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Outsourcing L&D: 10 Key Things to Remember

Bob Little 

November 11, 2016

The concept of “Lean” – doing more with less – has pervaded organizational thinking for years. Applying it has led organizations to employ fewer people – outsourcing jobs in the name of improving business efficiency while also reducing overhead costs.

This has affected the HR and L&D functions, as fewer workers come under their direct influence. In addition, some organizations – taking the concept of Lean to its ultimate position – outsource their entire HR and/or L&D functions.

Money isn’t everything, especially where people are concerned, but it can be more cost-effective to outsource all or part of the L&D function, rather than employing permanent trainers. And outsourcing can give your organization access to specialist knowledge and skills that don’t exist in-house

Furthermore, an outsourced HR/L&D provider’s independent advice and guidance can bring a fresh perspective to issues in your organization, which you can miss because you’re too close to them or because you have “accepted” them as insoluble and, thus, invisible.

Yet, in committing to this course of action, you should remember these 10 key things:

1. Choose your partner carefully

Even a small organization’s workforce requires a range of learning interventions – and these need to be sourced. So, in choosing an organization to provide a fully managed HR/L&D outsourcing service, review its buying power and supply management ability – since, to follow Lean principles and please your finance department, you’ll want to pay the most competitive rates.

You’ll also want a partner that can provide advice and guidance that will “add value” to your organization. So you need to team up with an organization that knows the market and understands current HR/L&D trends.

2. and then …

To make moving to – and running a fully outsourced HR/L&D service trouble-free, you’ll need to be extremely confident that your partner organization will never let you down. This is going to involve at least as much rigorous recruitment, selection and on-boarding activities with that organization as you’d normally undertake to find a new, key HR/L&D senior executive.

3. … be a real partner

Develop a close partnership with the organization that you’re contracting the work out to. In conjunction with it, develop systems and processes that make it very difficult – if not impossible – for people to notice any difference between an internal and an outsourced HR/L&D operation. This involves you and your partner organization agreeing on a competent account manager to be the link between you.

4. Your account manager

This account manager must understand your organization’s systems and processes, planning schedules, and corporate culture. He or she must also understand exactly what you want to achieve – and what needs to be measured to know whether this has happened.

5. Use the right learning management system (LMS)

It’s possible to at least get close to achieving this “seamlessness” in systems and processes by using an appropriate LMS. The outsourced organization must operate it efficiently and effectively and you need to use the LMS to produce the appropriate management reports.

6. Automation isn’t the whole answer

While automation is a great help – allowing people to do “more with less” – some HR/L&D tasks can’t be automated. So you’ll need someone, at least, to ensure that appropriate people attend appropriate programs – especially when these programs are changed at short notice.

7. Assess cost savings and business improvement

A major part of any outsourcing exercise is to save costs and, if possible, increase efficiency. A key part of this process is allowing you to focus on developing your business strategically. You need to be confident that this is happening.

8. Key answers

Ultimately, to determine the value of outsourcing any function, you need to be able to assert with complete confidence that the move has made your organization – and its people – more effective and efficient. Moreover, you need to know beyond doubt that it’s saving your organization money. You also need to be sure that its effects are being appropriately and correctly evaluated.

9. Key performance indicators (KPIs)

“Evaluation” is a key issue. Before you embark on an outsourcing strategy, know how you’re going to evaluate its effectiveness. This enables you to decide on suitable aims, goals and KPIsall of which should be agreed with the organization that you’re contracting the work out to.

10. Outsourcing doesn’t have to be “all or nothing”

You can keep some of the HR/L&D function in-house and outsource the rest. Some organizations, for example, don’t outsource L&D activities for senior staff. This gives you some control over your organization’s L&D operations, but it has to meet business efficiency and effectiveness criteria if you’re following Lean principles.

Moreover, as part of the selection process, you might agree a small-scale pilot study with a potential HR/L&D provider partner – to allow you to evaluate whether you can work with it, in terms of approach, content and delivery.

According to Jon Phillips, an HR professional who runs Caliam HR, “Outsourcing your HR requirements can bring reduced costs, improved efficiency, and direct access to the kind of expertise that a company may not have, be able to build, or even afford on a full-time basis internally.

One reason for outsourcing the HR function is that it helps to support and facilitate change. Whether the business is growing or streamlining its operations, how it handles its people and employment issues will go a long way towards determining its success.

Roger Mayo, director of the consultancy MT&D Learning Solutions, which looks after a number of organizations HR and L&D requirements, comments, “As a buyer of outsourced HR services, look for the added value that a new supplier can bring, combined with a pragmatism that matches your values and work practices.

Ensure regular reviews to ensure continued compliance with your needs and, if you’re pleased with the individual or team working on your behalf, make sure they don’t get substituted by those who’re less able.”

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