Calculating the cost of training isn’t easy. There’s a lot of factors to consider but it’s still an important number to know. Without an understanding of the cost, it would be impossible to know what your return on investment (ROI) is.
A thorough analysis of your training program, resources, and costs will help you answer a couple of key questions. Are there gaps in the training offered? Are you spending too much or too little? Does the current program meet the organization’s needs? Does it align with the company culture?
But what factors should you consider?
The two biggest contributors to training costs will be for the learning management system (LMS) and the training staff’s salaries. A robust, self-service LMS with pre-recorded webinars can minimize the need for large training staff. But, it would depend on your organization’s needs. If your employees need technical training, hands-on practice is ideal. It can be hard to get that from an LMS and your organization may need more trainers to provide in-person, live training. Though virtual reality (VR) and augmented reality (AR) may change that. But of course, both come with higher costs.
If your workforce needs industry credentialing, you will want to factor that into the cost of training. Prep courses, external facilitators, and exam fees will all come into play. You will also want to factor estimated costs of tuition reimbursement. This will be important for higher level roles if you expect your leaders to have masters degrees or professional certifications.
Miscellaneous costs can also add up. In-person training will most likely require some traveling, either for the participants or the trainers. Airfare, hotels, car rentals, and mileage will all be expensed for required training. Don’t forget the costs of handouts and takeaways. The most effective training will give employees resources they can refer back to. Handouts, books, copyrighted toolkits will all have a cost. Also, giving branded swag can be a way to thank people for participating. It shows you value training and will be a promo tool for when employees return back to the office. A coworker will ask them where they got that awesome infuser water bottle or that jacket and you’ll have employees talking about training.
So what’s next?
Now that you’ve considered all the tangible factors that can add up to the cost of training, don’t forget the most limited resource… time. You can never get time back so you want to make sure you’re putting in the right efforts in the right places. Ensure you are doing a thorough needs assessment to create the best training program for your organization. It’s the best way to get your ROI.
Tracking the cost of training can be time-consuming, but tracking your metrics don’t have to be. An HR dashboard makes it easy to calculate your workforce data into metrics. It takes the math, excel reports, and graph creation out of your hands so you can focus on the analytics. Sign up today for a free demo of our automated HR dashboard.