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Outsourcing Training Development vs. In-House Training

11 minutes
Outsourcing Training Development

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Many businesses recognize the inherent value of employee training. That’s why a substantial portion of their budgets are spent on employee training and development. But what if you don’t have a dedicated training department? Perhaps your business has diverse training needs, only needs a short-term program, or simply lacks the software expertise to develop training materials. In these cases, instead of internal training, companies often opt for the most obvious solution: shelling out a small fortune to outsource training and development.

As a matter of fact, according to Statista, a whopping 45% of US corporations outsource learning. In this article, we’re going to discuss why many opt for external versus in-housing training solutions. But first, let’s take a closer look at what outsourcing truly entails.

What Does It Mean to Outsource Training?

Generally speaking, training outsourcing is the business strategy whereby a company hires or contracts an external supplier for the management of training tasks and/or activities. There are 3 main models of outsourcing:

Business Process Outsourcing (BPO) 

This is the most complicated method of outsourcing due to the level of external involvement in managing multiple processes, which inherently involves higher risk. BPO can be divided into 2 categories: Comprehensive and Selective.

Comprehensive BPO covers the full spectrum of training processes. This is when a company, let’s say a regional clothing chain, passes all the functional areas of training – administration, content, delivery, and technology – to an external provider.

Selective BPO, on the other hand, is more “selective” regarding the degree of involvement. Here, the third-party supplier manages the processes either across at least two of the four functional areas mentioned above or from all four functional areas, but for a limited scope. In this case, a regional clothing chain will pass on all the processes connected with the compliance training, ranging from administration to technology selection, to an outside vendor and provide sales or customer service training in-house. 


Contracting is the most commonly used method of outsourcing, especially due to its low-risk nature. A company contracts with an external supplier, specifically delineating what tasks they are to perform, at a set price. Contractual terms typically involve the use of labor on an hourly, daily, weekly, monthly, or annual basis. You can think of it as the “hiring” of a skilled professional(s) without the typical cost-benefits of an employer-employee relationship. Example: A regional clothing chain engages an instructional designer to develop courseware for a new training program. 


Licensing is by far the fastest and easiest way to outsource training. In this method, you simply buy the right to access another’s intellectual property. Of course, the major downside of this is ensuring a perfect, one-to-one correlation between the content and your unique business needs. 

Why Companies Outsource Employee Training

Now that you know what and how companies choose to outsource, it’s worth taking a closer look at why they’re doing it.

  • There are no training professionals in a team who can develop a training program and pass the knowledge to the staff members. Besides, it’s not essential to hire a learning officer because you’re going to provide short-term learning rather than training your employees on a regular basis. 
  • The training needs are too diverse and you don’t need enough resources in your company to cover them all. Let’s say your staff consists of a marketing team, IT staff, customer service representatives, and sales professionals, and all the departments require different kinds of training. In such cases, externally sourcing the right instructional design and subject matter experts might be the only viable option.
  • Your organization is small and there’s no person who has both professional and technological expertise required to execute an effective training program. To keep up to date, you need to develop online training using novel technology. That very thought alone is enough to drive businesses to outsource.
  • Employee training is essential, but if you’re not already a training or L&D company, then developing, managing, and delivering training often distract from core business activities and cause time constraints. As such, many businesses outsource to get the job done without causing any delays or interruptions to regular business operations.

While outsourcing might be ideal for some businesses, in most cases, it’s a quick fix with long-term repercussions. In doing so, you’re essentially placing your employee training, as well as the future of your business, in another’s hands. But who could be more intimately familiar with your company’s vision, mission, values, and needs than you and your staff?

A somewhat short-term strategy, outsourcing will help you get the job done without delaying or detracting from regular operations. But ultimately, in the long term, developing your own training solution in-house can help you view the big picture and infuse all your needs into a single strategy.

Why Companies Choose In-House Training Development

At the outset, in-house training might seem like work; work that would amount to additional costs in the form of time, money, and interruptions to core business operations. But this might be a short-sighted take on developing an internal training solution. Let’s see why.

1. In-house training is considerably cheaper 

Time is money, and since you’re already paying your full-time staff for their time, you might as well leverage it to develop employee training. On the other hand, when you outsource learning and development, you have to pay for third-party services in addition to your regular staff. This quickly adds up. That’s why, now more than ever, employers are desperate for a cost-effective solution that still delivers quality, productivity, and positive results.

