Indian L&D market shrunk by 15-20%

Learning budgets have shrunk in organizations

Though the learning budgets in Indian firms have declined by 15-20%, the immediate future will see growth and service enhancements

The last 12 months were difficult for the learning and development market in India. L&D companies observe that the economic conditions severely affected the industry as organizational investments on L&D services shrunk in 2013-14 compared to 2012-13. The market for L&D in India shrunk by about 15-20 per cent in the last 12 months. As discretionary L&D budgets were curbed among Indian companies, they looked to build internal capabilities to address their learning challenges. The need and demand for L&D, however, has not shrunk and with the economic conditions showing positive signals in the coming months, the industry is likely to grow. Many factors contribute to the demand for L&D services in India in the coming times.

High demand for leadership development

Like previous years, the leadership crisis in India continues to aggravate and organizations find themselves in a difficult spot as they try to find the right leaders for their business efforts. This crisis, to an extent, is a result of the rapid growth of the economy in the past decade compelling organizations to place people in key positions without the right amount of experience and capabilities. In these difficult economic conditions, organizations are finding it difficult to find and place the right leaders.

Technical leadership is also a key area where L&D organizations will see a lot of demand in the near future. Demand from core industries such as manufacturing is likely to grow as government regulations continue to become more favourable compelling the expansion of the market for technical leadership development.

Evolution of the partnership model

As the market grows in maturity, the product-delivery model is rapidly getting replaced with the partnership model. An increasing number of companies are seeking their L&D service provider to act as a consultant during the design and assessment phases. The age of standardized product offerings will gradually die out as customers seek higher levels of customization based on their unique needs and requirements.

Partnerships will work on the premise of achieving several long-term capability objectives and service relationships will be built around them. This presents an opportunity for L&D service providers to create multi-year service plans around business objectives. Woking to build a collaborative and long-term relationship is an objective that both service providers and consumer of L&D services are looking to build.

The emphasis on quality will rise

The market for learning services is very fragmented comprising many players. Services seemingly appear similar and are cost competitive. Quality, therefore, comes across as a key differentiator in the market. Most consumer organizations evaluate L&D services by their reputation for quality. Global organizations with reputed brand names, therefore, find themselves at a natural advantage. That said, Indian organizations have a big potential opportunity to create a positive brand image by creating high quality and customized services.

One of the key ways by which L&D companies can emphasize their focus on quality is by offering consultative assistance as opposed to offering standardized services. Organizations can rationalize their L&D investments by looking at them with the lens of outcomes. An L&D service provider, which can come across as a partner to help specific human capital enhancements such as competency-level upgrade, can hope to build a positive brand image about the brand.

While the L&D market declined in 2013-14, there is a general feeling that it will grow at a healthy rate in the coming months. E-learning and blended learning will likely continue to be stable business lines. There will be several other opportunities such as in-house L&D capability development. As organizations will invest in developing their internal L&D capabilities in key areas such as technology and leadership, the outlook for the learning market in India is positive.

Opportunities: