Save Training Costs By Choosing Long-Term eLearning Solutions
Let’s say your company employs 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…
To Save Training Costs and Simplify Employee Training is Not Easy With Classroom Training
As 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 many learners have actually completed the training?
- If some employees did not complete the training, then how far have they progressed?
- Is there a plan of action for repeating the training if needed?
- Is the company’s growth and direction proportional to the cost of training?
(Top management will expect answers to these questions when you are done with the training, so it’s best to prepare a response in advance)
Right off the bat, you’ll realize that it is difficult to furnish decent answers to some of these questions. And even then, you may face issues with determining the real ROI!
For example, determining how you plan on repeating classroom training once it is over is a big question. Or, how would you know about the employees who did not complete their training and how much have they actually progressed? Additionally, is there an environment for employees to test what they have learned without having to interact with the actual software?
Such answers are difficult when you do not have a tracking mechanism that records data for your analyses, however, knowing the answer to these questions is the link between moving from conducting a training program to actually ensuring it succeeds.
This is where you may want consider the other options with regards to conducting training and collecting data as an answer to the management’s questions and probably do it all while keeping costs down!
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 are a lot of calculations:
How much would it cost to train 100 employees over 45 days with 5 unique 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 need to train 5 teams. So start by multiplying 2 hours into 5 teams and we arrive at 10 hours a day. With the trainer charging you $28 we need to pay the trainer $28 * 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 unique teams with unique needs to operate the software. Some teams may need basic training while some may need advanced training, which results in some teams needing more advanced training which may cause the hourly rates to increase or the duration of training to cross the 45 days mark! Also, we have not accounted for the cost to hire a venue or the cost of traveling learner and trainer, 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.
(These are actual problems that plague the face-to-face training industry right now)
It’s pretty evident that considering the initial investment of $12,600 as the ‘only cost’ to train employees is not logical. 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 renting a training venue or accounting for traveling employees!
This is where eLearning-based electronic training overachieves.
eLearning Will Save Training Costs and Simplifies Employee Training by Reducing Long-Term Costs
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.
Now let us consider the average cost per hour to develop an eLearning course in 2021. That figure ranges from anywhere in between $5000 to $12,000. In our case, we need a simple eLearning course to explain how a software works. This means we do not need any fancy illustrations or explainer videos and so forth.
What we really need is a robust online training course which mostly comprises of on-screen recordings and voiceover with ample of examples and assessments. So let us consider the cost to be around $7000 for an hour of basic software training eLearning course.
Ok, now let us take the average eLearning course duration to learn something as vast as SAP. It is about 3 hours on Udemy with almost 2,585 happy learner ratings. So, in our case, we need to train 5 teams using 5 unique eLearning courses which are 3-hours each. That makes the total hours of eLearning to be developed at 3 hours into 5 unique courses which is 15 hours. Now multiply 15 into $7000 (average cost of a 1-hour eLearning course) and we get $105,000.
So basically, it costs $105,000 to build 15 hours of eLearning to train 5 teams of 20 members or 100 total employees. Now add the annual cost of licensing an LMS to host this training which is $6000 + $105,000 amounting to $111,000.
So the cost to train every existing employee + new employees + those who couldn’t finish the training is $111,000 for 12 months of training, so divide $111,000 figure by 12 months of the year and we actually end up with $9,250/month for 100 learners.
What?
That’s right. You were originally paying $12,600 (cost of venue and specialized training 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.
Whereas…
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.
The Approach To Truly Save Training Costs and Simplifies Employee Training Is eLearning!
And this is visible by looking at the monthly costs of training + the abundant benefits that you can derive from them!
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 ROI!
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 contact@enyotalearning.com or fill this form and we’ll reach out to you shortly! Also, test our LMS – Abara LMS for thirty days free!
