Effective employee training can make the difference between a mediocre or failed company and a stellar organization.
3D_generator / iStock / Getty Images Plus
The American economy is increasingly service-based, meaning that human capital is the most important resource a company has at its disposal—rather than factories and equipment—to create value for the marketplace. So, hiring top talent and effectively training talent from within is of utmost importance.
Most companies have some form of internal training and employee development program in place, but some also incorporate external training resources. Both have their pros and cons, which, with input from industry experts, we’ll discuss here.
1. Cost
Cost is one of the most obvious reasons many companies avoid hiring outside resources to conduct employee training. Why not utilize staff already on the payroll?
Still, employers should keep in mind the cost of internal training, which could include employing full-time training personnel or taking valuable time away from internal subject matter experts.
2. New Perspectives and Expertise
What can sometimes be a drawback of internal trainers is that they are, well, internal. For example, when internal staff members train others on changes in the industry, those internal staff members will inevitably have their perspectives colored by their experiences within the organization that both trainer and trainee work for, meaning they might be missing out on nuances of the external environment.
After all, the fact that a company is offering training on emerging trends in the first place suggests the organization recognizes it isn’t as up to date as it could be. In this case, it might make sense to bring in someone with external perspective and expertise.
3. Company-Specific? Industry-Specific? Or General Skills?
The type of skills or information being imparted to trainees also matters. If the training is focused on company-specific processes or procedures, it makes more sense to have someone internal give the training. That is especially true if the training may involve knowledge on proprietary information or trade secrets.
For example, Bethany Babcock, Founder and CEO of Foresite Commercial Real Estate, says her organization made the decision to build internal training resources specifically because of the niche aspect of her business within the industry and the lack of available alternatives.
On the other end of the spectrum are general skills that are applicable to any company in any industry. “If the training is more general and not industry[-] or company[-]specific, I would bring in external trainers,” says Strategy and Marketing Consultant, Per Ohstrom.
“Examples could be export compliance training, personality traits, or communication skills. In this case the company benefits from the rich experience of the instructor, who can use examples and cases from other companies,” he adds.
Somewhere in the middle of this spectrum are skills that are industry-specific but not necessarily company-specific. This could include technical information applicable to electrical engineers or new compliance requirements for financial institutions. Whether or not an internal or external trainer would be most appropriate depends to a large extent on the current aptitude of the organization in these areas.
If the company has well-versed staff and is trying to get new or more junior staff up to date, then internal trainers might suffice. If, as discussed above, the company finds it is falling behind as an organization on industry trends, it may want to look outside.
4. Sensitive Topics and Relationships
The sensitivity of the subject of the training should be considered, as well as the dynamics of the trainer/trainee relationship. For example, many companies favor external trainers for providing training to top executives. It can be awkward for both trainer and trainee when relatively low-level staff members are asked to instruct company leadership on any topic.
The trainers might hold back, afraid to be seen as “talking down” to top executives on whom their success in the company may depend. And the executives may perceive a lack of credibility on the part of staff who work several management layers below themselves.
Similarly, when training any level of the organization on sensitive topics, it can help to have an external resource engaged. “Issues, such as workplace civility, sexual harassment, or other management issues, may be much better suited for external resources because the topics are more sensitive and require subject and delivery experts who can bring credibility and expertise,” says George Washington University Business Professor and Training and HR consultant Deb Cohen.
This may be especially true if the company has had problems in the past with such issues and if there is a trust gap in the organization.
5. Fit
As we can see, there are pros and cons of both internal and external training, and ultimately, Cohen says companies must consider what the best fit is for a given situation. For example, the same community bank might find it makes the most sense to use internal staff to train new hires on the bank’s approach to customer service and relationship building while bringing in external industry experts to educate staff at all levels on the business impacts of new state and federal banking regulations.
It’s important to note that cost shouldn’t be an element in the “fit” factor. The fact that Option A costs more than Option B doesn’t really impact whether Option A is the better fit for a training need. This doesn’t mean that cost isn’t important, just that it should be weighed against the fit, which needs to be considered independently of cost concerns.
Ultimately, a company might decide to opt for internal versus external training for cost reasons even if it recognizes that the external option is the better fit in an ideal world with unlimited financial resources.
The time, effort, and resources put into employee training can pay off significantly when that training is done correctly—whether it’s in the form of greater quality and efficiency or the avoidance of costly mistakes or errors in judgment.
It’s impossible to make a blanket statement over whether that training should be conducted by existing staff or by outside personnel. Both internal and external training have their place within organizations, and companies should consider the underlying need when considering which is the best option.