Corporate training to the USA

(Last updated: 29 July 2008)

Trends and opportunities

The market

The corporate training industry in the United States is a crowded, highly fragmented and competitive market place. In 2007 there were approximately 66,236 businesses operating in the industry.

There are a large number of sole operators or small organisations that use contract staff to meet the needs of their clients, however, non-employing businesses account for less than 14 per cent of industry revenue. The large providers currently have the lion's share of the revenue from this industry.

It is estimated that the training needs and demand can be segmented as follows:

• Professional development training – 60 per cent
• Management development training – 23 per cent
• Quality assurance training – 10 per cent
• Business coaches – 7 per cent

Since 2000 the industry has experienced strong growth, averaging 5.2 per cent, per annum. This has been due to increasing acceptance of the importance of the services this industry provides. It is expected that the industry has reached between US$5.8 and US$7.6 billion in 2007.

The major market segments within the industry are:

• Private sector – 50 per cent
• Public sector – 24 per cent
• Individuals – 18 per cent
• Non-profit sector – 8 per cent

(Source: IBIS World)

At present, the following trends are apparent in the US market:

• The most successful learning organisations have moved away from the corporate university model to a shared services model and hence spending more on outsourced services such as training and development.
• Talent shortages are being felt in industry sectors across almost all geographies. Consequently, companies are putting more emphasis on hiring and training new personnel and on training current employees for new roles.
• Corporations are increasingly recognising that learning and development is part of an integrated talent management process that includes recruiting, performance management, leadership development and succession planning.
• Bersin Associates report that while management/supervisory training and leadership development is a top priority overall, specific industries invest heavily in other employee audiences as well. For instance, in telecommunications, 23 per cent of training program dollars is spent on customer service training; technology companies invest 29 per cent of training dollars on sales training; and pharmaceuticals spend 25 per cent on compliance and other mandatory training.
• Leadership development and management education is the largest single program area of spending in corporate training today. There is a push toward integrating leadership development into talent management processes, such as succession planning. Bersin Associates research indicates that, among all the talent-related processes in HR, more focus is being given to leadership development and succession planning than almost any other area (with performance management coming in second).
• Potential strengths for Australian training providers are likely to be that Australians are friendly and have a good understanding of diversity in the workplace.

Opportunities

The US corporate training market is mature, complex, extremely competitive and challenging, however opportunities exist for quality providers that are market ready and can deliver a unique offering within this market place.

These opportunities include the following:

• Providing a niche program that is not being offered in the USA.
• Finding a need within US organisations that has not been satisfied to date.
• Partnering with a high profile individual delivering an innovative message.
• Partnering with existing organisations such as business schools.
• Executive coaching.
• Providing a service in a cost effective (ie. competitive pricing) or innovative way to deliver learning outcomes.
• Providing creative solutions to engage with organisations.

One other possible opportunity is to partner with existing organisations, either training organisations or higher education facilities such as universities and business schools. A successful example of this is The Wharton School of The University of Pennsylvania - they announced a partnership with Gartner in July 2007 on a boot camp of sorts for CIOs, the CIO Academy.

Competitive environment

Establishments within the corporate training industry compete on many different factors, both with other organisations within the industry and establishments external to the industry.

Internal competition – establishments mainly compete on the following criteria:

• Quality of training provided – trainers need to be knowledgeable and highly experienced in their fields.
• Reputation of the training provider – organisations that have a solid reputation will be considered more favourable. This can include both the reputation of the training provider or the content of the course, eg. Franklin Covey has a program that is based on 'Seven Habits of Highly Effective People' and the American Management Association has a long standing within the corporate community.
• Industry specific knowledge.
• Price – establishments within this sector frequently compete on the basis of price.
• Flexibility – this is in terms of delivery and content.
• Marketing and advertising.

