Corporate Training Costs: Budget Breakdown & 8 Tips for Saving

Corporate training costs are among the most important factors to consider when planning a training program. However, optimizing the cost without ​​compromising on quality is not easy. In this article, we break down the price of corporate training and suggest some tips to help you save on the cost.

How Much Does Corporate Training Cost?

Corporate training prices are often complex to estimate, as they can vary greatly depending on factors like the type of training, delivery method, and the number of participants… The overview below gives a glimpse of the average corporate training cost to help you understand what to expect.

According to Research.com, in 2019, the average investment per employee in training was $1,286, with employees receiving an average of 42.1 hours of training annually. However, by 2023, the Training Industry Report showed a decline in spending, with companies now allocating $954 per employee for training. 

This report also highlighted differences in spending based on company size, with small businesses investing around $1,420 per employee, while midsize companies averaged $751 per employee.

We understand that these numbers and statistics can make you confused. But don’t worry, keep scrolling to know exactly how to calculate the training cost for your business and grasp some tips to save on corporate training costs.

What Factors Influence Corporate Training Costs?

While understanding the average cost of corporate training is essential, it’s equally important to recognize the factors that influence these costs. This allows businesses to make informed decisions when budgeting for employee development. Generally, there are 2 types of costs you need to consider: direct and indirect training costs. Firstly, you can look at the table below to learn the factors for each type.

	Factors	Description
Direct training costs	Training materials	Includes manuals, handouts, online courses, and custom content. Costs vary based on whether created in-house or purchased.
	Instructor fees	Fees for internal or external trainers. Varies based on expertise and complexity (e.g., IT, healthcare specialists).
	Learning technology	Includes LMS, e-learning platforms, and virtual session software. Costs include subscription, maintenance, and customization.
	Facility costs	Costs for physical space for in-person training, such as room rental and equipment setup (e.g., projectors, computers).
	Travel expenses	Covers transportation, lodging, meals, and allowances for employees or trainers traveling for training purposes.
Indirect training costs	Employee wages during training	Employees are paid their regular salaries while training, but this is an indirect cost.
	Lost productivity	When employees are away from their usual work, tasks may be delayed or reassigned, reducing overall efficiency.
	Temporary staffing costs	Costs for hiring temporary staff to cover for employees attending training, including onboarding and training them.
	Ineffective training programs	Wasted resources if training doesn’t meet goals, leading to retraining or alternative solutions, increasing costs over time.

Direct training costs

Direct corporate training costs are those expenses that are directly attributable to the training program, which are typically easier to quantify.

Training materials

Effective corporate training requires various training materials, including manuals, handouts, online courses, and any proprietary content developed specifically for the program. The costs associated with these materials can vary depending on whether they are created in-house or purchased from external vendors. 

For example, developing custom training content tailored to a company’s specific needs can be significantly more expensive than using pre-made, off-the-shelf solutions.

Instructor fees

Trainer costs include the fees for hiring either internal staff or external consultants to lead the training sessions. These fees can vary significantly based on the trainer’s level of expertise and the complexity of the training program. For example, specialized trainers in areas such as IT or healthcare typically command higher fees due to their specialized knowledge and experience.

To calculate the real cost of instructor-led training, you can check out this article. 

Learning technology

This includes the technological tools required for training, such as Learning Management Systems (LMS), e-learning platforms, and software for virtual sessions. Costs often include subscription fees, maintenance, and potential customization. If multiple platforms are used, these expenses can add up significantly.

Facility costs

Corporate training programs that require in-person sessions, such as classroom-based training, workshops, and seminars, typically incur facility costs. These corporate training costs relate to the physical space where training occurs, including room rental fees, setup costs, and any necessary equipment (e.g., projectors, computers).

Travel expenses

Travel costs incur when employees or trainers need to travel for training purposes. It covers transportation (flights, mileage), lodging, meals, and daily allowances. These expenses can add up quickly, especially if training requires participants to travel long distances or if multiple employees are attending from various locations.

Indirect training costs

Indirect training costs are hidden costs that can arise from various factors, significantly impacting overall expenses.

Employee wages during training

Employees participating in training are still paid their regular salaries during this time. This cost is considered an indirect expense because it does not directly contribute to the training’s delivery but is necessary for the employee’s participation.

Lost productivity

A hidden cost of training is the lost productivity when employees step away from their usual work. While they’re busy learning, their regular tasks might get delayed or handed off to teammates, which can affect the team’s overall efficiency.

Temporary staffing costs

Organizations may need to hire temporary staff to cover for employees who are away from their regular duties due to training. Getting these temporary workers up to speed adds extra costs, including onboarding and training them.

Ineffective training programs

Poorly planned or executed training programs can waste both time and money. If the training doesn’t meet its goals, companies might need to spend more on retraining or finding better solutions. Over time, these extra costs can add up without delivering the improvements in employee performance that were expected.

How to Calculate Training Costs per Employee

With an understanding of the factors that affect training costs, the next step is calculating them. This involves factoring in both direct and indirect costs to determine the full financial impact of a training program.

