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Literature Review about Training Outsourcing

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Literature Review about Training Outsourcing Training Outsourcing has become a very popular amongst the training cycles during the last decade. A recent study appearing in Fortune Magazine (May, 2004) showed that outsourcing among U.S. companies is up 50% from four years ago and growing 15%-20% annually. Top functions for outsourcing include payroll, HR management, customer service, call centres, technology, and now corporate training. In a 2003 survey conducted by research firm IDC training emerged as the number one candidate for outsourcing. 1 Outsourcing is defined as the assignment of a business process to an external provider. Thus outsourcing providers have been called Business Process Outsourcing (BPO). However outsourcing should be differentiated from outasking where the latter means assignment of certain tasks only to outside providers. It is worth at this point analysing the advantages and disadvantages of outsourcing. Outsourcing providers and academic writers seem to agree on the fact that the major advantages of outsourcing are short term, i.e. cost cutting and long term i.e. freeing up time for strategic decisions. Nearly 48% of outsourcing decisions are made to reduce operational costs. The reason why outsourcing providers offer services at a reduced cost is that the outsourcing firm performs the same function on a much larger scale and therefore has more efficiencies and experience in a particular function. ...read more.


BP struck a deal with exult in 1999 which was in charge of most of BP's HR processes leaving only strategic decisions to BP. The key ingredients of the success are maintenance of control by BP and a relationship based on trust between BP and Exult. 4 Apart from private organisations outsourcing has been adopted by many public sector organisations. Countries like the United Kingdom and Australia already have gained considerable experience and reaped many benefits. Outsourcing has its special advantages for public sector organisations can bring in advantages. Specialised software that could not be developed internally due to high cost provides employees with a more convenient service and frees up time for focusing on the learning and development strategy. It can also provide with data that was unavailable before which informs HR decisions. However, it is suggested that they should not blindly follow the paradigm of private sector when choosing to outsource some of their services. Many elements must be taken into consideration, including political climate, unions, local economies, employment situation, and the investments required and available. In conclusion training outsourcing if it is managed well can bring many benefits to the organisation including cost cutting, access to expertise and enabling focus on strategic work. ...read more.


Furthermore the diverse needs for training of staff could not be covered by those four trainers only. It has been decided therefore to utilise external training providers. The Learning and Development Department has put a tender to a number of training providers and has ended with a preferred supplier list with which special rates have been agreed for different types of courses. The Professional Development Unit has its own preferred supplier list. Access to expertise then was the main driver for outsourcing. Refer to literature review Discussion Recommendations Outsourcing can be utilised more smartly to free up time for strategic decisions. Work closely with managers to train them on appraisals and training needs analysis. Create a learning organisation. Organisation going through major restructuring. Training and Development Manager primarily involved. Opportunity to devote more time if outsourcing works well. Administration use of a more sophisticated information database that enables staff to book courses online, fill in training needs questionnaire and generally be responsible for their own learning. Conclusion 250 words 1 Ousourced Learning makes its Mark Development and Learning Organisations. Vol. 18, No 4, 2004, pp. 28-31 2 Outsourcing Training is 'in' Will It Work for You? Managing Training and Development Jan 04 Vol 4 Issue 1, p.4 3 Garry De Rose & Janet McLaughlin Outsourcing Through Partnerships Training & Development , October 1995 4 BP's HR Outsourcing success: can it work for you? Human Resource Management Vol 12 No 3 2004, pp. 5-7 ...read more.

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