External competition – competition from other education operators:

• Colleges and universities
• Professional schools
• Industry bodies
• Management consultants

Marketing your products and services

Market entry

Before considering the US market, corporate training organisations should firstly have:

• A solid reputation. Reputation is particularly important in the US. Establishments generally need to have a solid reputation for the quality of training provided, in order to attract individual students to public seminars and courses, and corporations seeking customised training for their professional and management staff. Joining the International Association for Continuing Education and Training is one way to begin to develop a reputation. Also, other clients may be good referees. If an Australian organisation has clients that are well-known international names, this can assist in building reputation.
• Develop a thorough knowledge of the corporate training industry and target specific customer base.
• Have a market presence within the US.

Presenting to US corporations is the most important part of the overall market entry strategy. The major challenge is to find the key influencers within the corporation who is responsible for the training and development strategy. These individuals may be in a separate training or learning department or more frequently they will be within the human resources division, as more often we are finding that management development is being linked to the performance management process.

Some important marketing tools include:

• A professional website that clearly states your unique offering. Many organisations within the US will not meet with a prospective vendor until they have viewed the website. We would recommend that there are client testimonials included on the website.
• Advertising on the web may be worthwhile as many organisations conduct searches for these types of services.
• Program information brochures to leave with an organisation after your sales visit.
• An ability to demonstrate a return on investment.

Other strategies for consideration are as follows.

• It is highly recommended that training organisations planning to enter the US market are fully prepared in advance.
• Join appropriate organisations such as: Society of Human Resource Management and American Society of Training and Development. Attend networking events with these organisations as these are good locations to connect with training and development managers of corporations.
• Ensure that your organisation has a unique offering for the US marketplace. Whether it is a concept that has not been introduced in the US or it is a more effective form of delivering the learning outcomes.
• If you have unique product names for your programs it is highly recommended to register trademarks (see US Patent and Trademark Office), as Australian trademarks do not carry over to the US.
• Evaluate the competition. Ensure your offering is competitive on delivery and pricing structures.
• Americanise all marketing materials, including: website address and content, all spelling and grammar must be in an American format. All printed materials should be in American print format. Word documents should be prepared for letter-sized paper.
• Participate in trade shows and conferences (a priority).
• Develop a website marketing strategy – many US companies will conduct an initial search for services on the web and ensuring that your website is easily visible will be useful. Advertising on search engines such as Google and Yahoo and ensuring that your website uses search engine optimisation is highly recommended.
• Network – ask your existing clients if they have operations or affiliates or business connections in the US, use trade shows and conferences and plug into Australian business networks.
• Have a US presence, it is critical that you are seen to be able to deliver locally and provide local support. This could be either setting up a local office or through a representative.
• Advertise in relevant industry magazines. 
• Ensure you have references available, try to have a selection of previous clients’ logos on your website, and have a number of clients whom are happy to be referees for the work that you have delivered.
• Be prepared to receive knock backs – US corporations generally have sophisticated training plans and may not be receptive to changing suppliers, it will be extremely challenging to find the correct person within an organisation. Once found it can be even more difficult obtaining an appointment.

Links and industry contacts

Government, business and trade resources for USA

American Management Association – www.amanet.org
American Society for Training and Development – www.astd.com
ASTD 2008 International Conference & Exposition – www.astd2008.org
Center for Creative Leadership – www.ccl.org
Directory of graduate school programs in the USA – www.gradschools.com
The Education Coalition – www.tecweb.org
Guide to Trade Shows, Exhibitions, Fairs and Festivals, Conventions, Conferences and Seminars –www.expocentral.com/job_and_career/industry_job_and_career_human_resources.html
International Association for Continuing Education and Training – www.iacet.org
Society for Human Resource Management – www.shrm.org and www.shrm.org/conferences/annual
World at Work – www.worldatwork.org
World at Work Conference and Exhibition –  www.worldatwork.org/waw/philadelphia2008/attendee/index.html

Media

Crains New York – www.crainsnewyork.com
HR Magazine – www.shrm.org/hrmagazine
HR Management – www.hrmreport.com
New York Enterprise Report – www.nyreport.com
Staffing Management – www.shrm.org/ema/sm
TD Training and Development Magazine – www.astd.org/TD