What’s the Cost of Elearning—and Is It Worth It?

If your organization is thinking about replacing some of its Instructor-led Training (ILT) with elearning, you may be charged with justifying the investment. The first thing you’ll need to know is the cost of your existing training programs.

ILT costs usually entail the amount of time your staff invests in developing and delivering the training, as well as the opportunity cost for those attending the training. However, few companies actively document these costs. We recognize that there’s no “one size fits all” solution for documenting training costs. Each organization and situation is unique. However, we’ve developed a four-step guide to help you identify and quantify “hard” and “soft” ILT costs.

Once you get a grip on your ILT costs, repeat the steps below for the proposed elearning. You might be able to streamline the process by marking some items as equal if you think the costs will be the same for ILT and elearning. Then you can calculate a solid figure on the relative costs and better understand if elearning is the right investment for your organization.

Remember that upfront costs may not tell the whole story—ILT training can be more effective for interpersonal topics or small groups, while elearning can be reused, duplicated, and scaled without loss of quality or additional costs. Sometimes, a combination of ILT and elearning works best.

How to Calculate the Cost of ILT vs. Elearning

Step 1

Calculate how much time your personnel spend developing your ILT, then do the same for proposed elearning programs. Remember to factor in your full labor costs, including benefits for each individual. Include time spent developing the initial training programs as well as time spent updating them. Consider including:

  • Subject Matter Experts
  • Trainers/Instructional Designers
  • Graphic Artists/Multimedia Designers
  • Management
  • Consultants
  • Others, such as Peer Review, Legal, Quality Assurance, etc.

Step 2

Calculate your “hard” development costs for ILT as well as proposed elearning, such as:

  • Printed materials
  • Specialty software used in material development
  • Training the trainers

Step 3

Quantify the cost to deliver ILT and elearning. Remember to factor in the cost of the actual training session, as well as surrounding costs.

  • Cost of trainer’s time
  • Cost of attendee’s time (note: elearning tends to cut ILT time in half)
  • Cost of having a consultant deliver the training, if you’re using one
  • Cost of trainer’s preparation time per session
  • Any ILT travel-related costs
  • Labor cost for trainer, employees, and possible consultant
  • Hard travel costs for trainer, employees, and possible consultant
  • Opportunity cost of trainers and employees’ time, such as lost production
  • Cost for facility where ILT occurs
  • Cost of equipment used during ILT
  • Cost of refreshments during ILT

Remember to calculate total ILT and elearning hours by multiplying the length of sessions times the number of sessions. Factor in all sessions, as trainers often repeat ILT sessions for new hires or employees who miss the initial training.

Step 4

Just a few more calculations:

  • Time spent coordinating the training
  • Time spent documenting the training activity
  • Time spent tracking ongoing training
  • Time spent analyzing the training

The True Cost of 1 Hour of Elearning

So just how much time and money goes into creating 1 hour of elearning?

chart cost elearning infographic

The Value of Asynchronous Elearning

What if the estimated costs are close? What justifies a larger upfront investment in elearning? Asynchronous elearning, one of many types of elearning, has plenty of benefits, as the infographic below reveals:

Advantages of asynchronous elearning

Elearning offers significantly lower ongoing costs by eliminating the ongoing cost of an instructor’ time to deliver the training. It also eliminates travel costs, reduces the amount of time learners spend training, reduces training’s opportunity cost, and provides significantly lower administrative costs.

Maximizing an Investment in System or Product Training

Elearning can also maximize your investment in system or product training. New applications and products tend to follow a similar lifecycle, regardless of whether the new item is an application, an appliance, a drug, or a service:

  • Pre-launch. The organization generates excitement among future users.
  • Launch. The organization aggressively promotes the new system, product, or service.
  • Post-launch. The item evolves over time to adjust to user needs and technological advancements.

To maximize the impact of system or product training, organizations should approach training like they approach the design and development of new systems, products, or services.

Pre-launch. Organizations should develop a short training program to educate employees on the new system, product or service and make the training available when they announce its development.

Pre-launch training programs are normally brief, addressing only the item’s primary features and benefits. Specific details are avoided as they may change by launch, and learners are likely to forget the details if there is a long time span between announcement and launch.

If done well, pre-launch training can be repurposed to serve as a foundation for the launch training.

Launch. While we refer to this training as launch training, it can be delivered a short time before the item becomes available, so users have time to complete the training before they have access to the new application, product, or service.

Launch training should expand on pre-launch training and provide users with the information they need to actually use the application, product, or service. The information varies but often includes:

  • The value it will provide users
  • Primary and secondary features and benefits
  • Product details
  • How to use the application, product, or service
  • FAQs and links to additional information

Training developed for an application, product, or service sold by your organization should be made available to your sales force and can also be modified and repurposed to train customer service personnel, other employees, and customers on the new product.

Post-launch. As the actual application, product, or service evolves, so should its supporting training. Therefore, the launch training should be designed and developed with flexibility in mind. This is in especially important for elearning, which can be difficult to adapt if flexibility was not built in initially. Here are some recommendations for designing flexible elearning:

  • Use an elearning authoring tool rather than a programming language like Flash or HTML.
  • Use a modular approach so you can swap out sections rather than revising the entire course.
  • Avoid embedding text in images. Keep text and images separate to make it easier to update.
  • Limit use of live-action video to those elements likely to remain static.
  • If incorporating narration, avoid words or phrases that are likely to change, such as specific model numbers.

Adopting this lifecycle approach to your systems and product training will provide a highly efficient and effective means for training employees as well as customers. It will also help keep their knowledge up-to-date.

How to Get the Right Training for the Right Employees

Just as systems and product training changes with each stage of release, employee training must adapt to employees at different stages. So what type of training will employees need at each level? We highlight different employment levels and their corresponding implications:

Understanding employee levels-phases (1)

Need answers? Download your roadmap to elearning development:

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