Training and development contracts – 3 factors to consider

By June 8, 2017 Procurement

Training and development programmes can be sensitive and high-risk, so make sure you pay attention to the small print

If you’ve been following our guide to procurement training, you’ll already have learnt how to manage the category and how to source and select the suppliers that will drive the best results. Now, in our third and final part, it’s time for the small print: contracts.

Clear terms

Training and development programmes can be sensitive and high-risk, so it’s very important to put standard clauses and processes in place to ensure organisational compliance, from both your own L&D team and external suppliers.
It’s efficient to have your own standard terms to provide to suppliers for 80% of your organisational spend; this will help create common understanding both within the company and between the company and suppliers, as to what is appropriate and expected. Standard terms usually cover areas such as payment terms, personnel and organisation vetting, confidentiality, IT security, and applicable territory laws and policies, as well as organisation policies. Of course, for high spend or niche requirements, such as technology platforms or professional bodies, you might need to negotiate the terms.

Hidden costs

One way procurement can really make a difference here is by understanding the whole costs involved with a training workshop and ensuring adequate cover in a supplier contract for intellectual property and cancellations. In terms of IP, if a provider is tailoring content or developing materials as part of the workshop, consider whether your organisation will want to keep and use any of this at a later date; if so, ensure that’s covered within the agreement and that you have an understanding of the costs. When it comes to cancellation, terms are often stipulated to incur charges if a client calls off training at short notice. While this is fair in principle, be aware of the notice period required – two or three weeks’ notice should be ample time in most cases for a supplier to reschedule their trainers.

In-company training will often be quoted on a day-rate basis for the trainer’s time. But be aware of other costs that might emerge. These may include:

• Intellectual property (IP) ownership or license costs
• Trainer travel expenses
• Venue costs
• Design costs
• Materials (hard copies)
• Charge per delegate over and above a maximum number

Another important factor in calculating the total cost will be the number of delegates that are trained at any time. Smaller groups will require more sessions, but there is a trade off between group size and individual attention. One cost-effective option to consider, if there will be an ongoing training requirement and IP costs are not prohibitive, is identifying and teaching internal trainers to deliver the workshops.

Real results

Depending on the subject, it might also be worth discussing the possibility of linking supplier fees to the results of the training intervention – where, indeed, it can be measured. You might agree part payment at milestones, or post-delivery of all services depending on proven ROI.
Don’t forget: the purpose of training is to improve the productivity, effectiveness and capabilities of your staff – however, if this is not also continuously commercially focused then both L&D and Procurement can lose credibility. Both procurement and L&D should be mindful of this at all times to ensure and drive consistent best practice, value for money and compliance. And if you do learn to working together smoothly and creatively in the area of training, you can achieve great things: more skilled and engaged staff, happier stakeholders and a more profitable business. Which is what it’s all about.

 

 

James Ball is a consultant at Retearn and has extensive procurement, supply chain and operational experience across learning and development, IT and healthcare industries.

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