Time to get tough with healthcare Learning & Development spending

Authored by: Jonathan Smith (Lead, Public Sector Learning Solutions).

If I were a CFO in a healthcare organisation right now, looking for cost savings and efficiencies (and who isn’t?), I’d be heading straight for an in-depth look at my learning and development (L&D) supply chain.

It’s a part of the business where I think there’s real scope for making a difference to the bottom line.

In my experience, the typical healthcare L&D supply chain is surprisingly fragmented; something which can quickly give rise to risk and inefficiency. In any industry, if you’re buying something at scale, you try to consolidate its procurement as much as possible, driving out any inefficiencies and getting more while spending less.

Within healthcare, I’m sure it happens with facilities, temporary staff or beds but I don’t get a sense of organisations having the same appetite for doing it with learning.

Why? Well, I believe it’s a legacy thing; years of building up relationships with individual suppliers and thinking everything’s working just fine. I think it’s also hard to get a good handle on what’s being spent both centrally and departmentally, who it’s being spent with and how effectively.

The net result can be a fragmented supply chain of dozens, maybe even hundreds, of legacy suppliers whose content, subject matter expertise and delivery approaches may no longer be up to date – and who almost certainly don’t represent the best value in the market any more. Each one may also be evaluating the impact of their learning in a different way, making it incredibly hard to determine whether or not you’re getting a decent return on your investment.

I do understand how we’ve got to this point. The best training requires specialist L&D providers. This gives rise to a lot of ad hoc procurement by organisations. They often buy as they go, with their in-house L&D teams administering the contracts they sign up to.

Before you know it (and this is a real example that I came across recently), you’ve got three different training providers overseeing your junior, middle and senior management training programmes. There’s precious little continuity or consistency between the three, meaning your different cadres could be learning fundamental management principles according to three completely different schools of thought.

As an L&D supply chain continues to expand in this way, managing it becomes a full-time job in its own right – but one that the in-house team often don’t have the capacity or capability to do.

That’s where risk creeps in – around things like contractual terms, data handling, cybersecurity and, of course, value for money. Meanwhile, staff who could be spending their time on high-level, strategic L&D considerations instead spend all day overseeing tendering processes, raising purchase orders and onboarding yet more suppliers.

In a healthcare system that’s currently looking everywhere it can for cost savings and productivity gains, this apparent reluctance to tackle the obvious economic inefficiency of the L&D supply chain is intriguing.

I’m not going to shy away from suggesting that a managed learning service could soon tidy up that fragmented supply chain. But to any healthcare CFO or procurement leader out there right now, I’d simply say – have a good look at where your L&D spending is going.

Lift the lid on that supply chain of disparate suppliers and ask whether you’re happy with the risk it poses to your organisation and how it’s being managed. Regardless of how you decide to subsequently tackle it, consolidate that supply chain as soon as you can. Make some hard procurement decisions, based on economic reality, not legacy thinking.

After all, you’ve already looked everywhere else for the savings you want and need – so why not here?