Preparing to Learn Again in 2010
The headline of an article in yesterday’s USA Today read, “Economy is growing, but job market remains soft’”. While this isn’t happy news for those still out of work, it bodes well and is a bellwether for companies – and those employed by companies – that place a premium on developing the skills of their existing staff, as well as for providers of outsourced learning services.
As economic fears begin to ease, albeit modestly, I predict buyer demand for outsourced learning will heat up for several key reasons:
• Organizations know they must invest in developing existing talent they want to retain – for example, as I wrote about in a blog last year, approximately 50 percent of employed Americans plan to look for new opportunities when the economy begins to turn around, and dissatisfaction with their current jobs and lack of clear career path opportunities are contributing factors
• Although job growth is slow to come, unemployment has stabilized, and monthly job reductions are nowhere as severe as a year ago and will return to growth. As a result, organizations must be prepared to train new hires
• 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
The outsourced learning vendor community is providing indicators of preparation for growth. For example, on December 30, 2009, Sagard Capital Partners, L.P. completed a $20 million investment in General Physics (GP) Strategies, a global learning provider, signaling not only confidence in GP Strategies as a company but also a resurgence in learning services as organizations begin to again invest in their people. And on January 4, 2010, GP Strategies acquired PerformTech, Inc., an eLearning provider of custom training solutions, including content development to U.S. government agencies. As eLearning accounts for more than 50 percent of all learning today given organizations’ need to control costs, this was a highly strategic acquisition for GP Strategies. An indicator of the strength of the eLearning market comes from Edvantage Group, an eLearning provider based in Norway, which recently announced it surpassed one million course completions in 2009.
Based on the inherent benefits to buyers, and increased capabilities and retooled pricing models of providers, I believe we will see solid growth in outsourced learning through 2013. And those buyers and providers making the investment now will be thankful they did…and so will their employees.
Gary Bragar, Lead HRO Analyst, NelsonHall
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