Every year, the business education market grows and is structured. There is no drawback in offers from providers. How to choose exactly the program that the customer’s employees need? Owners will not be stingy with expenses, but so far buying training on the side is still a risky enough investment.
Over the past few years, the number of business education offers has increased many times. Most importantly, the market itself has changed significantly. Whereas previously the main demand was observed on the part of large corporations and individuals, now the main consumers are gradually middle-sized companies. And this trend will only increase in the near future. The need of small companies is clear – it is difficult for them to compete for employees who are in high demand on the labor market. It is easier to hire someone easier and to teach them at their own expense. Especially since after such a step you can count on increased loyalty to the “frame” with a competent image presentation. But the limited budget of customers automatically makes you look for an opportunity to save, what you need to do carefully. After all, the purchase of low-quality service will lead to an even worse result – the money, even if it is less, invested in the employee, and the return as there was no return.
Not myself.
Expenditure on education may not really seem that small. For example, if you take the most popular services in the country – MBA programs, even if you choose the most simple, you will have to spend a lot. Choose the most suitable of them even harder. They vary significantly in terms of their composition (primarily in terms of content, teaching echelon, training conditions), and form (distance learning, evening, modular with immersion, combined), and methods of teaching and knowledge control. “In Russia there is no single market for “MBA education”, it breaks down into segments. In this connection, for example, on the Moscow market as of today there is a price spread on the “MBA program” from 126,000 rubles (distance MBA) to 700,000 rubles for two years, and, according to our latest information, in the near future the market will enter the elite offer with the cost of $100,000. More complex and high-quality MBA programs are in the price range of 600,000 – 700,000 rubles in two years. The cost of Executive MBA programs is even higher, on average about 900 thousand rubles for the entire educational cycle, with high demand and serious competition for enrollment,” – says Margarita Perepelitsa, Director of the Center for International MBA Programs of the Academy of National Economy.
Under the current circumstances, the companies use two main tactics. Firstly, they reduce the cost of external courses, preferring cheaper, narrowly specialized trainings rather than complex programs. Courses are also extremely functional and time-consuming – they mainly last from 2 to 5 days. Rare institutes offer their employees programs longer than two, maximum three weeks. Complex, expensive programs, including MBAs, are offered mainly to mid-level and above managers. Secondly, they actively develop their own educational institutions – the so-called corporate universities. Large and medium companies usually combine both methods. After all, in many corporate universities the ratio of internal and external courses can easily reach 50/50. In this case, the cost of staff training may no longer seem so frightening. Although, of course, depending on the specifics of the business, the costs will be different. For example, it will take absolutely different amounts to train programmers and accountants. Olga Frolova, Head of the Personnel Training and Development Department at G.M.R. Planet of Hospitality confirms: “Training of a line employee is cheaper for a company than training of a line manager. For example, training of a general manager of a restaurant costs the company about $1500”. Natalia Zhuravleva, Head of Beeline University, shares her own experience: “The average cost of training a manager per year is $1280 per person. And it takes 10,000 – 30,000 euros to train a top manager for one program (but these are vice presidents, in our case, only 12 people)”. It is logical that since the courses are simple, most companies can conduct them using their own specialists. And this is an additional resource to reduce costs. In large companies, savings from using their own trainers reach $2 million.
The truth is on the side.
Even our own well-functioning employee training system does not eliminate the main problem – the choice of a third-party provider. In fact, the business education market has long enjoyed large customers and is ready to make concessions to them. “Receipt of corporate orders is a definitely existing trend in business education. Orders may also be placed to train several employees of the company as part of the annual flow of MBA students, or may relate to the creation of your own unique training program for a large group of people, more specifically tailored to the educational and team-building needs of the customer organization. Our experience shows that very often it happens as follows: first one employee of the company receives training on our programs, and then the company, having estimated the practical benefit of the knowledge received by the participant, sends a request for training to three or more people. In this case, of course, we offer more advantageous conditions, i.e. a 10% discount on the full cost of training”, explains Margarita Perepelytsya.
