So, you’ve probably been thinking…
‘Should I hire someone to head our leadership department or outsource the training?’
To stay competitive and to continue growing, I’m sure every company faces this question at some point. This key element of business can no longer be seen as simply an “extra expense” or liability.
Along with high ROI, companies that prioritize leadership development are 2.4 times more likely to hit their performance targets.
This focus on leadership skills directly translates into better strategic decisions and business growth.
With this in mind, companies know which direction makes the most sense, but often face the dilemma of choosing between outsourcing leadership development and hiring an in-house leadership development director.
Each approach has its benefits, but understanding the key differences can help decision-makers make an informed choice.
Here, we explore three main advantages of outsourcing leadership development compared to in-house hiring, focusing on cost-effectiveness, access to expertise, and scalability.
Cost-Effectiveness
One of the most compelling reasons to outsource leadership development is cost-effectiveness.
Outsourcing:
When companies choose to outsource, they pay for specific services and programs as needed. This might include training sessions, workshops, or consulting services on a project basis.
The costs are usually variable and can be adjusted according to the company’s needs and budget, allowing for greater financial control and flexibility.
For instance, a company can choose to invest more during periods of growth and scale back during quieter times without incurring unnecessary expenses. They may also choose a narrower personnel training focus and expand gradually.
And here’s the real highlight: There are no ongoing costs associated with salaries, benefits, office space, and other employment-related expenses you find with in-house hires.
In-House Hiring:
On the other hand, hiring a full-time leadership development director involves significant and ongoing expenses.
Beyond the salary, companies must account for benefits, office space, equipment, and other employment-related costs.
Adding onto that, the process of recruiting, onboarding, and training the new director can be time-consuming, costly, and oddly enough, may require outsourced training in itself!
Many of these related expenses are fixed and can strain the financial resources of smaller companies, making it a less flexible option compared to outsourcing.
Access to Expertise and Specialized Knowledge
Another significant advantage of outsourcing leadership development is access to a broader range of expertise and specialized knowledge.
Sometimes you only know what you know within the four walls of the company.
Outsourcing:
External partners often consist of teams of seasoned professionals with diverse backgrounds and extensive experience in leadership development.
They bring a wealth of knowledge and stay updated with the latest trends, research, and best practices in the field. This ensures that the company benefits from cutting-edge techniques, insights, and progressive training.
For example, leadership development firms may offer customized programs that are specifically tailored to the unique needs and challenges of the organization, which can be more effective than a one-size-fits-all approach.
In-House Hiring:
An in-house leadership development director, while potentially very knowledgeable, is limited to their own experience and expertise.
They may not have the same breadth of exposure or access to the latest industry developments as a team of external experts.
This limitation can affect the innovation and effectiveness of the leadership development programs they design and implement.
Additionally, their focus might be narrower, based on their personal experience and preferences, rather than the wide-ranging insights that a diverse external team can provide.
Scalability and Flexibility
Scalability and flexibility are crucial factors in leadership development, especially in a fast-paced and dynamic business environment.
Outsourcing:
Outsourced leadership development programs are highly scalable and flexible with companies easily adjusting the level of service based on their evolving needs.
For instance, during periods of rapid growth or significant organizational change, they can ramp up the leadership training efforts.
On the flipside, during stable periods, they can scale back without any long-term commitment.
This flexibility allows companies to align their leadership development efforts with their strategic objectives and current circumstances.
In-House Hiring:
An in-house leadership development director may find it challenging to scale programs up or down quickly. Adjusting the scope of their work can be constrained by their capacity and the company's internal resources.
This lack of flexibility can result in either underutilization during slower periods or overwhelming demands during peak times, potentially affecting the quality and effectiveness of the leadership development initiatives, and not to mention company spend.
Additional Benefits of Outsourcing
Objectivity and Fresh Perspectives:
It’s very easy to have a subjective bias having all training done internally.
External partners can offer unbiased assessments and fresh perspectives, free from internal politics and biases.
This objectivity is crucial in identifying leadership gaps and areas for improvement, leading to more effective solutions.
Focus on Core Competencies:
By outsourcing leadership development, company leaders and HR professionals can focus on what they do best and leave the training and development to their partners!
This allows them to allocate their time and resources more effectively, easing stress, and driving business growth.
Quick Access to Proven Programs:
Outsourced providers often have ready-to-implement programs that have been tested and refined across various industries and companies.
This can save time and ensure that the leadership development initiatives are effective and impactful from the start.
Conclusion
While hiring an in-house leadership development director can provide many great benefits, outsourcing leadership development offers numerous compelling advantages that could be a great fit for many organizations.
It is more cost-effective, provides access to a broader range of expertise, and offers greater scalability and flexibility. Not to mention giving back time to decision makers to leverage their expertise on other business matters.
By leveraging external leadership development partners, companies can ensure that their leaders are equipped with the skills and knowledge they need to drive the organization forward, without the financial and logistical challenges of maintaining an in-house program.
For many companies, outsourcing leadership development is a strategic choice that can lead to sustained growth and success!
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