The Business of Learning

Professional Development Makes a Comeback in 2013; But What’s in Store for 2014?

From guest blogger Gary Bragar, HR Outsourcing Research Director at NelsonHall 

NelsonHall research has shown Learning Services to be the slowest human resources Business Process Outsourced service line to recover from the recession. But this past year, Learning Business Process Outsourcing (LBPO) saw a resurgence, with its highest growth rate since 2007. This is significant, signaling that companies are at last shifting from a “hunker down” mentality, toward reinvesting in their human assets.

This is just one of the themes in LBPO that emerged in 2013. Here’s a look at what’s coming in 2014 and beyond:

  1. Government organizations topped the list of LBPO consumers in 2013, followed by manufacturing and high technology. The private sector has experienced strong growth in LBPO demand since 2010. Energy, healthcare, and financial services, which have been increasing their demand for outsourced learning services, are expected to continue on this trajectory through 2017. Future market growth is also expected to be driven by the retail and manufacturing sectors.
  2. Content development overtook learning administration as the largest LBPO service line in terms of vendor revenue. One of the primary drivers of three percent market growth in content in 2013 was the conversion of instructor-led training (ILT) programs to e-learning and virtual instructor-led training (VLT) programs. E-learning now accounts for approximately 55 percent of total training delivery and is expected to grow to 60% by 2015; blended learning programs now account for a full two-thirds of delivery. This trend will continue in the foreseeable future.
  3. Learning strategy and other consulting services grew, as clients sought help incorporating learning into their overall talent and performance management strategy. Clients also allocated budget for social learning — seeking out LBPO vendors to provide collaborative technology. In the near future, clients will also seek help to monitor and measure the effectiveness of their social learning programs.
  4. Full LBPO contracts have increased since mid-2012—as clients have sought to obtain the most value possible from their vendor relationships. Though selective LBPO contracts, i.e. those comprising learning administration and just one or two service lines, continue to outpace comprehensive LBPO contracts that address all learning towers (strategy, administration, content development, delivery and technology), we predict full LBPO contracts will continue its resurgence. Growth in comprehensive LBPO is attributed to clients reinvesting in learning who are hesitant to rebuild their internal learning organizations again and will outsource a larger share, if not all, of their learning needs to a specialist.
  5. Last year saw LBPO adoption increase internationally. Notably, Raytheon Professional Services (RPS) was awarded an LBPO contract with an automotive company in Korea for content development, training administration and delivery of sales and non‐technical training. Significant cross-national LBPO contracts were awarded by an energy company in Austria, a multinational pharma and biologics company in the U.K., a global bank with learning deployed in the U.S, Canada, U.K. and Hong Kong, and an oil and gas company in Canada, which doubled its scope in 2013. We expect international LBPO contracts to continue strong growth in 2014 and beyond.

Bottom line, we see healthy growth in LBPO over the coming years, led by the conversion to e-learning programs, caution by clients regarding rebuild of training staff, and international contract growth.

Do you have plans to work with learning specialists outside your company?

Gary is the HR Outsourcing Research Director at NelsonHall where he has global responsibility for HRO. Gary joined NelsonHall in April 2007 after gaining extensive HR management experience at AT&T.  In this key role, Gary assists both buy-side and vendor organizations in assessing the opportunities and supplier capability across HRO, including for learning, recruitment, payroll, benefits, and multi-process HRO. Gary recently completed an industry-leading analysis of opportunities and vendor capability in Learning BPO.

In his last job assignment at AT&T, Gary was a member of the AT&T governance team responsible for managing the service delivery of AT&T’s major Human Resources and Payroll services BPO contract with Aon Human Capital Services. Gary helped forge the strong partnership and as such AT&T and Aon were selected as “HRO Relationship of the Year”.  Gary’s prior operational experience at AT&T included: Learning, Recruiting, Benefits Administration, Compensation, HR Transformation, HRIT and Employee Programs for AT&T International. In Learning Gary performed content development and delivery of AT&T Bell Laboratories quality curriculum. Gary is also an adjunct Professor having taught part-time in the Business Department at Bloomfield College, NJ for 17 years. Gary is certified as an online instructor and delivered courses using classroom, online and blended delivery.

Gary has published numerous articles, conducted numerous webcasts and presented at many conferences in the U.S. and Europe including co-presenting with Raytheon in Amsterdam on the benefits of Learning BPO.

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