2. It’s easier to align your training strategy with your business goals

Imagine having a vivid vision of an abstract painting you’d like to create. You’re not a painter, but you know exactly what you’d like it to look like, and you don’t want any deviations from your desired end goal. How easy do you think it would be to communicate these abstract ideas to an outsider, so they could recreate your exact vision?

The dilemmas you’re bound to run into with your painting will mirror the issues you’d have communicating your training needs to “an outsider.” While third-party training companies do conduct training needs analysis (TNAs) to determine your learning objectives, nobody understands your business better than you and people working for your company. By outsourcing content development, you risk getting a very “generic” course or even materials that will center on something that’s not relevant to your specific needs. By developing content in-house, you take full control of your learning, thereby making it easier to align your strategy with your business goals.

3. Content created in-house amounts to a better learning and user experience 

Who better to create the solution than the person or party with the problem? The intricate level of detail and intimate familiarity that your company has with their training needs means that they’re best qualified to determine how to close the knowledge gaps and deliver the content. For example, you’re best acquainted with the educational background, tech-savviness, and general lifestyles of your employees in each department. This consideration might be the difference between developing microlearning content for staff who are regularly on the go, versus self-paced courses for those who stay closer to the office. Moreover, your staff’s relative comfort with technology could define the choice of developing minimal to high degrees of learning interactions.

The approach you use to develop and deliver your content ultimately boils down to the user experience it affords, and how it aligns with your employees’ professional and personal needs.

4. With modern eLearning authoring tools, creating training content is fast and easy even for non-professionals

eLearning continues to gain ground in workplace training. Not only does its flexibility minimize business interruptions and costs associated with travel time, but it provides a myriad of ways to enhance employee engagement and effectiveness. For example, according to a well-cited statistic, for every $1 invested into eLearning, employees delivered an equivalent of $30 in productivity. 

With all that said, what are the costs associated with eLearning development? As you’d imagine, they’re quite high if you outsource them, but the eLearning industry has inundated the market with top-notch tools that do most of the heavy lifting for you. Modern authoring tools allow you to create eLearning courses that are compatible with learning management systems (LMSs). After you upload your courses to an LMS and assign them to your employees, you can keep track of how the content is viewed and what results your learners have. 

As a matter of fact, if you outsource a developer, chances are they’d be using the exact same authoring software anyway. But not all tools are created equal. Some of them require a particular skill set and are accessible only for experienced course developers. But there are also some easy-to-use yet fully functional tools that anyone can use.

A great example of a simple and intuitive tool for building eLearning courses is iSpring Suite. If you’ve ever used PowerPoint, then you have all the know-how you need to use iSpring, as it operates through the PowerPoint interface. But you’re not just limited to text and images, as with PowerPoint. With iSpring, you can effortlessly create interactive slides with quizzes, screencasts, talking head videos, narration, and even branched dialogue simulations. No course building experience or design knowledge are required. You can assemble professional-looking courses quickly with ready-made slide templates – simply choose slides that fit your learning scenario, complete them with texts and images, and your course is ready to go!

Check out this demo of a course created with iSpring Suite.

5.  Content created in-house can be effortlessly updated as needed

Ideally, your business is growing and continuously seeking ways to improve policies and processes. You’re therefore bound to make updates or perhaps even last-minute changes to accommodate these upgrades. Let’s say you just released a new product and want to add a couple of new slides with the overview of its features to your old product knowledge course. This process is a much bigger hassle when you’re dealing with outsourced training companies, rather than working with internal staff that’s already familiar with navigating the eLearning authoring tool of choice.

By cutting out the “middle man” and having direct access to the authoring tool, you can make changes on the fly without delays from contractors, who are likely to charge an additional fee for an update.

To Sum Up

Every company is in the business of training their employees, but not every business is a training company. As such, outsourcing employee training might seem to be the only logical solution. But whether you’re working with a contractor, licensing content, or business process outsourcing, you do a disservice to yourself in the long term. When explaining your training needs to a third-party training company, certain aspects get lost in translation, which often creates incongruences between the training content, method of delivery, and learning objectives.

The overwhelming majority of US businesses are experiencing the immense benefits of online employee training. Instead of hiring instructors or facilitators, all you need to select is the right eLearning authoring tool to create your content and a learning management system to deliver it to trainees. Not only will you save a ton of money, but you’ll increase productivity and revenue by having more control over your content.

Are you going to create eLearning courses in-house? Then build professional, high-quality, and engaging content in any format you’d like with iSpring; it does the brunt of the legwork for you. Try out iSpring Suite now, credit-card and commitment free!

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