Traditionally, outsourcing learning and development functions has meant selecting an isolated function of a business, cutting it loose and finding a more cost-effective delivery vehicle for the function. These functions have historically existed on the periphery of most organisations and have been viewed as being a cost rather than contributors to organisational success. Justification for outsourcing usually clothes itself in the dress and style of cost. The number crunching makes sense, outsourcing is far cheaper and learning and development becomes someone else`s headache. Apart from weighing up the costs of providing the service through the organisation against the cost of bringing in a service provider, there are other cost issues that are more proactive checks and balances in weighing up the worth of outsourcing. This article will explore two issues central to outsourcing training and development:
1. Factors other than cost that should be relevant in deciding to outsource or not 2. What to look for in a service provider
Three case studies drawn from the experience of Learning Resources will be used to illustrate the practical application of the issues relevant to the key elements that should be sought in choosing a service provider. The three organisations are Sun City Resort, the Automobile Association of South Africa (AA) and the Health and Racquet Club (H&RC).
Factors as important as cost
1. Moving into the new economy
The terms "Old Economy" and "New Economy" are regularly bandied about, and it is not the intention of this article to provide expositions thereof, but global trends speak of drastic changes in the perception and operation of economic constructs. Simplistically, this boils down to the fact that the "bricks", or assets, of the old economy are fast crumbling to the "clicks", or intellectual capital, of the new economy. The implication here is that whoever manages to acquire, process and deliver information and knowledge as a commodity will thrive and gain competitive edge in the emerging economy. The converse is that whoever does not, will be left in the dust. The question of cost is, can you afford not to be an investor in the commodity of information and knowledge acquisition?
In judging the worth of a service provider it is vital to consider the capability to deliver the latest best practise thinking available on a global scale. The rate at which new paradigms become available is seldom matched by the rate at which learning and development practitioners deliver the paradigms into the workplace. An effective and efficient provider will have active and solidly forged partnerships with global learning content providers. Find out from a prospective outsourcing provider, with whom partnerships have been forged, and in what the state of health the partnership exists. Mandy de Goede, General Manager HR&D at the AA, sees the value of this in saying, "The immediate access to new thinking is a big plus to me considering that rate at which knowledge becomes defunct in today`s fast changing world of development."
2. Compliance with legislation
Employment Equity and the Skills Development Act have brought employee advancement into the spotlight. Organisations are fast acknowledging that these issues have to be satisfied, and the enlightened see the benefits and opportunities of the new legislation. The cost factor that cannot not be ignored here is that these acts have been formulated specifically to increase productivity of the South African workforce, and nobody can afford to ignore this when the world is fast becoming an economic village and competition ever fiercer as a result.
First and foremost, the provider must exhibit a full understanding of the interrelationship between the two acts. They are inextricably interwoven. Secondly, the provider must be able to articulate, and, more importantly, show evidence of ability to link learning and development to both equity and the National Qualifications Framework. Learning content should be mapped to the NQF requirements and relevant to the needs of executing equity within the organisation. Here we are talking the language of succession planning, quality assurance, outcomes based learning, curriculated learning, personal development planning, workplace skills planning, skills development facilitation the list goes on. The bottom line is that the organisation must understand what its needs are in terms of the acts and ensure that these align with both the capabilities of the provider and the learning products on offer.
3. Repositioning specialisation
Traditionally, in-house learning and development centres have employed trainers for very specific sets of knowledge, skills and abilities. As new learning and development needs arise, organisations tend to employ new trainers, bring in external trainers or send employees on external or formal training courses. All of these are costly. The latter two involve external sets of learning that very often have limited applicability within the cultural context and operations of the organisation. In other words the on-the-job worth of the learning is often a hit and miss process.
A wide bouquet of customisable learning programmes that allows several variations on a theme would be a wise acquisition. Generally, one should look for a provider who can deliver learning programmes that develop generic competences. This sounds fairly simple, but how do you quantify this? Work on the premise that eighty percent of all learning requirements are generic to almost any organisation and twenty percent of learning is company specific. With the generic learning and core skills in place, the rollout of company specific learning becomes so much simpler. It is very important to establish that the provider has employees who adopt the position that they are facilitators rather than subject specialists. Subject specialisation is important, but secondary to having core generic facilitation skills around which learning content rotates. Specialisation, if any at all, is of far more value if it rests in the macrocosm of education, legislation, project management, performance consulting, and change management. These are but a few of the skills required. Companies offering outsourced learning and development solutions have to own this intellectual capital to survive where one-off service providers and in-house staff do not.
4. Variable learning mixes
Another cost factor to consider in deciding whether to outsource or not is to examine what learning mixes are being offered at present within the learning and development sector. By far the most common delivery platform for learning is the classroom. Debating relative costs and values of different delivery vehicles is not the objective here, but it is well known that classroom interventions are costly and that technology based learning solutions are relatively cheap by comparison. But, the situation becomes more complex when one brings adult learning styles and preferences to the table. Although everything can be drilled down to a rands and cents value, ensure that the quality indicators are in place.
An understanding of adult learning underpins a good, variable learning mix. The value and quality of global partnerships with learning content providers will facilitate catering for almost every possible learning style and preference. A product range including video, multimedia, CBT, text, classroom, self-paced activity packs and on-line learning, to name but a few, should be a key consideration in entering into an outsourcing contract. The idea is to be able to cater for auditory, visual and kinaesthetic learning styles and the learning preferences of the theorist, the activist, the pragmatist and the reflector. It is a well-acknowledged opinion that where these styles and preferences are closely matched to the medium of delivery, greater retention of learning naturally occurs. A basic bonus in this process is that learners learn how to learn. Obviously, technology bears a key role in this. Sun City has subscribed to almost the total bouquet that Learning Resources has on offer. The project is nine months old and has over 900 learners registered on various courses. The centre is run by a staff of five, is open for 65 hours per week and provides in excess of 450 learning hours per week. Effectively, this means that staff members are delivering 90 hours of learning in their 40-hour week. How? Through the learning mixes mentioned above with a strong technology based learning focus.