In the second case, the training program is specially developed by specialists in close cooperation with a representative of the client company. It is based on the proven MBA program being implemented and is supplemented by those courses that are necessary for the corporate client. With this special order, the MBA program can be implemented in Russian, i.e. basic English courses are accompanied by translation. “If a company has a need to train a large group of employees, it is more profitable to organize a corporate program. In addition, customers from other regions can also count on additional discounts. Every year, in every stream we have trainees from different regions of the country. Realizing that the level of income there is lower than in Moscow, we provide discounts on the cost of training of trainees from other regions,” continues Margarita Perepelytsya.
It is logical that many companies have already taken the path of long-term cooperation with large providers. For example, Beeline University preferred to send vice presidents to INSEAD for Executive MBA courses, and most top managers were trained at the Center for Creative Leadership. Kingston University and the Academy of National Economy have implemented a two-year corporate MBA programme for EuroChem. However, new partners have to be chosen all the time. Especially if it is not a question of ordering an expensive program, where you can get recommendations from colleagues, but about training easier. The way to send employees for trial training to a potential partner is not always suitable. Olga Frolova confirms: “There are a lot of training companies on the market. Accordingly, the price is different. I divide them into 3 groups, the criterion of division is the price for one training day. The first group is inexpensive companies that promise to make any training under any request in a short time. They most often work with regions. In most cases, the effectiveness of these trainings is not high, but sometimes among these companies there are “stars”, training of which can be effective and useful. It is important to formulate a clear request and criteria for assessing effectiveness. The companies in the first group are good for conducting trainings for middle managers as they are relatively inexpensive and it is possible to purchase a large number of training days. The second group is good Russian companies. They are interesting to work with, the names of trainers are known on the service market. Of course, the second group also has unsuccessful programs and risky trainers, but they are many times smaller than the companies of the first group. For me, the companies of the second group are valuable because they are good at teaching specific skills, for example, training for trainers, or creating “alienated product” – courses that will then be conducted by internal specialists of the company. The third group are large and well-established companies such as MTI. They have serious well-known training courses. These companies are interesting for training even the top management of the company”.
To the touch.
It is not enough just to determine whether the training is of good quality or poor quality. It is necessary to decide whether the selected program can be adapted to the needs of the customer company. Sometimes it is necessary to determine at a peephole whether this or that provider will be suitable. “Prices for training sessions are set arbitrarily enough. I choose a provider based on my personal impressions. First, we need to formulate a very clear request: who we want to teach, what will be the result and, most importantly, how we will measure the effectiveness of training. Then I send my terms of reference to potential partners. I look at the programs they presented. Usually, if the request is clearly formulated, the programs will be almost the same by 80%. Then I start to meet with representatives of companies and communicate with them. Final stage: please make a mini-presentation of the training (or a fragment of it) for a pilot group of employees. Very often it happens that a trainer is good, but not suitable for a group of employees in my company. For example, quite recently I had to buy a program for the coaches of the corporate training center of my company. There were several interesting companies and I asked specialists of each company to conduct a “piece” of training for trainers. One coach had a very handsome young man (cute, with long curly hair, in a great suit), and I have almost all the employees – girls. It is clear that they were not thinking about training for coaches during the whole presentation. Elsewhere, the presentation was led by the CEO of the company herself. In 15 minutes the attention of my employees was completely lost, the coach spoke on her professional slang, and people did not understand her”, – remembers Olga Frolova.
Big companies unofficially admit that not once or twice they were wrong about their partners. However, many mistakes were made not because the seminar was of poor quality. It’s just that the service itself was defined incorrectly. The customer’s specialists did not banal need the knowledge they were trying to convey. When the domestic market of business education is finally structured, it will be easier to look for partners. In the meantime, there is only one recipe to save money – if the company’s management is not sure that a specific training or educational program is really necessary for employees, it is better to abandon the ambitious plan. At least until the customers themselves decide what they want to get “on the way out”.
