Friday, September 10, 2010

Two different views

It's brutal in the job market and ain't so great for those that provide services either. I believe that the job loss in workplace learning will not recover, never, ever. Organizations will look to outside resources (like me) to get the work done project style. This will require different skill sets for those in the corporate side in managing program, projects and contracts. That's my theory.

From the September 2010 Training + Development Intelligence// story, As Future Brightens for Job Seekers, Disturbing Trends Emerge for Trainers, hiring will increase. However, only 11% of respondents described their HR and L&D functions as industry leading.  This is a tremendous lack of confidence in the internal resources in training and developing new hires.  From the September 2010 CLO Magazine, Cushing Anderson in Business Intelligence, When, Why and What to Outsource, we learn that training outsourcing is overall declining. However, when organizations outsource, they outsource "important" functions. For 2011,  81% of companies will hold steady or increase outsource spending. Those outsourced functions are: custom content design, development; training delivery; learning strategy development with program oversight; technology management and reporting and measurement.

The message for me is that internal providers must build credibility and deliver results. If not, there continues to be a willingness to buy.


  1. Interesting stats, Don. In my experience, hiring of internal staff always seems to lag contract/outsource hiring during a recovery. Then at some point companies decide the business climate is good and it's more economical to hire 'permanent' staff.

  2. Don:
    I believe you are right. And it is not just workplace learning where this is happening. Corporations are outsourcing all manner of internal services.

    Although the intentions might be noble, the new healthcare mandates on corporations are economically brutal. For every employee you maintain or hire, the cost per employee is expected to exceed $20K per year and could top $30K. In my own small company healthcare costs are going up by 50% for FY2011. In this economic environment this is a debilitating burden on all businesses both small and large.

    The next great wave of outsourcing is predicted to be offshore outsourcing. You will begin to see many "corporate" functions outsourced to India, China and elsewhere. Home Depot has already taken those steps and has placed many accounting functions offshore in Asia. The same will occur in Training and Development. So companies like ours will not even have a chance to compete for that business.

    The next step after that will be to relocate corporate HQs entirely to regulatory-friendly countries like Ireland and Dubai. That could leave the US as a third-world economic power.

    The simple truth is that these unintended consequences of healthcare reform are KILLING business in our country.


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