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Tips To Nail Down Your Employee Training Budget

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The technological world is in constant flux. Today, many organizations take a progressive approach toward employee training. American E-commerce giant, Amazon’s career choice program has been spending around 95% of tuition and fees to train their employees. Over four years, it has reached up to $12,000.  

According to Amazon, everyone must have the opportunity to learn new skills whether at Amazon or elsewhere. Competing Amazon, its rival Walmart U.S introduced a similar initiative thereby investing in personal and professional success. 

How to fix the budget for employee training?

As the lead or HR of the company, you may know that your trainers are lacking skills in a particular technology and they need training. You may also be aware of the average cost rate of employee training. Many of the corporate think that conducting corporate training at their premises costs too much.

But, to their surprise, every training company comes up with different quotations. When you are clear with the insights of the training, it greatly cut short the employee training costs. 

Every company that invests more in employee training reaps the benefits in the form of higher revenue and profit margins. What to know additionally is how to turn the cost into a specified number. That is actually the challenge. 

Focusing on 4 major categories before employee training hire

Employee training is no longer a simple term in dealing with compliance boxes. Instead, the training has become a strategic point for the employees to acquaint their knowledge in respective technologies. In order to encounter the challenge, companies have to focus on specific categories. 

  • Training staff
  • Training tools and technologies
  • Training content
  • Miscellaneous

In the global market, training employees has been hyped. The statistical graph explains the amount spent in dollars by different companies for employee training from the year 2007- 2018. 

If you are a cost-conscious company, then have a look at the pie-chart below. It helps in splitting the cost to the different categories mentioned above. 

Training Staff – the major occupant of your training budget

An effective employee training needs an effective and well-experienced training staff. If your motive is to outsource your training staff from an experienced corporate training institute, do indulge in more research. The corporate trainer or the team you ought to hire must be in charge of developing the training materials thereby providing global courseware. The trainer must also be able to deliver courses on time to the learners thereby initiating leadership among the learners. 

There is no set trainer-to-employee ratio applicable for every company. Instead, hiring a corporate trainer for a considerable number of employees is a good start.  In order to make your employee training worthy, cut down extra costs that add up during the employee hire. It will eat up half of your training budget. 

Training tools and technologies

Selecting training tools and the right technologies play a second-half role in your training budget. According to the chart, around 25% of the budget has been allocated to the training tools and technologies. Whether it is a classroom training or online training, the equipment needed to provide effective training sucks some cost. 

Around 42% of the small business companies have indulged in blended learning which impacts the learners’ minds. It provides learners with both in-person and self-paced training models. Compared to the other types of training modes, blended learning is the proven effective training method. It is important to consider tools that both the methods. 

If you are planning to take up an employee training in the upcoming days, upgrade your mind with many affordable options built-in with the small and medium business people in mind. 

Training content

Training content in a training phase is the most important thing to keep in mind. A training course without training content is worthless. While budgeting for training content, it is important to carefully assess the topics. It carries 20% in your training budget. 

Topics are preferably chosen by the companies. Many companies wish to train their employees under several topics of relevant technology. Hence, the outlook provided by the trainer might help in analyzing whether to add up any extra topics in the content. Starting from classroom to blended training, the training content comes in various forms. It includes paper materials, assessments, slideshow, videos, lectures, and other courseware. 


Apart from the above ones, the employee training sucks down the costs at various miscellaneous things. Few miscellaneous costs that cover in the budget bucket are listed as follows. 

  • Travel costs and per diem for conferences and workshops
  • Consulting fees
  • Tuition reimbursements

If you are running a multinational business, then it is necessary to include the translation or localization costs. Though, you can customize and minimize those costs by acting in your company’s unique way. 

Methods to calculate employee training budget

A glance at the four basic employee training category helps you to have an outline of the expenses needed to train your employees. Spending is not a great deal. But, spending wisely matters a lot. How to know whether we are spending the correct amount for employee training? Here are the two methods to calculate the employee training budget for your organization. 

  • Using total salary
  • Using the number of employees

Using total salary

Prevalently, many companies are following the good rule of thumb. According to that, companies have been involved in spending around 1 to 5% of their total salary cost for training. It depends upon how much their employees are eager in emphasizing training in their organization. 

If you have a magnifying ballpark estimate of your total salary cost in the upcoming world, then you can come up with a good training budget estimate. 

Tying upon the budget with the salary cost will help you to have control of your training expenditure. It also provides you a flexibility that helps in throwing the budget to train others. 

Using the number of employees

According to the Training Magazine’s annual Training Industry Report, small businesses have spent $1886 per learner for training in the year 2017. The report also helps in analyzing the total budget number. Just have a look at the report. 

It gives you the average training cost per learner for your business size. Multiplying it with the number of employees you wish to train gives you the total budget number. 

This method effectively helps in getting up all the learners’ total expenditures. The company will spend a specific amount for every employee to reskill/upskill their knowledge. 

How to save money in employee training

After getting an analytic look at the budget categories and its calculation, it is time to know the tips to reduce the cost of the employee training. It is important to identify the areas that bring potential cost savings and efficient outcomes. It increases the flexibility in the future to analyze the needs and opting for the best and effective employee training sessions according to the arising priorities. 

Here are the key areas where the company can potentially save costs under employee training. 

Leverage user-generated content (UGC)

After an effective corporate training session, conduct small tutorials that benefit the entire organization. Leveraging the reusable training courses help in empowering the best workers and thereby saves money on content creation. 

Kick-start a mentorship program

The mentorship program initiative is the best medium to deliver cost-effective informal training. It helps in improving the leadership skills to the employees. Though it is a small or large organization, the rise in mentorship programs is always a great start for knowledge sharing. 

In times, when it is a challenge to retain good working employees, it is necessary to create a positive work environment. When the employees get frequent knowledge sessions under their respective technology, it helps in effective implementation. By following the ways, the employer can cut short the expenses spent on the so-called employee training.