Outsourcing training department

proofs that it is possible
In-house and outsourcing business models are already well-established concepts in marketing. Outsourcing is when you partly or fully let the external contractor work instead of you, while in-house means completing all the marketing tasks by your own efforts.

Giving your work to a third-party is becoming a common practice. You can hire outsourcing PR, or development departments (for example, if there is no WordPress developer in the company or LMS manager, it may be done by a contractor). Often, recruitment tasks may be performed by an external HR department.

The same goes with the training department in the company. You can organize training for employees within the company, or you can launch and conduct training with the help of contractors.

Let's see how it works and what the common pros and cons of the outsourcing training department/agencies are.

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Pros

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02
Cons, but how to fix it

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01
Pros
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Saving money, time, expertise

Here will be some numbers we took from our experience with Russian companies, so you might find some mentions of “rubles” and a local tax. You can apply this number to your realities as well.

Very often you can find a vacancy for a business coach with a monthly salary of 60,000 RUB (~750 USD) on Russian hiring websites. Sometimes the job description does not match this modest sum, since it often includes duties that are possible to complete if you work in a group of at least 3 persons. In this case, either part of the work will not be closed, or the quality of the future training will be affected.

Let's calculate how much it would cost to launch a training department within the company. Let’s say the average salary of the Head of the department would be around 120,000 rubles. Let's add here a T&D specialist (the average salary on a popular hiring website is 80,000 rubles) and a methodologist (60,000 rubles). Here we do not take into account fees for a producer for recording courses, a project manager, renting a studio, or preparing materials (design, proofreader).

So, in the first month, your payroll is 260,000 RUB. Let's add tax up to 43% (we're talking about Russia). In total we have:

371,000 RUB for the first month of work (plus the cost of hiring these employees). For three months, employees get acquainted with the industry. In the third month, they begin to build a training system, attracting contractors with an additional budget. Let's say you're the lucky one who has all 3 employees successfully passed a probationary period and doesn't have to lose money on rehiring.

On average, you can start training in a company from scratch in 4-6 months (if you already have recorded courses, pre-training diagnostics, IDP, etc.).

371,000 RUB x 8 (2 months to “get into the topic”: understand the company’s industry, find experts who are well versed in the topic, study the market; 6 months to build a training system) = 2,968,000 RUB. This is the minimum cost of building a training department hoping that the employees you hire will have all the skills described in the resume and will not leave in a few months.

The cost of the agency’s work, of course, will depend on your needs, and the price may vary, but if you compare cost, time, and expertise, it is often much more profitable to hire an outsourcing agency.

Also, such agencies often have discounts for external evaluations, video recording studios, and training.
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Obtaining a wide range of tools

In general, a fully-fledged training department's responsibilities include building a product-based training system, a notification system, a Knowledge base, and a soft skills development system. It is almost impossible for one employee to have deep expertise and experience in all areas. For each direction, you will need a specialist.

Imagine you need to develop a notification system. You need the skills of conducting in-depth interviews, communication analysis, and software patterns design. Or to implement a 360-degree assessment method, you need an employee who knows exactly this methodology.

The strong side of a third-party educational agency here is the ability to introduce exactly those specialists whose skills are needed to implement a particular task.

If you want to record a course for a product, an agency can hire a producer and a methodologist who will talk to your expert and wrap content in the desired format by the purpose of training, the age of employees, the specifics of the industry, the tone of voice of the company.

Or, to develop leadership skills for managers, they will look for a soft skills specialist who will be able to conduct pre-training diagnostics and select a training course based on identified needs and weaknesses.

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Speeding up launch dates

If you want to create your own training department involving your experts, you need to set the priorities, since the working time of full-time employees is limited to 8 working hours a day. It might take quite a time to manage all the launching processes.

On the other hand, the outsourcing agency can quickly dive into the topic thanks to their a set of competencies, and experience working with clients from different industries. Usually, these skills allow them to launch a training system approximately in 6 months.

The agency can introduce additional specialists and simultaneously implement several projects for one client (also while respecting an 8-hour working day). Specialists can record a product course, set up an information system, a Knowledge base, and pre-training diagnostics. It will save employees at least 2 months of usual training.

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Cons and how it can be fixed
Everything seems good so far. However, nothing is as perfect, and there are certain disadvantages of working with an outsourcing training agency.
The agency does not know the specifics of the work, so will not be able to build a training course for the company

Yes, there is a 99.9% chance that the agency will not have the expertise that your line manager has. That is why the agency must involve experts from your company and conduct a series of interviews with them when developing a training course. Also, it is important to agree on final materials together with customers.

Except for the above, the training method will be the same no matter the work field — dry building mixtures company or IT start-up.

Moreover, it is difficult to control the agency, and not always clear whether everything is going according to plan. Otherwise, we might get unsatisfactory results in 6 months.
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Always set and record KPIs by which you will evaluate the quality of the agency's work
It is not always possible to measure KPI with a certain amount of money. But you can set KPI by paying attention to the compliance with the deadlines, the level of NPS of trained employees, or their average score in testing. It is better to discuss KPI at the stage of signing the contract unless you want to wave your fists after a fight.
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Always ask to split large projects into smaller parts, with indicating deadlines
So that you have points by which you can check what has been done. Not in six months, but every month. You can share a task manager that you are using with the agency or create the usual Gantt chart in Excel, where all the stages of work, deadlines, and responsibilities on both sides will be scheduled.
The agency cannot stay forever at the company and after the end of the project you still have to hire a person

You can ask the agency to help you select a specialist with the necessary competencies and transfer an already configured training system to him. Or they can find a person from your company who wants to grow in a new direction and transfer him to the training department.

You can negotiate with the agency for subscription services in the future.

In general, if you want to open a training department in a company:

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calculate the labor and financial costs;
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evaluate temporary resources;
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evaluate your own competencies in employee training (to control the result);
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communicate with candidates and agencies and make a choice that is right for you.

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To answer the initial question, we can certainly say that outsourcing the training department is possible. It helps companies not only find the right specialists for their needs but save money and time on launching the training program.


The main thing while using outsourcing services is to establish all the processes of interaction with the external team at the beginning and set all the metrics that give an understanding of your performance success.