Whether you’re bringing in a new employee or providing training for existing ones, you must always take into account the budget and how much you will spend training them. Trust us when we say you wouldn’t want to scrimp on your employees, as they are the backbone of your organization and they are the ones driving success. They require training to have access to relevant knowledge to perform to the necessary standards, may it be in compliance training courses among other topics.
Employee training will come at a cost, and a necessary one at that so you can retain talent while staying competitive. Take a look at the factors involved when it comes to how much it takes to train employees.
How Much Do Companies Spend on Employee Training?
The Association for Talent Development shares that organizations spend about $1,252 per employee on average for training and development initiatives.
While this is a useful starting point and provides insight into the potential cost of employee training, remember that it’s just an average. There are other factors to consider that influence the total spend on employee training, like:
Company Size
One major factor influencing the training cost is your company size. The larger a company, the lower the cost of training employees become. The smaller a company, the higher the cost. Sure, there are fewer people, but training will become more disruptive to operations and smaller businesses lack access to economies of scale.
Employee Skillset
The amount of training employees need will depend on their existing knowledge and skillset, and this would vary from employee to employee. For example, in cybersecurity learning, one employee may know more than another, while others might begin at the same knowledge level and skill set.
Moreover, some people may learn quicker or slower than others, which would influence the total cost in terms of the time invested into training. Those who require further training will incur a greater cost.
Type of Training
Different kinds of training would have different costs.
Do you train employees using the traditional classroom-style raining? Then an external training provider will deliver learning, which would involve labor costs. Employees may also have to travel to the center for training. That’s why companies are now veering away from instructor-led training.
Some companies also opt for on-the-job training or via learning technologies from online training platforms. When using technology-based training, the costs are significantly lower since you won’t pay for instructors to teach for the day.
Productivity Loss
And lastly, time spent training will incur a loss in productivity, as employees cannot spend their time training and working simultaneously. The amount of productivity lost will boil down to two major factors: The number of people involved in the training and how long training takes.
Wrapping It Up
Besides the factors mentioned above, don’t forget about hidden costs like supplies (printing and food), travel time, transportation, and time of the employees and supervisors, among other admin costs!
