Strategic Sourcing as an Enterprise Solution for Delivering L&D

Delivering quality, cost-effective learning opportunities to employees is a significant challenge for many organizations. The need to continuously upskill, reskill, and stay competitive requires learning and development (L&D) initiatives to be both agile and relevant. Consequently, L&D buyers are increasingly relying on multiple providers to deliver diverse learning content. 

Training delivery requirements vary widely across organizations. Some employees need in-person training, others benefit from high-tech solutions, and some prefer blended or fully online learning. Developing and managing these options in-house is challenging, especially for resource-strapped HR departments. Finding a single training supplier to meet all these needs is difficult, making strategic sourcing with the right partner crucial. 

Many HR professionals agree that training and development is essential for employee retention, productivity, and satisfaction. Upskilling and reskilling help prevent turnover and promote internal mobility. However, managing L&D can be stressful, time-consuming, and expensive. The sheer number of courses and providers, along with multiple RFPs, negotiations, and performance assessments, makes the process daunting, especially when delivering hundreds of training sessions per month to thousands of employees.  

Why Strategically Source Learning and Development? 

First, the Basics: What is Strategic Sourcing and Procurement? 

As an L&D professional, you may be unfamiliar with the terms “strategic sourcing” and “procurement.” These activities typically fall under the responsibility of a specialized team of procurement professionals. “Procurement” involves the day-to-day transactions, such as issuing purchase orders and handling invoices, while “strategic sourcing” includes broader activities like supplier development and optimizing the supplier mix. Limiting the number of suppliers can lead to overall efficiency benefits.  

Projected Increases in L&D Spending 

According to Statista, the average per-employee spending on learning and development worldwide increased steadily since 2008. Our findcourses survey echoes this trend, with over 73% of US and 61% of UK respondents agreeing that their companies will dedicate more time, money, and resources to internal training over the next 12 months. Additionally, 53% of respondents say their organizations will hire more new employees in the next year. 

Such increases put additional pressure on already stretched HR teams. An L&D buying  and sourcing specialist could help. 

Changing How You Think About Buying L&D 

Whether upskilling existing employees or training new hires, training costs are inevitable. Understanding the factors influencing these costs and how to maximize your L&D strategy's ROI is crucial to managing expenses. Simple solutions can improve your training buying and administration process, helping your organization stay competitive while enhancing employee experience. 

Companies can reduce costs by leveraging volume discounts, utilizing group training, and moving some training online. However, the buying process and strategy can mitigate costs even further. Many services we use, like airline and hotel booking portals, operate by consolidating offerings and pre-negotiating discounts.  

Training buyers can search, compare options, and buy with a single click, enjoying the benefits of pre-negotiated discounts and simplified billing. Most importantly, the buyer pays one total, simplified bill for all the services purchased. 

Beyond Cost: 3 Key Benefits of Strategic Procurement for L&D Teams 

HR has finally earned its proverbial seat at the table. The pressure is on to advance the organization's strategic goals while keeping costs in check.  

An L&D-specific strategic sourcing and procurement system: 

• Provides Extra Resources for HR Teams

• Creates Administrative Efficiencies 

Building an effective learning culture is essential, but budget and time constraints are problematic for many L&D teams. Easy-to-use procurement portals with self-service purchasing and booking tools for training can dramatically reduce associated administrative tasks.  

• Impacts Employee Satisfaction and Engagement 

Learning directly impacts the employee experience, enabling employees to develop skills for current and future strategic business goals. Continuous learning is crucial for staying competitive, facilitating upskilling and reskilling opportunities, and providing leadership training. 

Organizations that invest in employee training communicate, “we invest in our people.” Employees are happier in a strong learning environment, with over 70% of UK and 82% of US respondents rating their company learning culture as high among those with high satisfaction. Gallup’s 2024 State of the Global Workplace report estimates that low engagement costs the global economy $8.8 trillion. Organizations that strategically invest in employee development see 11% greater profitability and double the employee retention. 

Conversely, dissatisfied employees often complain that the same individuals are always chosen for training. This limited learning environment negatively impacts worker engagement and satisfaction, which are closely linked to training opportunities. However, effectively planning and providing training to a broad range of employees requires a substantial budget.  

Conclusion