Hiring new employees is costly, developing your learners is also costly. (Not having a well-trained staff is a disaster!) So, when you coordinate essential training and development endeavors...it's priceless!
The reality is you can't afford NOT to train your employees. Well trained employees make fewer mistakes, are more productive, understand your organization's culture more fully, and demonstrate an increased commitment and sense of purpose at work when compared to their untrained counterparts. You can also minimize turnover and maintain productivity with a good training program.
So how do you effectively manage training costs? This learning path will guide you through ways to create your training budget and how to monitor costs to justify expenditures. Whether you're an accidental trainer, seasoned trainer, or a leader within your organization, you can gain insight and best practices from the resources below.
Training and Budgeting: Managing L&D Costs
There are several methods you can use to calculate your training budget. One popular formula requires you to calculate a portion of annual salaries to determine your budget. For example: Total yearly salary budget (X) • (1-3%) = Total Training Budget. Another way to calculate the budget involves the following formula: Industry-specific per employee average (X) • (FTEs) = Total Training Budget. The third one is to predetermine training needs, estimate costs, and calculate the cost based on which trainings you will deliver.
Firstly, you should identify the needs of your target audience and meet with your subject matter experts to get input regarding training requirements and content. In order to present your budget, you need to create your project plan which includes your training budget and details regarding the types of expenditures the training will require. In order to estimate the cost of the various trainings you want to offer, solicit quotes from training providers, past trainings, in-house developers and instructors. You should include within your budget the following: wages for instructional designers, instructors, programmers, location/venue, materials and any other personnel or materials needed to create and execute the training. According to Tara Duggan's article "How to Develop a Training Budget", you should consider using a spreadsheet program (like Microsoft Excel) that already has predetermined formulas you can use to ensure you don't exceed your quarterly and annual budgetary restrictions for training.
Let's get creative! Whether your organization is large or small, you can ensure your team is properly trained and well developed. The resources below offer creative means to do so while also meeting budgetary constraints. For example, you can ask managers or team leads to suggest high performing members on their team and utilize their expertise for a partner or peer - to -peer training to develop their respective department. Also, there is a Training Program Costing Example activity below which provides detailed examples of how you can create your budget to cover exactly what you need while closely considering costs.
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