on your way to zero. You can just about remember that you’re in the ‘Stable block’ or was it the ‘Boat house’ and that’s the morning after. Well this has been a bit of a ramble but necessary background to explain what I think is happening now. The L&D guys have got smart and used the current global crisis as a front to pave the way to cut interventions down to a one day ‘bite size’ , a coded way of saying no bar !. They have also elected to use the ‘on the job’ delivery technique so that the only bar you can sneak off to during the day is the Salad Bar in the canteen. As a leader of a managed training services business, I have to support the professionalism but are we missing some of that human, social interaction that is so important to forming high performing teams by banishing the 4am into history?

No matter who wins the next election there’s a certainty that the Public Sector will have to make significant savings. With the focus on maintaining so called ‘front line’ services, it will be the back office functions that will be in the sights of the Public Sector executives. From personal discussions, I’ve had with a number of local councils .The target is in the region of   5-7% annual reduction , which when compounded over 5 years yields a 30-35% saving target. This calls for radical rather than incremental intervention.

Take the current UK training and development sector, the back office ie administration and management of training accounts for over £5BN of the total £32BN plus annual spend. My best guess is that at least 50% of that is in the public sector ie £2.5BN to go after in terms of introducing efficiencies through Private Sector involvement. The amount outsourced today is a tiny fraction of this potential. There is a great opportunity for the Private Sector to introduce the concept of an Outsourced Managed Training Services provision. From my previous blogs, this can realise a 30-35% saving, so you would think job done!

My concern is that it’s not going to be straightforward though , there’s lots of Sacred Cows in the Public Sector such as: pensions, culture , protected areas such as child welfare and of course the Executives report into an array of committees , boards and politicians.

So I will be banging the drum of how the private L&D sector can help the public sector through 2010 and do our bit to if not reduce and least stem the Public Borrowing Requirement. I will keep you posted!

Continuing on the theme of why organisations should consider outsourcing training, my thought today is focused on getting decent management information out of your learning and development processes and systems. Can you answer the following questions?

• Do you know what the training gap (i.e. the current skill / achievement level versus desired state as defined by your Training Needs Analysis) is at the individual, team and companywide state for your business?
• If you know the answer can you determine the financial exposure / cost to fill the gap?
• Do you know when time bound qualifications (e.g. regulatory requirements) are about to expire and can you schedule training without causing disruption? 
• Can managers/HR easily access training records including hard copies of certificates and qualifications obtained from an employee’s previous employment and education?
• Are delegates registering themselves on a training course without an identified need either because they fancy 5 days out of the workplace or have an eye on career development for the ‘next job’ outside of your organisation. You only get to find out after the event?
• Are your courses running efficiently i.e. maximises class sizes , running in-house when the numbers make it effective and are you cancelling too many courses too late and incurring penalties.

If these questions have prompted concerns then it’s likely that your Training Management Information needs an overhaul, again we are happy to help!

There are lots of different views on what defines Outsourcing Training. The key however is allowing an organisation to focus on what it does best such as designing and manufacturing cars , flying aeroplanes or treating and saving patients to name a few.

Question:

What’s the first budget head to get the chop when recession begins to bite?

Answer:

Training.

Question:

Why?

Answer:

Because it’s often a fragmented, ineffective non-core activity that is viewed as a luxury, not a necessity.

Question: What is the alternative?

Answer:

Take a good look at outsourcing your training provision. Here are some of the reasons we think you should:

• The UK spends £33bn on training, of which just £2bn is spent on external training providers. There’s a lot of ‘hidden’ cost being spent by the organisation that’s difficult to measure .This means that massive amounts of money are spent on non-core activities.
• Airlines should concentrate on flying aeroplanes, car manufacturers should concentrate on making cars and widget manufacturers should concentrate on making widgets instead of running in-house training departments, when training is not their core skill.
• Outsourcing training and the management of that training leads to savings of up to 40% and a more focussed strategic approach to training management that measures training with direct benefits to the company’s bottom line.
• If your global training budget is devolved to departmental budgets then you are likely to have a fragmented and expensive inefficient training provision that is not aligned to corporate objectives and therefore wasteful – which is no doubt why you cut the training budget in the first place!
• Outsourcing the management of training across large and complex organisations has many bottom-line benefits, but perhaps the most significant is the training service provider/ outsourcer’s expertise in accessing Government funding for NVQ Levels 1,2, 2, and 3 qualifications that have a direct effect on corporate production and performance. This means that training is FREE!

Question:

What are you waiting for..?