The Real Cost of Training


finance Inc Magazine author Robert Hoffman wrote an article many years ago about the cost of training the workforce in a company or an organization. While many companies have switched on an online system to lower training costs since then, many still train their people the traditional way. In addition, training is seen as a cost center in companies, with a last-in-first-out approach. As soon as a company sees signs of tough times coming up, the training program is cut. This creates a vicious circle in the company because untrained employees are less effective and thus less likely to turn the company around. If companies use the right tools, an online training solution can be just as effective as any other kind of training, and lower costs at the same time. Companies will also get the added benefit of useful data that helps them understand their employees more thoroughly.

We are going to use Robert Hoffman’s article to explore the cost of training once again, but modernize it with the latest solutions available today. This article is for those companies, schools and organizations that are looking for an online or even a hybrid solution but need more information about the training costs that will be incurred or the savings they will make.

  1. Facilities: Where will the training be conducted? Are hotel rooms or a meeting space required? If the training is Web or computer based, are specific resources dedicated to the equipment, utilities, software and hardware maintenance? Are participants reimbursed for lodging when they attend overnight training? — These are some of the biggest expenses with training and grow exponentially as the organization gets bigger. But there is hope. Courseplay is a web based solution, where we take care of the server, equipment, utilities, software and hardware maintenance. Clients only need an internet connection and a device (any device) to access the training program. They can access the program from anywhere. We charge on a pay-per-use basis (see pricing) and clients can upload their own programs for free or we can help them. Isn’t that convenient?
  2. Instructors: Are facilitators paid a salary, per diem, or billed by an outside firm? Are trainer expenses considered? Does the company have to pay to certify the instructors or pay any license fees to use the materials? — Booking instructors to train employees every time can get expensive. What if you just booked your instructors to record the training content once, and let the content do all the work? We can complement your in-house or outsourced training team to create tailor-made online training content for your organization based on our tried and tested ‘Learning Principles’. If you don’t have a training team, we can connect you with our own team to get the job done!
  3. Participants: What are the combined salaries and benefits costs that will be dedicated to the time spent on training? What is the price for the time spent out of the office, at seminars, traveling, or preparing for training while still at work? — Many times the training costs aren’t justified because of the loss in productivity the participants face in order to get trained. On average, companies spend 2% of the employee’s total cost-to-company on training. If the training costs are greater than that, it isn’t worth it to train the employee. Plus, if the employee leaves soon after being trained, not only is the expense wasted, the entire benefit goes to your competitor. With Courseplay, the cost of training comes down, way down, so that the benefits of training far outweigh the costs.
  4. Material format: What type of materials will be used? Is the media, books, tapes, CD-Rom, Web-based or video? How will the material be obtained? Any shipping, packaging, or transmission costs? If the material is developed in-house is the talent available or must the company recruit the technical expertise? Will the materials still be timely and technologically relevant when the training is actually delivered? If not, what are the redesign costs? — Yet another expensive proposition. At Courseplay, we give clients the option of uploading their own content, licensing from our Marketplace, or using the services of our team to create bespoke courses just for them. Content can be updated as and when needed. No shipping costs. No hassles.
  5. Communication and marketing: Will materials be produced to generate interest in the training? Brochures, pamphlets, direct mail, postage, and Web sites all have development costs in addition to material cost. Will time be spent by senior managers selling the training internally? Will employees be actively solicited through kick-off and information meetings? How much time will be spent learning about the training? — Courseplay is a digital training tool. Which means that while communication and marketing costs are minimal, the features are baked in to the application. Senior managers can assign courses to their team as goals and track their progress on our dashboard. Administrators and instructors can post category specific announcements to provide important updates on courses. Development costs are zero as the system comes ready-made for our clients. In addition our platform is designed to be engaging so that learners are not bored and they keep coming back. Just plug and play!
  6. Tuition reimbursement: What is the cost of the actual benefit as described in the company policy? What is the level of utilization by the employee population? What are the costs of communicating the program and processing the benefit? Does the company policy exclude reimbursement for unsuccessful completion of course requirements? — These are very important issues that factor in to the training costs indirectly. Fortunately, Courseplay allows clients to manage and measure the utilization as well as the benefit of the training program. Our reporting dashboard allows clients to easily see the progress each participant has made in each course. We also conduct delayed impact analyses to measure the benefit of our training programs in the workforce.
  7. The learning curve: How long does it take for the employee to get “up to speed?” What are the adaptation costs, the costs of potential mistakes while in the learning process? If the employee is in a production type situation, what is the cost of lost production on an incremental basis, if the employee had been fully trained from the start? — Courseplay allows course creators to create pre-course surveys before a course starts to gauge the pre-requisite knowledge that a participant may or may not have to continue with the course. Speaking of learning curves, our platform is designed using interface elements from websites that our users are already familiar with. We don’t need to train you on how to use Courseplay because you already know how to use the platform!
  8. Productivity inhibited: What would the employee be doing if they were not taking time from their regular tasks to be trained? Would more income be generated for the company? How would that time be used more profitably or effectively? Could the time have resulted in the development of new accounts or products, faster production, or greater organizational efficiency? — Courseplay has long wondered the same thing. With Courseplay, your learners can access course materials from anywhere. They can train while on their daily commute, or during free time at home or during down time at the office. Courseplay works responsively on all devices. We offer tailor-made applications that can complement your training platform to measure additional metrics that would otherwise be hard to capture.
  9. Company culture and expectation: Some organizations have massive expectations from the image and culture they communicate through their training experience. Training may dominate company culture and be a catalyst for many associated programs that are developed to enhance the training experience. Promotion and reward systems may be geared towards the training effort. Incentives may be given when training is completed or goals which training addresses are attained. All of these expectations result in higher per-capita costs — per employee. Additionally, because training intense companies tend to use the most sophisticated methods and expensive materials, the per-capita cost may be far greater. — This is a non-issue for Courseplay. Courseplay can be used in any organization in any way they like. Our job is to simply reduce training costs and increase the benefit companies get by using a simple yet powerful training platform.

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