C H E T N A C O N S U L T A N C Y SE R V I C E S

How your organization can benefit from

outsourcing its training activities

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C H E T N A C O N S U L T A N C Y SE R V I C E S

The Training Function in a

growth economy
Outsourcing training to improve the productivity of your training
department.

T
raining & learning are the tools that can create a long term competitive
advantage for your business or organization. Try to think of it as R&D for
your most critical resource –“people”. Training and learning are what
differentiates the quality of your knowledge worker, which in turn differentiates your
service or product in an increasingly competitive market place. Training and Learning
can help organizations achieve breakthrough thinking, be compliant in an increasingly
sophisticated regulatory environment. If done properly Training and Learning can
enhance top line growth through higher productivity, lower costs by managing
attrition. If done in an improper manner, it can do nothing to improve productivity,
manage attrition and add no value to an organization.

Training & Learning are expensive functions, with outlays running into large amounts

for many organizations; and in most organizations the metrics for measuring training
effectiveness are incomplete if not absent altogether. Most organizations prefer to
develop an in-house training function - this means many times hiring team members
for a perceived or a current requirement and keeping the training team employed even
when the training need is met or it lapses or the budgetary allocations to it need to be
reduced. An ‘in-house’ training function also imposes “softer” costs due to continual up
gradation of people and training content, license fees of software and training material
and cost of trainer attrition.

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C H E T N A C O N S U L T A N C Y SE R V I C E S

How to create a “win-win” situation for your

organization

Organizations now are using a unique approach to provide these

functions internally by Outsourcing their training departments. This they
have found is a way that reduces costs improves productivity and
relives them from the need of constant up gradation. Handing over
your organizations training function over to “experts” in many ways
also improves the quality of training. These experts have a lot of
advantages; they are constantly upgrading themselves to differentiate
themselves from the competition and add value to their clients, by virtue of the
multiple clients they serve - they have an upfront feel of the best industry practices;
training costs can be tracked more objectively and can help align your trainings with
your strategic objectives in a far better manner.

Does your organization need to “outsource” it’s

training

N
o two organizations are alike ! Then how do you decide if what works for
your supplier, competitor or client will also work for you? Even though
there is no way to answer this question with a simple yes or a no, there are
some trends that you should watch out for. And if you can spot these in your
organization, then perhaps you should consider outsourcing:

• An increasing budgetary outlay to training &

learning and the need to establish its value to
stakeholders. In the absence of clear tracking of
costs and metrics to determine effectiveness of
training – there is no way to determine if you are
getting the “best bang for your buck”.

With increase in budgetary outlays the importance of determining

spending effectiveness increases. With an expert coming in the costs are
easily tracked and ROI can be objectively measured and ineffective service
providers can be weeded out easily

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 • An ever-widening plethora of training services
making it difficult to choose the “right” training for
your organization. With almost every successful book
author or a retiring CEO becoming a trainer or a public speaker – not to
mention a new management theory or “fad” every week; it is easy to get
swept away and take on a training without judging its fitment to your
organization. An expert not only executes your training function for you,
but is also in a better position to advise you on the merits and de-merits of
a training program keeping in mind your organizational interests.

• High attrition rate and employee dissatisfaction

in the training function. A trainer is by nature a
very creative person and likes a variety of
experiences that come from diverse audiences,
situations and programs. An in-house trainer often attrites due to creative
stagnation-doing the same program in similar settings over and over again or
handling the administrative tasks of training like vendor management etc.
Many training departments are also fairly small and flat providing limited
career growth. An expert is able to attract the best talent as they provide
diversity of experiences, and a more robust career growth than in an ‘in-
house’ training function.

• An erratic and client driven high growth in early-

stage organizations. Most organizations, especially
in the growth phase tend to be very lean and grow
only by adding more clients. In such a scenario it is
not possible to maintain adequate bench strength- as a new
client or project might just mean staffing up by as much as one third your
current strength in three months or less. In such businesses the lower the
capital outlays and idle expenditure the better are the returns for the
stakeholder. It is far more advisable to rent out the services of an expert
rather than create an ‘in house’ training team and incur idle costs while you
wait for clients to roll in.

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Options in outsourcing training
Depending on your organizational requirements, you can decide to completely
outsource or choose from a bouquet of services that many training organizations offer:

Obsolesence Strategy
Management Development Training
Needs
Technology Analysis
Management
Content
Vendor Development
Management
Training
Delivery

Onboarding Reporting &

Management Logistics Measurement
Management

Your Organization Your Organization can choose from this bouquet of

can choose to activities to outsource one or more activities to one or
outsource all tasks more training partners. A scenario where you choose to
or selectively outsource training delivery, content development and
outsource some of on boarding management to a vendor, while retaining
them. control on the other activities.
‘In House’ Activities Outsourced Activities
Content
Development
Training
Delivery Onboarding
Vendor Management
Management
Logistics
Reporting & Management
Measurement
Obsolesence
Management
Technology
Management Training Needs
Analysis
Strategy
Development

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Benefits of outsourcing training

The benefits of Outsourcing training in your organization can accrue in a variety of

ways. For many organizations outsourcing the training function is not only the key to
meeting the objective of organizational learning and training, but also to overcome the
administrative and structural barriers with in-house training. In Outsourcing, it is the
onus of the vendor to provide training material, invest in infrastructure, maintain and
upgrade technology & content, reduce costs and improve processes.

