Learning Outsourcing: Smart Companies Preparing for Competitive Advantage Post-Recession

A recurring theme in a variety of our more recent blogs is an expectation of increased HRO activity in 2010 and beyond for a range of HR processes. This uptick – yes, just uptick, not monumental increase – is evidenced by smart organizations’ preparation for competitive post- (or edging toward post) recession stance.

Take learning outsourcing. A recent Workforce Management magazine article, in which the soon to be released results from a joint Bersin & Associates/Workforce Management study of more than 1,400 U.S.-based organizations were discussed, found that nearly four in 10 large companies outsourced learning support functions to compensate for staff cuts.

NelsonHall’s 3Q09 HRO Confidence Index found that pipeline growth for outsourced learning increased from 2.3 on a scale of 1 – 5 in Q1 to 4.0 in Q2. Why this up-swell in outsourced learning, despite dreary near-term economic conditions? Let’s remember that learning was one of the faster growing areas of HRO with a strong list of benefits, including:

•  Ability to focus on the critical importance of developing high potential employees and leadership with the reality of significantly reduced in-house training staff

•  Reduced training expenses, ranging from 10 to 15 percent for administration-only outsourcing contracts to 30 to 50 percent for full learning BPO arrangements utilizing offshore content development and/or administrative resources

•  Increased visibility and control over learning spend

•  Improved learning evaluation and measurement through access to learning analytics and customized reporting facilities

•  Reduced time to competency in jobs with high turnover

•  Ability to deliver global learning programs at a lower cost through established provider networks

•  Ability to more effectively track and integrate both formal and informal learning networks

•  Improved post-training support and analysis, e.g., evaluations three months after course events, and mentoring programs for new employees

The new Bersin/Workforce Management study indicates that training student hours, budgets and staffs were all cut during the downturn. As companies prepare to return training to the forefront, they are unlikely to return to the previous levels of spend and staff in the near term due to continued uncertainty. Learning outsourcing can help bridge the gap and bring its own advantages, as noted above, to buyer organizations.

Gary Bragar, Lead HRO Analyst, NelsonHall

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