Simplify Employee Training By Investing Smart to Reduce Long-Term Costs

How to simplify employee training by investing smartly to reduce long-term costs

What this article contains:

Live example comparing the cost of traditional training vs eLearning
What are you paying for when conducting classroom training
What are you paying for when conducting eLearning-based training
Outcome of calculating the long-term costs of both traditional training and eLearning

Let’s say your company employees 100 people divided into five teams of 20 members each. Your industry undergoes sudden growth owing to some new software-technology revolutionizing the way every player within the industry operates. That means you have to inevitably adopt this new technology or risk missing out on a chance to reinvent and gain an edge over those who don’t.

Now, the only way to adopt this technology is if some or all of your employees understand its importance and are trained to use the new software. However, each of your five teams have varying use-cases for the software based on their job roles and responsibilities.

So given the situation, you lay out a plan of action. The way to go about it is via classroom training sessions where each team attends the training during a dedicated time slot and manages to finish the session in 45 days.

However, you now have to provide the management with a set of answers to:

How much has your employees’ performance increased with regard to operating the new software?
How much of the training has been retained?
Is the company’s growth and direction proportional to the cost of training?

Right off the bat, you’ll realise that it is difficult to furnish decent answers to some of these questions. Even then, there’s a huge gap in determining the real ROI!

Moreover, you may also want consider the other options you have with regards to conducting training and answering the management’s questions and probably do it all at lower costs!

Straight up the answer is that eLearning can directly assist in the scenario mentioned above, and actually do it at anywhere between 30% to 50% less than what a classroom-based session would cost.

And to prove it, here’s a lot of calculations:

How much would it cost to train 100 employees over 45 days with 5 teams each requiring unique training solutions?

According to Salary.com, the average cost of hiring a corporate trainer in the United States can range from anywhere between $24 to $31/hour. For this example, let us take the median pay of $28 an hour.

Now let us say that each team needs a 2-hour session every day and we have 5 teams to be trained. So multiply 2 into 5 and we arrive at 10 hours a day. So basically, we need to pay the trainer $28 for 10 hours which is $280/day to train all 5 teams.

Finally, multiply $280 into 45 days and you end up paying $12,600 for 45 days’ worth of training. One thing to keep in mind is that we have considered a flat rate for the trainers’ fee to train all 5 teams. Even though some teams may need more training based on their use-case which may cause the hourly rates to increase! Also, we have not accounted for the cost to hire a venue, travel costs, etc.

And now that you paid for the training and it has come to an end, what happens if:

Most of the teams need additional training beyond the initial 45 days?
New employees are to be trained – the ones who join after the training session?
People need to revisit the training.

It’s pretty evident that considering the initial investment of $12,600 as the potential cost to train is very difficult. Especially when factors like low training retention and need to retrain arise. And even then, we have not accounted for the specialty training that some teams may need in addition to the possibilities of hiring a training venue!

Now let us calculate the cost to build eLearning for 100 employees:

Average annual cost to implement a learning management system can range anywhere in between $5000 to $10,000 annually for 100 employees. For our example, let us consider the cost to be $6000 for 12 months.

What?

That’s right. You were originally paying $12,600 (cost of venue and varying trainers not included) for merely 45 days’ worth of software training conducted in a classroom with no backup plan in the case of:

Extending training beyond 45 days
Training new employees
People wanting to revisit this training

Also, tracking the outcome of training along multiple parameters like completion rate and assessment scores is difficult because there is no learning management system involved to collect and sort this data.

By switching to eLearning, you are effectively paying $9,250/month for 30 days with the ability to:

Reuse the training multiple times
Train new employees as and when they come
Track the outcome of training and collect data on your learners’ habits
Provide training on demand for your learners whenever they want it!

But wait a minute. What if you take the same course (which is a one-time purchase) and only renew the cost to license your LMS at $6000 for the next year? Add $6000 to $111,000 and you have now paid a total of $117,000 for 2 years’ worth of training. And if you divide $117,000 by 24 months you now have paid just $4,875/month for 2 years’ worth of training 100 employees + all the new employees. Also note, that there is an additional cost involved with adding a new employee to the LMS which usually averages at $20/month or $240/year per new employee.

Final outcome

Classroom Training Costs $12,600 for 45 days and:

It is a one-time activity at best.
Cost to hire venue is not a part of the $12,600.
New employees have no way of revisiting such training.
No data or learner analytics are captured.

Whereas eLearning Costs $111,000 for 356 days and:

Cost per month or 30 days is $9,250.
Training can be reused and revisited on demand.
New employees are covered.
All types of data are stored and ready to use.
The same training can be used for the next year as well, bringing the cost to $4,875 for 2 years!

Conclusion

So as evident, the cost to implement eLearning is actually far lesser than and classroom-based training with the additional benefits of all the things eLearning can do that classroom-based training cannot. No matter what scenario you consider, eLearning-based training almost always outweighs classroom training with lower training investments and higher efficiency!

We are eNyota Learning and we have been assisting organizations build custom eLearning-based training courses since 2007! If you’re looking to build custom eLearning courses for any of your corporate employee training needs, you can reach us at contactus@enyotalearning.com or fill this form and we’ll reach out to you shortly!