Workforce Development

Training Facilities – Own, Lease, Rent, Or None of the Above?

When you think of the hot topics in training, what comes to mind? Technology, leadership, onboarding, knowledge transfer? What about facility management? It probably wasn’t at the top of your list, but it’s a critical component of training programmes.

The need for large, dedicated areas to conduct technical exercises, soft-skills role play and systems training represent a significant portion of training budgets. In fact, owning and operating a company training centre generally occupies about 23 percent of training costs. Without careful consideration and long-term planning, today’s “wise investment” and “valuable asset” may come to be viewed as a costly error in judgement down the road.

There are several widely-adopted operating models companies can choose from when selecting a training location:

  • A dedicated, branded training centre (owned or leased)
  • Dedicated space in a non-branded training facility (owned or leased)
  • Space reserved on a full-time basis in a shared facility with other organisations (owned or leased)
  • Acquiring space and resources on an as-needed basis

There is no universal right or wrong answer when it comes to buying, leasing or renting training space. A number of factors must be considered in order to determine the optimal solution for your organisation, including –

  • Ratio of soft skill to technical training programmes. It goes without saying that organisations need to have a clear understanding of their training needs –including how they break down in terms of soft skills versus hard skills. One of the challenges companies face when it comes to soft skills training is accurately predicting volume. If volume drops off, then a company could completely dispense with owned/leased training facilities. Hotels and conference centres could suffice as training locales. When it comes to more technical training programmes, however, such as hands on training for engineers, a dedicated training space becomes more critical to the overall efficiency and effectiveness of the training.
  • Branding. Organizers need to assure training is appropriately branded – right down to the banners hanging in the lobby. Those that lease or rent space need to ensure that the contracted facility and its team are able to uphold the company’s quality standards and appropriately reflect their brand. In fact, because many dedicated training facilities are able to maximize through-put and efficiency, they are able to provide enhancements and branding benefits beyond what an OEM would be able to build for itself.
  • Learning Blend and Class Size. When determining training space needs, it is crucial to consider how the learning blend might evolve over time. Today, about 70 percent of training is conducted in person, but this industry norm is far from stable. Since its arrival, digital distance learning has become ever more convenient, widely available and popular, and its rise shows no signs of slowing. Digital options are attractive because they allow trainees to learn at their own convenience and pace. Advances in technology are driving down the cost of even complex simulations, making them a more feasible option in many industries.
  • Utilization and Cost. Based on 18 years of experience running over 80 training centres, we have observed most are utilized between 172 and 180 days per year as a result of public holidays, seasonal shut-down and natural low training periods. The rising popularity of distance learning is also destined to impact future training centre capacity requirements. A small shift in class size can dramatically alter the amount of space required, as does the projected annual size of the trainable population. Each of these are critical elements in developing an organisation’s training strategy.

Organisations must fully explore all options before committing to a strategy. Long-term planning and a careful evaluation of all variables are essential to maximizing the return on your training investment.

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