Training and Development

To Outsource or Not to Outsource…

Why do Firms Outsource?

Classic "make-or-buy" business decision.

Develop a modularization strategy for the business.

Subsidiary is politically, culturally, and/or geographically distant from home nation.

In-house

Pros

Company culture specific

Customizable

Retaining important information

Cons

Costly

Time consuming

Knowledge

Outsource

Pros

Expert knowledge

Improve Scalability of Resources

Speed to Market 

Reduce Fixed Costs

Cons

Risk of revealing company trade secrets

Communication difficulties

Loss of control

Conclusions

10 Questions to consider: (Johnson, Gail, 2004)

1. What are the capabilities of your training organization? Do you hire it or grow it?

2. What's your internal training capacity?

3. Is the training proprietary?

4. Does your company value its training organization?

5. Does the content change rapidly?

6. Are the outsourced trainers viewed as experts? And is that a good or a badthing?

7. (Did you do your homework?)

8. Are you handing over the entire training function?

9. Is there a hidden agenda?

10. Have you considered a combination?

References

Johnson, and Gail, (2004). To Outsource Or Not to Outsource...That Is The Question. Training, 41(8), pp.26-29.

Shih, H. and Chiang, Y. (2011). Exploring the effectiveness of outsourcing recruiting and training activities, and the prospector strategy's moderating effect. The International Journal of Human Resource Management, 22(1), pp.163-180.

Mol, M. J. and Brewster, C. (2014), The Outsourcing Strategy of Local and Multinational Firms: A Supply Base Perspective. Global Strategy Journal, 4: 20–34. doi: 10.1111/j.2042-5805.2013.01070.x

Anderson, C. (2008). Training Outsourcing on the Decline. Chief Learning Officer, September.

Crumpton, M. (2011). Making the case for in‐house training.Bottom Line: Mg Lib Finances, 24(3), pp.167-172.

Trainingindustry.com, (2014). 10 Reasons Companies are Outsourcing Training in Today's Market. [online] Available at: https://www.trainingindustry.com/blog/blog-entries/10-reasons-companies-are-outsourcing-training.aspx [Accessed 21 Nov. 2014].