In-house vs. outsourced employee training strategy: What model’s made for you?

Designing an effective employee training program is important for a number of reasons. It gives employees the skills they need to make your business a success. It boosts retention by showing employees you value them and are actively committed to their development. And it speaks to your branding and employer value proposition. Which, in turn, helps with talent acquisition and the future stability of your organization.

But when it comes to an employee training strategy, there’s no one-size-fits-all approach. The good news is there are more than enough options available to design an approach that’s right for you. The challenge is knowing what ones to choose.

In this guide, we focus on the pros and cons of in-house and outsourced employee training. If you’ve already got an employee training strategy in place, use it to benchmark and guide your next steps. If you’re looking to create one now, use it to make the right decisions from the start.

What does employee training look like?

In the broadest sense, an employee training strategy can be divided into two distinct types: In-house training and outsourced training. There are variations and subtleties within this theme.

For example, the term ‘in-house’ training can be slightly misleading because in-house training can take place in an external location. Similarly, content can be created in-house or not.

But for the purposes of this guide, we’re focusing on the two main models: in-house and outsourced training. Each one comes with its own list of benefits and challenges.

Let’s take a look at them.

In-house employee training strategy

As its name implies, in-house training is a form of corporate learning and development that’s managed and delivered by employees within a company, using company resources. It covers anything from onboarding and mandatory, company-wide training to professional development programs, on-the-job coaching, and skills-based tuition.

Companies that deliver their own in-house training usually (not always!) have a formal team in situ to oversee and take ownership. Using their skills, subject matter experts within the organization, and the relevant tools and technologies, they create their own courses and resources to keep training on track.

The advantages of in-house training

• Timing: Scheduling (and re-scheduling) training to fit in with employees’ ever-changing routines and responsibilities is easier if you’re managing it yourself. As is blending L&D into day-to-day jobs.
• Agility: With full control of processes, it’s often quicker and easier to modify internal training programs when business and training needs change.
• Understanding: Who better to design training that meets your specific requirements, goals, market positioning, and branding than your own people?
• Motivation: When your employees invest time and energy into delivering and developing their own personalized training program, they have a stronger reason to see it succeed.
• Customization: Small details make a big difference. In-house training can address requirements at a local level, individualize learning paths, and quickly adapt to any changes in demand.
• Confidentiality: To provide bespoke training means having access to strategic planning information, internal targets, and company objectives. Keeping proprietary data secure is a risk when using an external company.
• Control: If you have to communicate a vision to a third party, sometimes the meaning gets lost in translation. Retaining ownership of training in-house makes it easier to stay true to original intentions.
• Branding: Your training program says a lot about your company. To deliver a clear message, it should have your name all over it and not another company’s. With in-house training, you can define what it looks like and how it’s delivered.
• Commitment: Having a dedicated L&D team boosts your employee value proposition. It sends out a strong message to your people that their development is your priority and worth investing in.
• Cost: In-house training’s a long-term investment. To run effectively, there will be set-up costs involved. But once these are in place, the ongoing financial commitment can be a lot lower compared to paying a third-party provider. With affordable, out-of-the-box, training platforms readily available, companies don’t need to hire developers, designers, or dedicated trainers. Using the right toolkit, effective courses can be created in-house with very little demand on internal teams.

The disadvantages of in-house training

Simple practicalities may mean in-house training isn’t right for every business. Depending on the size of your organization (too small or too large), there may not be the budget or resources to make it work.

There are other disadvantages too. Perception is one. Some employees may view internal training as less credible, which can lead to lower completion or attendance rates. There’s also a risk of training becoming stale or outdated if resources aren’t reviewed and refreshed. This can result in low engagement levels, and a potential deskilling of your workforce.

Confining learning to the knowledge base of just one company can be limiting too. Without the fresh ideas or networking opportunities that external training can bring, innovation, creativity, and confidence can take a hit. And, with it, your business’s ability to stay competitive.

Outsourced employee training strategy

Also known as managed learning, an outsourced employee training strategy is where companies use an external partner to design and run internal L&D programs, processes, and activities. In most cases, the arrangement is long-term, with the third party assuming complete and ongoing control over all training.

