When people talk about the L&D or training and development department during budget meetings, most associate it with the cost center part of the organization and not the profit center. Even when considering L&D or training and development initiatives, the activities inevitably are termed a cost center activity. As a result, many L&D professionals believe that a slump in the organization’s bottom-line often results in cost cutting, starting with the L&D department.
Unfortunately, this is true, but only for those organizations that do not understand the power or rather the value of training and development. Believe it or not, the training industry is valued at well above $150 billion globally, and contrary to common belief, not all of this money is made by training institutes, freelancers, colleges, or universities.
Training and Development — Passive Profit Centers of Large Corporates
Yes, that is absolutely correct. Gone are the days where training and development or L&D departments were liable cost centers.
Modern organizations known for their path carving ideology and belief in lifelong training have successfully turned their L&D and training departments into successful profit centers!
We cannot even begin to understand how smart an idea this is!
DID YOU KNOW: Audi, which is a division within the Volkswagen super corporation was awarded ‘The Best Training Company—2017?’ This award was presented under the Automobile Manufacturer category! Audi takes in 800 apprentices from over 940 companies and trains them on over 20 important manufacturing processes. Obviously, these 940 companies pay a pretty penny to place their apprentices with an automobile manufacturing ace like Audi! (visit: https://www.audi-mediacenter.com/en/press-releases/ ) to know more.
What Makes L&D Profit Centers this Special?
Everything about this is special. Large organizations with expertise in their industry are not only generating profits from sales of their products and services. They are now sharing their expertise and knowledge with other organizations, even competitors, and earning cool profits!
Extended training divisions or ‘training arms’ of modern organizations are doing so much, you’d be put to shame if you walked into one of these organizations thinking L&D and training is a cost center associated liability.
Think about it, these L&D departments ensure their employees are trained well, at the same time, they are generating passive income on the side and it’s not even a small amount by a long shot!
Price Water Cooper (PWC) has a complete training division under it called the PWC Academy where they train clients—other accounting, auditing, and finance management services—on a number of functions. In fact, PWC Academy falls under their ‘Assurance’ center which just grew by 5% or $17.4 billion. (visit: ahttps://www.pwc.com/gx/en/about/global-annual-review-2019/revenues.html)
Still think L&D and Training is a Liability?
If your organization is not thinking about training and development like these organizations, unfortunately, it’s missing the bus on this one.
The point is, if your organization still looks at training and development as a liability (cost center), its losing out on what may one day be a very viable business subsidiary.
Now, some may think that only big organizations can achieve something like this. After all, they have years of experience, knowledge, and expertise to harness, right?
WP Engine—a web hosting provider—was voted as the 14th Best SME by Forbes 2018. WP Engine has its own training branch where they provide training to businesses and individual users on WordPress. WordPress is a popular content management platform and the demand to master it is immense!
Are you seeing the trend here? If you’re good at something and there is a market for it, there is most certainly a market for its enthusiasts who want to learn as well! If your organization doesn’t capitalize on something like this, someone else will most certainly.
How are Other Pros Doing It?
So we read about Audi, PWC, and even a medium sized business called WP Engine which trains their customers, competitors, and even general public. Not only are they earning passive income for a supposed cost center, but they are also training their own employees who generate profits!
However, not all companies take the same route of direct training. The next two super organizations are doing things a little differently.
Apple Inc. San Francisco’s golden child doesn’t believe in just training and development. They believe in training and development that makes them money indirectly. Apple charges $299 for AppleCare self-study coursewear.
This is a course that the general public takes in order to give two examinations—the Macintosh Service Exam and the Apple Troubleshoot Exam—which cost $150 each. These examinations are for people looking to become apple certified technicians.
But, that’s not all. Apple’s L&D also partners with IT training institutes, providing them with updated training content as technology advances. Think about it, not only are they earning via their AppleCare self-study, they are also charging for the examination tickets!
Microsoft is also doing the same. Everybody knows how coveted a ‘Microsoft Certified’ tag is. Like Apple, Microsoft sells examination passes starting at $125 and goes up to $244.
They too are prime training content suppliers to prominent training institutes around the world where training on Microsoft products are provided. And they aren’t alone.
Turn Your L&D Departments into Profit Centers
Welcome to 2019, where the training and development departments of large organizations are not your traditional cost centers. They are training powerhouses generating passive income while boosting the profit center’s operations to earn greater revenue.
It’s time other organizations take cue and join the supply side of an industry where the number of knowledge hungry individuals are on a rise daily!
Organizations looking to capitalize on their ‘experience’ need to formalize their internal training mechanisms first. No matter how good or niche your training is, if it isn’t structured and formalized, nobody is benefiting from it.
An organization needs the bare minimal like an LMS with eCommerce features and top quality eLearning courses.
To help organizations achieve more from their training and development departments, like that mentioned above, our corporate learning management system comes with recognized eCommerce abilities, where courses are bought and sold as well. We also develop custom eLearning courses. To know more about eLearning courses, visit us at eNyota Learning.
To try Abara’s eCommerce feature, click here to initiate a thirty-day trial. You can also click here m to schedule a demo and one of our representatives will get in touch with you. On a parting note, do not underestimate the power of your L&D department, it can do more than you think!
As always, happy learning!