Outsourcing is a business practice in which a company hires another company or an individual to perform tasks, handle operations that are previously done by a company’s employees. Training outsourcing is the business strategy for which a company utilizes an external supplier for the management of training activities. By opting to outsource training, the company can have the job functions done outside a company instead of having an in-house department.
There are thousands of companies that choose to outsource part or all of their training, manufacturing and other needs to third-party companies.
Apple (For Production) – Apple’s relationship with Chinese manufacturing firm Foxconn is widely known. While it is almost undeniable that Apple would not be able to sell its products at a reasonable price. The company has been criticized for having most of its production done abroad rather than at home.
Nike (For Production) – Sportswear giant Nike outsources the production of all its footwear to various overseas manufacturing plants. China has a bigger share of Nike manufacturing plants than in other countries.
Outsourcing has become a big trend in human resources. In fact, it has brought down one of the several challenges of HR department. There are several reasons why a company may choose to outsource certain business functions.
Reasons Why companies outsource training in today’s market
1. Reduce costs
Firstly, companies outsource training to save money and reduce costs. Hiring a third party can be a cost-saving. It can be very effective to find another supplier who already has a base class and that can be customized to fit your needs.
2. Access to talent
Secondly, the most strategic way to source the best training talent at its best possible price is to outsource.
3. Improve the expand-ability of Resources
Thirdly, running an internal training department takes several people with different skills and talents. When you work with a training outsource company, you can expand or contract the number of resources you need.
4. Lower Labor Cost
Fourthly, the company has its reasons for doing outsourcing. By searching for a global talent pool, it is easier to find the right talent at the right price.
5. Fresh Perspective
Moreover, When we continuously use in-house programs for training, we often use the same approach which can get old very quickly for participants. By outsourcing training, you can get a new and fresh perspective with different faces doing the training.
6. Competitive Spirit
Furthermore, it develops a competitive spirit among existing staff as they will have to compete with the outsiders for promotions. They will work harder to show better performance.
Through outsourcing, you will be sure that you have someone who knows all of the new features and applications.
7. Geographic Reach
When General Motors began manufacturing cars for the Chinese market, they needed to train local employees, repair technicians, etc. It made a lot more sense for them to outsource training to a company that had resources in China and who understand Chinese culture.
8. Flex Resources
Also, most companies only have a fixed number of people in the training department. So by outsourcing, you can allow those resources to do what they do best without pulling them in and out as the demand increases and decreases.
9. Speed to Market
Planning to launch a new product in the market? If you are planning to bring a new product to the market then your success may be dependent on getting resellers trained on how to sell your product. When you outsource this training to a third party, you can quickly get your product in customers’ hands.
Do you know the invaluable art of sales?
10. No Need for More Employees
When you outsource, you can pay your help as a contractor. This allows you to avoid bringing an employee into the company which saves your money on everything.
11. Leverage Channel Relationships
If your company is a software products company, it may be a good idea to source the marketing and delivery of your training to an established IT training company.
There are several new companies in the market today. Being new, amateur and comparatively less known, these new companies have a lot to take care of. Even established companies often do not like to indulge directly in things like Employee Trainings, Selection of employees for appraisal, etc. Now, can you guess – Why Corporate Outsource Its Training Requirement?
Conclusively, each organization should make its own decision regarding what is best for its budget and needs. It is important to understand that just like everything else, outsourcing has its positives and negatives. Therefore, before deciding to outsource, consider determining what the return on investment is.
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