That said, some companies outsource training on an ad-hoc basis to address specific peaks in demand. Examples of this might include periods of significant organizational change, a major new product launch, or high-volume recruitment.

The advantages of outsourced training

• Expertise: Training’s an art that requires a specific set of skills. In-house trainers may know their subject, but lack the ability to communicate that knowledge effectively. Qualified experts with a background in the profession have the confidence and skills to consistently deliver compelling courses. They can also advise on employee training strategy and best practices, and recommend new training technologies and methodologies.
• Scalability: In-house training requires an ongoing commitment that some organizations simply don’t need. With outsourced L&D, businesses can dip in and out as circumstances change.
• Immersive technologies: Using a good training platform, organizations can create their own digitally optimized L&D programs. That said, emerging technology solutions, such as augmented reality (AR) and virtual reality (VR), are (at the moment!) typically more readily available from an outside provider.
• Speed: With a contract in place and reputation at stake (plus no internal hoops to jump through), turnaround time for designing and developing training programs is often faster using outsourced L&D.
• Reach: Managing L&D in-house is harder if you have dispersed teams (particularly without the help of a Learning Management System). With more resources, contacts, and specialist tools to hand, external providers are often better placed to coordinate distance learning.
• Industry insights: Focused purely on training, outsourced educators come with up-to-date knowledge of the industry. Using this, they can apply insights, trends, ideas, and developments to course content and design to keep it fresh and relevant.
• Recruitment and retention: Professional development is one of the main drivers of employee engagement. And one of the reasons employees stay with or join a company. An official qualification from an outside organization holds more weight than a course completed internally.
• Cost: Depending on the scale of your training needs, outsourced training can be more cost-effective and easier to control because it’s only used when you need it.

The disadvantages of outsourced training

Time can be a major stumbling block when it comes to using an outsourced employee training strategy. An external provider won’t be familiar with your projects, goals, services, and business model. To get up to speed, the onboarding process requires an investment on both sides to share and absorb relevant information.

And even when that’s done, a potential disconnect can still exist.

Time zones, conflicting priorities, internal processes, and different levels of awareness all mean that collaboration with outsourced trainers is often less seamless than with internal teams. This can lead to a mismatch between what’s requested and what’s delivered. And more time wasted.

Finally, there’s remit. External providers may not be able to provide the range of training programs required or specific courses relevant to your business.

Ask 10 questions first

There are so many different variables (time, company size, levels of resources, budget, and training type and content ) to consider when making a decision about what training model to choose. And, because of this, only you can judge what’s right for your business at any given time. But here’s where having a list of pertinent questions helps.

You can focus your decision-making by asking the following 10 questions:

1. What’s the scale of my training requirement? How many people do I need to train, and how often?
2. Are my training requirements likely to change significantly in the near future?
3. Are there any significant events that might influence my training strategy?
4. What training topics do I need to include in my program? Do I have in-house experts in these subject areas? Are there off-the-shelf courses or training resources I can buy in for some or all of these topics?
5. What’s my budget? Is this fixed or dependent on need?
6. Do I have the resources (space, skills, infrastructure) in place to develop and deliver the training in-house? How regularly will I be able to review and refresh content and design?
7. Will an outside training organization add value?
8. Do I have employees available who are qualified trainers? If not, are there benefits to hiring or training someone to do that job?
9. How many remote workers do I have? Am I resourced to manage their training needs myself?
10. What technology is available to help me deliver in-house training?

A blended approach: The best of both worlds

Depending on the answers to your questions, one model may stand out as a strong match. But there’s a good chance your ideal program will emerge as a mix of both in-house and outsourced employee training strategy.

This blended approach may be less easy to organize. But it’s likely to be more effective and affordable in the long run. Either way, once you’ve decided, the process doesn’t stop there.

To keep pace with your business model, you need to keep asking questions. And keep track of technology. A full-featured eLearning training platform with rich integrations can give in-house learning the edge. And as immersive technologies become more mainstream, training tech could well be your deciding factor.