Lower training costs: It is estimated that on an average companies can save up to

20% per trained employee by outsourcing training For a 1000 employee location with
an average training spend of Rs5000 per employee and an attrition rate of 20%. The
training cost is projected at Rs 6 million annually. Outsourcing training per 1000
employee location, you could save up to Rs 1.2 million annually. Across a 3000-
employee location and at current rates of outsourcing the savings could go up to Rs 4
million annually. These savings accrue from lower capital expenditure, lower idle time
per employee, process improvement and higher employee productivity. This comes
about due to a higher level of & more consistent training across the organization.

Organizational Effort is focused on core competencies: Administrative tasks follow

the 80-20 rule for your training department; they take up almost 80% of your training
teams time but impact their productivity to the organization by only 20%. In many
cases, a disproportionately large focus on these activities also becomes a cause of
attrition of your key training talent. Outsourcing the non-key activities for your training
department helps it to focus on performance related training and coaching for your
key talent when it is needed. Few, if any training teams have the time, resources or
energy to focus on this “classroom of one”.

Eliminating redundancies from legacy systems: As

Organizations grow, merge, spin-off they tend to become
decentralized, disaggregated and fragmented. While key functions
get their due during the process of Organizational Evolution, more
often than not, functions like training & administration end up
being burdened by inefficient legacy practices and systems. Training
Programs, Infrastructure and positions get duplicated many times over. This is costly
and inefficient and results in inconsistent levels of serving, works against sharing of
services and stalls the implementation of a consistent strategic vision for learning. It is
more efficient to have centralization via a proxy like a training partner.

Training Content @ the speed of thought: As Businesses, your clients and especially
your competition move at the “speed of Thought” How can your organization, your
employees and their skills & learning not move at the same pace. Training departments
need now more than ever to keep abreast of the latest regulatory environment,
technical skills and competencies that your organization needs to operate in now, and

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in the future. Outsourcing to training experts not only helps you operate in the “now”
environment but also lets you operate in a predictive manner in the training space.
Experts keep up to speed on the latest in their operational domain, much like you and
many times are at the cutting edge of research. Not to mention the eagles’ eye view
they have of the marketplace and a frontline experience across your and other industry
verticals.

Getting Started

The decision to outsource is determined by a

number of factors unique to your company, your
stakeholders, your business environment and your
product and service offerings. Some Organizations
may outsource only training delivery while some may outsource only
content creation. The service could be one or a combination of many and
the training partners could be one or many per function per business unit.
It is best to select and constantly evolve to a model that fits your
organization.

T
raining is critical in today’s growth economy and its impact on
productivity , attrition, top line and bottom line is well known. However,
with the possibility of outsourcing it, it need not be seen as function that
isn’t strategic with immeasurable costs and objectives. Realizing the
benefits of a well designed, targeted and measurable training function is
now easier than ever. We at Chetna Consultancy Services can both
enhance and leverage the value of learning and enable “Business Progression
Through People Development”

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 About Us

Chetna Consultancy Services is an India based consulting organization with

a knowledge center in New Delhi providing Corporate and Institutional
Services training.

We offer a bouquet of services for company, market and industry; Training

Need Analysis; Development of Training Strategy; Training Content Creation;
Enhancing Training Content; Training Delivery; Training Reporting and
Management and Assessment services.

Our customized work consists of project based assignments and turn-key solutions in
the areas of: Client Culture Sensitization: Valuing Diversity; Communication Skills:
Verbal Skills – Voice and Accent; Using Neuro Linguist Programming; Effective
functioning in a professional work environment; Neuro-Linguistics in the work place;
Leadership Essentials; Team Building Skills; Customer Relationship Management;
Train the Trainer; Counseling and Feedback skills; Interviewing Skills

Business Progression Through People Development

An ISO 9001:2000 certified organization

For more information write to us at:

devyani@chetna.co.in, rohit@chetna.co.in

Visit us at: www.chetnacs.com

A-39, Naraina Industrial Area, Phase II

New Delhi 110028

Contact us: 011-4141-7675, 011-4100-0521

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is prohibited. This report has been prepared by Chetna Consultancy Services and/or one of it’s
affiliates This information has been compiled or arrived at from sources believed to be reliable in
good faith, but no representation or warranty, express or implied, is made as to their accuracy,
completeness and correctness. The information and opinions in the report constitute a judgment
as on that date and are subject to change without notice.