Formula: 

Training Cost Per Employee = (Total direct costs + total indirect costs)/Number of Employees Trained

• Direct costs = Total cost of training materials + LMS fees + trainer fees + facility costs
• Indirect costs = (Hourly wage × Hours of training × Number of employees) + temporary staffing costs + efficiency losses

For example:

If a company spends:

Direct costs:

• Training materials: $1,000
• LMS fees: $500
• Trainer fees: $2,000
• Facility costs: $1,500

Total direct costs = $1,000 + $500 + $2,000 + $1,500 = $5,000

Indirect costs:

• Hourly wage: $20
• Hours of training: 8
• Temporary staffing costs: $1,200
• Efficiency losses: $500
• Number of employees: 10

Total indirect costs = ($20 × 8 × 10) + $1,200 + $500 = $4,200 + $1,200 + $500 = $5,900

Training Cost Per Employee = ($5,000 + $5,900) / 10 = $1,090

Tips to Save on Corporate Training Costs

Corporate training can be a significant investment, but there are several effective ways to reduce expenses while still delivering quality learning experiences for employees. Here are some practical tips to save on training costs:

1. Leverage internal resources

One of the most cost-effective ways to save on corporate training is by utilizing your in-house expertise. Encourage senior employees or department heads to lead training sessions, share knowledge, and mentor others. This reduces costs associated with hiring external trainers and fosters a culture of collaboration and knowledge sharing within your organization.

2. Embrace online learning platforms

Online learning platforms offer a flexible and cost-efficient alternative to traditional in-person training. They provide a variety of courses, from industry-specific to leadership development, at a fraction of the cost.

Platforms like Coursera, Udemy, or LinkedIn Learning allow you to scale training across your organization while keeping expenses low. Plus, it can help minimize learning technology costs as there’s no need for expensive software or in-person sessions. 

But why settle for generic courses when you can have customized content that speaks directly to your team’s needs and aligns with the business’s goals? At F. Learning Studio, we create online learning experiences that are customized, flexible, and cost-effective all in one! Discover how our custom e-learning solutions can transform your training.

3. Implement job shadowing and cross-training

Job shadowing and cross-training are low-cost strategies that don’t require additional investments in materials or external resources. By having employees shadow colleagues in different roles, they gain firsthand experience, expanding their skill sets without extra cost. Cross-training employees also ensures that knowledge is shared across teams, improving overall productivity.

4. Incorporate free learning resources

Many valuable learning resources are available at no cost. Websites, blogs, podcasts, and webinars can provide high-quality training in various areas such as management, software skills, and personal development while drastically cutting down on training material expenses. By curating free resources, you can create an affordable learning environment for employees while keeping training costs minimal.

If you’re looking for a structured way to enhance leadership skills without breaking the bank, download our free ebook – Leadership Training Toolkit. This provides strategies and resources to empower your team effectively.

5. Repurpose existing training resources

Don’t reinvent the wheel—repurpose and update your existing training materials to save time and money. For example, if you’ve previously created a training module that’s still relevant, you can adjust it for a new team or department. Repurposing old content ensures you maximize the value of your training materials without starting from scratch.

6. Adopt microlearning 

Microlearning is a highly effective approach to training that delivers concise, focused content in small, easily digestible segments. Rather than lengthy training sessions, microlearning provides quick lessons that employees can absorb in just a few minutes. This method minimizes both development costs and the time employees spend away from their duties.

Take a look at this example of a microlearning video, where F. Learning Studio uses animation to effectively explain abstract knowledge of integrity and improve the learner experience:

7. Promote on-demand and self-paced learning

On-demand and self-paced learning allows employees to learn at their speed and on their schedule. By offering a variety of online courses or video tutorials, employees can choose the training that fits their needs, reducing the need for costly, time-consuming group sessions. This also allows you to focus your resources on higher-priority training areas.

8. Encourage peer-to-peer learning

Peer-to-peer learning encourages employees to share their expertise, fostering a collaborative and supportive work environment. This informal method of training leverages existing talent within the organization, minimizing the need for costly external trainers and resources.

To encourage this, you should consider setting up mentoring programs or group discussions where employees can learn from each other’s experiences.

It doesn’t end there after you finish budget planning and implementing the training program successfully. After training, it’s time to measure the ROI of the employee training program to identify whether it’s leading to meaningful improvements in performance and profitability. To learn how to calculate the ROI of your training programs, head to our blog on Calculating Training ROI for a step-by-step guide.

​Partner with F. Learning Studio for Cost-effective Corporate Training

Provide affordable and flexible options for corporate training

If you’re looking for corporate training that doesn’t break the bank, F. Learning Studio is your go-to choice. As a Vietnam-based studio, we have a unique location advantage that allows us to offer top-quality training solutions at a fraction of the cost compared to other providers. Whether you need short, impactful animated videos or interactive design for assessments, we ensure the solution fits both your budget and learning goals.

Let’s discuss how we can create effective training for your team—without the high price tag!

Maximize cost-effective creativities

Creativity doesn’t have to come with a high price tag. Our wide range of animation styles lets us craft the perfect look and feel for your training videos, all while staying within budget. You’ll get high-quality, engaging content that captures your audience’s attention without compromising on creativity or cost. Customization is our superpower, and we use it to deliver results that truly resonate. 

To see how our creative solutions come to life, check out our showreel showcasing the impactful corporate training videos we’ve crafted for clients just like you.

Streamlined and efficient workflow

We know your time is valuable, so at F.Learning, we’ve perfected the art of a smooth, efficient workflow. From the moment you contact us to the final delivery, our streamlined process ensures quick turnarounds and no surprises. But there’s more. To meet the demand for continuously updated materials, we also offer a free update for 6 months, depending on your needs.

Conclusion

A good understanding of corporate training costs ensures your budget is used wisely while maintaining high training standards. With the right strategies, your training can be both affordable and impactful. 

If you’re looking for a cost-effective solution to your corporate training concerns, F. Learning Studio is here to help. Contact us today to explore how our creative and budget-friendly training animation solutions can meet your needs and elevate your team’s learning experience.

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