Learning and development (L&D) is increasingly being recognised as a key driver for UK businesses’ recovery from the downturn, suggests research by Thales Training & Consultancy.

Bob North, General Manager, Thales Training & Consultancy, claims however: “While it is clear that most businesses consider L&D as a key driver for their performance, the ‘two-tier state’ clearly indicates that only a minority are taking full advantage of their potential outsourcing L&D capabilities.

The report explores the important role that outsourcing of L&D plays, finding that 82% of businesses have opted to use a third party expert to deliver their workforce’s training needs as effectively as possible. However, the research also discovers a growing divide – or ‘two-tier state’ – in businesses’ ambitions when it comes to outsourcing L&D.

The ‘two-tier state’ is identified as more than two-thirds (68%) of businesses have opted for ‘low-level outsourcing’, only outsourcing the basic elements of their training delivery model; only 21% of businesses have adopted a ‘high-level outsourcing’ approach, outsourcing high-value functions such as learning management systems and training administration. Critically, there is a clear link between L&D investment and business success: those respondents that ranked their overall business performance as ‘considerably better’ than expected in the last 12 months also increased their investment in L&D by 6.2%.

Thales UK’s ‘Outsourcing Learning & Development’ research was undertaken by Loudhouse, an independent consultancy based in the UK, during March 2010. Interviews were conducted with 200 L&D professionals in organisations of at least 1,000+ employees. The research explored the different aspects of outsourcing L&D and how it is being used to drive efficiency, talent management and business performance. Key findings include:

• Outsourcing innovation: only a fifth of businesses are exploring more innovative ‘high-level outsourcing’ of L&D functions, including; training administration (20%), training strategy (20%) and learning management systems (20%);
• The long-haul investment: 73% of businesses consider cost to be the greatest barrier to L&D outsourcing. However, these businesses recognised that short-term investment could produce long-term cost savings and efficiencies;
• Window of opportunity: 89% of businesses are open to the possibility that outsourcing could improve the effectiveness of their L&D functions in the future.

Bob North, General Manager, Thales Training & Consultancy, explains: “While it is clear that most businesses consider L&D as a key driver for their performance, the ‘two-tier state’ clearly indicates that only a minority are taking full advantage of their potential outsourcing L&D capabilities.

“The main difference is that ‘lower-tier’ businesses are taking a traditional approach to outsourcing, usually to gain specific expertise that does not exist within their organisation. ‘Higher- tier’ businesses are making the most of this expertise, as well as other strategic services that offer the flexibility and management information that is often crucial to the success of their L&D function.”