Training Methods: Internal vs. External – What’s Best For You?

Business and organization requirements evolve at a rapid pace and technology has been advancing at an even faster pace. However, the fast pace doesn’t stop companies from re-evaluating their training methods and strategies. In actuality, it may even encourage a need for training.

According to Benjamin Franklin, “An investment in knowledge pays the best interest.” Thus, training is no longer an additional feature to have in your business. In fact, it has become an absolute necessity for an organization’s long-lasting success and employee development policy.

Training accounts for the development in an employee’s skills and business growth. It boosts the confidence and morale of an employee, which has proven crucial for ideal productivity. This is why, in 2017, the total training expenditure in the U.S. rose to 90.6 billion dollars, increasing about 32.5% over the previous year. In fact, around 70% respondents in a 2015 study stated that on-the-job training and growth prospects directly impacts their decision to continue working in for an organization.

Training Methods: the Internal vs. External Dilemma

Before discussing the types of training areas, let’s first discuss the routes through which training can be delivered.

The two most commonly used routes are internal and external training methods. Both routes have their pros and cons, nonetheless, each is effective when chosen for the right type of training.

1. Internal or In-House Training

Internal training methods involve the use of company’s own resources and expertise to develop and deliver the specific type of training. It is cost-effective, informal, and brings improvement in the existing training methods and employee communication. Furthermore, it facilitates employees in understanding and following their trainers easily due to workplace familiarity.

However, as an ‘inside job’, internal training can limit the scope of ‘out-of-the-box’ skills presented during training. This could possibly narrow the perspective of the business. Additionally, many small businesses do not have ability to develop a training structure within their organization. Furthermore, in case of certified training, companies often find it hard to locate an internal trainer who can offer certifications for others.

Internal training also present a higher opportunity for employees to be distracted from the training. They may become distracted by colleagues or feel compelled to answer emails.

1. External or Outsourced Training

Conversely, external or outsourced training can open new prospects for development in your organization. Outsourced training will expose your organization to new ideas that were not previously considered. Participating in external training courses might set your organization apart from your competitors.

External training allows for employees to be taken out of their comfort zone, essentially forcing them to find new solutions or approaches to completing projects. For instance, employing training methods like Six Sigma training can alter the company’s management system and improve the overall communication among the company’s various departments.

In-house trainers might could seem to be the most cost-effective option for training methods as there are no travel expenses or course expenditures involved. However, in-house trainers may lack the advanced skills to train other employees. On the other hand, external trainers can be expensive when you include payment for the course, travel expenses, and more.

Typically, organizing short training programs, such as one-day sessions, requires a minimum payment of travel overheads and costs of course material. However, external trainers can offer a wide range of professional and novel knowledge about the specific business skills. Their involvement and training will bring external knowledge and of which the in-house trainers might be unaware.

Types of Training: Technical and Business Management

1.  Technical Training

Referred to as ‘hard skills’, technical training involves skills that are job-specific. Owing to the nature of technical knowledge, both internal and external training programs are well-suited for technical training. Choosing internal training will formalize the existing knowledge and training of the employees. External training will give employees a chance to think outside of the box where their ideas will not be influenced by current policies and practices.

One can learn from the success of Airbnb, which is one of the biggest names that employs tech training in-house and is expected to reach revenue of 10 billion dollars by 2020.  Moreover, SAS has successfully managed to train its employees in-house and continued to grow with 2016 revenue of 3.2 billion dollars, with sales increasing up to 9% in constant currency. 

1. Business Management Training

The business management training includes the development of interpersonal skills as well as project management skills.  employees that will help them carry out their duties effectively. In contrast to technical training, business management training is termed ‘people skills’ due to its broad application and transferable characteristics.

For effective business management training, external professionals can be hired to train employees or the staff can attend off-job training sessions. For example, by inviting external trainers and new businesses, Facebook gained a profit of 3.9 billion dollars in 2017, which is 71% more than that earned in 2016. Their revenue for 2^nd quarter of 2017 summed up to 9.3 billion dollars, which is around 45% higher from the last year.

Which Training Method Will Work For You?

Training comes in various types and it depends on human resources and training managers to choose the right one when considering the best strategy for their employees and organizations. On occasion, the best type of training may actually be a mix of internal and external training. A mix of training methods means that your employees will be exposed to the tried and true methods of your organization while also learning the invaluable skills and knowledge someone else can bring with them.

Paychex, a integrated human capital management provider, has found that a mix of training methods work best for their new employees. They have created a comprehensive new-hire program that includes offsite instructor-led training in addition to at-home virtual learning.

A mix of both can be applied to keep your staff up-to-date and ahead of your game. It is important that the employers must consider their business and choose the route which fits their requirements well. They must also consider the business size, office space, and expertise of their staff.