5. Change and flexibility
Here is a direct cost for a change! When negotiating an outsourced deal one has to consider the fact that learning and development is directly linked to business needs. Business needs are dynamic, not static and strategy is a living tool. Given this, it is important to bear in mind that learning and development needs are also subject to constant revision, redirection and reselection. Altering course midstream is a reality and if flexibility is not an option, then money goes directly down the tubes.
Firstly, look for a one-stop-shop operation. Change becomes extremely difficult to implement, never mind manage, when there is more than one service provider onboard. Secondly, look for a long-term partner in the game. A provider prepared to look beyond immediate needs and partner you in your execution of strategy, not only willing but able to embrace dynamic change, is the ideal.
6. Quality assurance
Ensuring quality is also a cost issue in the medium term. Outsourcing learning and development should raise many questions surrounding quality and that does not simply mean the quality of the learning interventions on offer. Quality, in the medium and long term, relates to the provider`s accountability and relevance in terms of return on investment.
The provider must demonstrate clear and physical evidence of project management techniques to measure expectations against delivery. Service level agreements ensure clear accountability and delivery and are an absolute requirement. This is essentially the first step to quality control. The subsets will relate to the quality of execution of learning deliverables. These subsets should at least incorporate measurement of the quality of learning delivery, quality of learning, quality of learning transfer to the workplace and the quality of performance effect. Above all, some form of external quality assurance should be in place. In all of Learning Resources` projects, for example, external quality assurance is offered on ABET programmes both from the IEB and MediaWorks - the learning content provider. Harvard Business School provides us with external certification of their management development programmes. Sun City and Learning Resources, both client and provider respectively, have benefited by having this external assurance in place.
7. Collaborative relationships
All too often, what occurs in client-consultant relationships is that the consultant delivers an impressive (and costly) package that nobody knows how to use! Traditionally, in client-consultant relationships the expertise is seen to lie with the consultant who dominates the relationship as a consequence. The consultant traditionally maintains the status of an outsider who operates externally to the culture of the client`s business. Striking the wrong relationship at the outset can be costly.
It is preferable to have a service provider prepared to take the time doing audits and getting to grips with the culture of the organisation. The service provider should make every effort to become a business partner in the process, entering the bloodstream and living and breathing the business of the client. A collaborative approach far outweighs dictated expertise in value. Plans for operational rollout of the outsourced learning and development process should show evidence of enrolling the support and co-operation of internal stakeholders that will encourage ownership of the process. Outsourced solutions are, if you like, in-house solutions that operate within and from the context of the corporate culture.
8. Repositioning learning and development
In the opening paragraph reference was made to the fact that learning and development often co-exists with other business units in the organisation at best, and most commonly lives on the periphery of the business. This is a central reason for learning and development being the stepchild of the organisation, perceived to be a drain on finances and showing very little in the way of making a difference. All too often employees attend training with little visible result in the workplace in the long term.
Training should not be the objective of outsourced learning and development projects, it is but a part of the solution offered. The whole solution is a total integration of training and development into a performance framework. In other words, the service provider should show evidence of strategy to take learning and development back into the core of business and gauge its worth by return on investment factors, with measurable increased performance as the first stop on the road of proof. If you are thinking of outsourcing learning and development, align with world-class best practise and ensure that your delivery vehicle situates its tactical strategy within a solid performance framework.
Performance should be the focus of interest, not training. The point of departure for an outsourced learning and development project should be operationally oriented towards the translation of strategic goal into learning goals and the cascading of these throughout the organisation. Your service provider should be asking you questions about strategy and performance needs, not training needs, and should show a capability to transfer learning to the workplace. On-the-job assessments, coaching and mentoring systems and alignment and integration with performance management systems are the measures of value you should be looking for.
The outsourced project at the AA has utilised the Balanced Scorecard to drive strategy and align learning needs in terms of performance deliverables, which support strategic objectives. The Health and Racquet Club is moving towards a client-centric approach geared towards long-term customer relationship management. Given this strategic performance need, it was decided that the first destination should be to develop a more conscious management process. In other words the learning intervention was derived from strategy and formulated in terms of performance needs. At Sun City a strong culture of learning has been established and this is now being centred in a performance framework with the co-operation of Sun City staff. HR and Learning Resources staff members have bonded as a solid team. Learning and development is being carried into the arena of performance through the use of skills assessments, personal development plans, learning paths and on-the-job assessments. Both learning and the transfer of learning are becoming focal points of performance appraisals. With this development, performance is emerging as both the driver and result of learning and development. Performance, in turn, is sturdily mapped to, and driven by, strategic goals.
Should you outsource learning and development?
Ask yourself the following:
- Is your training department moving you into the new economy?
- Is your training department delivering the objectives of the new legislation?
- Is your training department operating on the 80/20 model of learning and development needs?
- Is your training department offering adequate learning mixes and maximising efficiency through technology?
- Is your training department responsive to the supply and demand principle related to change processes?
- Is your training department utilising quality assurance processes and justifying its worth in the organisation in terms of return on investment?
- Is your training department a collaborator in driving the business objectives of the organisation?
- Is your training department performance focussed?
If you are coming up with consistent negatives, then you should strongly be considering outsourcing the learning and development function. Remember training does not drive profit, but performance surely does.
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