IT departments are taking advantage of a training market oversupply to drive some hard bargains for training their workforce.
Companies boosted spending on training IT staff by 6% last year, as demand for skilled staff rises from a three-year downturn. But with more training companies vying for business than there are customers, IT departments are driving prices down, research by IT training consultancy Pardo Fox reveals.
Director David Pardo said, "The market is still down 24% from its peak in 2000 and there is very strong price competition in many areas. There remains a surplus of supply over demand."
But Pardo warned IT departments risked losing quality if they drive down training prices too far. "There is a risk this approach will be unsustainable in the long term. At the very least they might expect the quality of training to be compromised. In the worst case they might drive companies out of business," he said.
Many leading IT training companies have not been profitable for four years, and are only gradually beginning to move into profit, according to the research.
The largest suppliers can offer IT departments a complete range of services, including training needs analysis, skills assessments of their workforce, and managed training services. But some companies prefer to buy training on a piecemeal basis from smaller suppliers, who may be able to match their training needs more directly.
IT departments are still struggling with e-learning, and have yet to find the right balance between learning online and classroom teaching. "Many companies are still searching for the ideal blended solution, which takes advantage of e-learning and classroom learning. Attempts to blend them are relatively young," said Pardo.
One problem is that few companies offer integrated training, so IT departments often end up with classroom courses and e-learning packages that don't match.