The success of your employees is interconnected to the success of your organization. The conjunction of ROI and awareness to create training employees is undeniable.
Sure, new employees on board or those who have started to undertake new job responsibilities require proper training to increase productivity.
That said, calculating the cost of training employees can become complicated depending on the nature and size of an organization.
Total Cost Structure to Train Employees
As per the Training industry report, the average cost of training an employee amounts to $1,075. But the overall cost structure has increased with each passing year that means more expenditures for the organization.
Moreover, the cost of training employees is divided into multiple factors such as time and use of material. The more time an employee spends on training sessions, the higher the cost of training will be.
The managerial budget for raining cost is set at $188,000 by major firms while the employees receive 46.7 hours of training. Also, it has been studied and suggested by experts that the success of a business and training of employees is interlinked.
The formula to calculate total training cost per employee equals your total training expenses divided by a number of new employees.
What about Hidden Costs?
The cost of training employees can’t be calculated without outlining some of the hidden costs such as low productivity, time to classify administrative paperwork, impulsive turnover, irregularity of supplies to employees, and attention span of managers.
It is up to the companies to tailor the aforementioned hidden costs as per the need of the employees. Today’s job market barely resembles the previous decade. This shift often puts companies in a state of dilemma to bear the extraneous burden of a high turnover rate.
Look Out for Two Variables
It is true – the employee training cost is higher for small companies as compared to large entities. The time factor, however, tends to be more elastic for large firms. Similarly, the nature of an organization plays a key role to determine training cost.
Here’s the thing; not every employee will learn and adapt at the same speed. Therefore, the variability of the cost also depends on whether the company wants specialized or extensive training sessions.
Freedom to Choose Training Programs
Although small businesses are limited to apply one employee training method, large corporations have the flexibility to pool out the right training type for their employees.
How to Reduce the Cost of Training Employees?
First, companies can deploy a successful repeatable mechanism program for new employees. And the prime focus should be to utilize as much on-the-job training as possible to increase visibility and communication.
Small things matter – And that’s why microlearning could become the new savior of a company to train employees at a minimal cost.
The Last Word
A fast, effective, and layered training method would inevitably lead to a lower turnover rate. Hence, organizations need to weigh the skills of selected employees to establish parameters that align with the correct method.