In-House vs External Training: Advantages and Disadvantages

Introduction to Employee Training Delivery

Most firms provide some type of training and development for their employees. This may be delivered formally through dedicated training departments and structured development programs, as well as informally through peer-to-peer learning. Formal training may be provided in-house or through external providers; each approach carries its own advantages and disadvantages, and each will be considered separately below.

In-House Training

In-house training refers to training that is provided directly by the employer. For larger firms there may be a dedicated training department, delivering content through classroom-based learning, on-the-job training and development, and e-learning (Jones, Beynon, Pickernell, & Packham, 2013). For smaller firms, training is more likely to be task-focused, with on-the-job instruction and support provided by peers and management (Jones et al., 2013).

Advantages of In-House Training

By developing in-house training, firms gain a number of significant advantages. Firstly, the organization is able to control how training and development are delivered. This includes control over timing, content, and quality, as well as the ability to ensure that the organization's culture is supported and maintained throughout the delivery of training (Buchanan & Huczynski, 2011).

The primary advantage is the ability for a firm to customize training for its own specific needs, which may optimize the value created when employees utilize their skills. Where firms have unique processes, internal training may be a necessity — whether it is the way a hamburger is made at McDonald's or the implementation of a safety protocol at NASA. This kind of knowledge and practice cannot be provided by an external party. Internal provision may also increase flexibility in the method and timing of learning, and allow a firm to respond quickly to emerging training needs, thereby increasing the organization's capacity to adapt.

External Training

Many of the advantages associated with external training directly address the disadvantages of in-house provision. External training may provide on-demand services, meaning a company does not need to invest in setting up and maintaining internal training infrastructure. This not only reduces financial investment in one area, freeing resources for use elsewhere, but also reduces the demand on physical resources such as office or production space.

Furthermore, by utilizing on-demand services, organizations can ensure that trainers have suitable expertise for the specific subjects or skills being taught. For example, different external teachers may be engaged for HR competencies, sales and marketing, and engineering — specialists the firm may not have found it viable to employ on a permanent basis (Jones et al., 2013). External providers may also facilitate a greater level of skills recognition by offering access to accredited training, which organizations can use to demonstrate the high caliber of their staff. Additionally, by utilizing external providers, the organization avoids the bureaucratic overhead associated with running an internal training division, including recruitment costs and additional legal liabilities related to employment law for extra staff.

Conclusion

There are advantages and disadvantages to each type of training. The decision regarding which approach is most appropriate may vary depending upon the type of training required, the existing knowledge and skills of the employer and their management, the availability of required resources, and the size of the organization. A strategic approach to talent development requires weighing these factors carefully before committing to either model — or considering a blended approach that draws on the strengths of both.

References

Buchanan, D., & Huczynski, A. (2011). Organisational Behaviour. Harlow: FT/Prentice Hall.

Jones, P., Beynon, M., Pickernell, D., & Packham, G. (2013). Evaluating the impact of different training methods on SME business performance. Environmental Planning C: Government and Policy, 31(1), 56–81.

Quinn, J. B. (1999). Strategic outsourcing: Leveraging knowledge capabilities. Sloan Management Review, 40(4), 9–21.