How to Reduce Training Costs Without Cutting What Works

How to Reduce Training Costs Without Cutting What Works

By

Amy Vidor
Learning and Development Evangelist at Synthesia

Companies spend, on average, $846 per employee on “direct learning” each year. You’ve probably seen some version of this benchmark floating around.

Benchmarks are useful context. I just don't recommend using them to guide your budgeting decisions. What you need instead is a clearer view of where your training spend goes, and how to reduce it without cutting the training that works.

I'll walk you through how to build an accurate picture of what training costs for your organization, and then how to identify the changes that will reduce spend without reducing impact.

5 Cost-cutting strategies

  1. Reduce live facilitation. If a session is repeatedly facilitated, consider making it an async offering.
  2. Evolve content creation. Use AI to reduce outsourcing production, while preserving a human-in-the-loop for quality.
  3. Plan for updates. Content will change, and you need to plan for it by designing in discrete modules.
  4. Reduce localization rework. Version content so there's one source of truth that you edit before re-publishing.
  5. Make technology handle your admin. Invest the time in automating everything from registration to calendar reminders.

If you’re looking for a more in-depth guide to budgeting for L&D, I’ve got you covered in this guide._

How to measure your training costs

Before you can cut costs, you need to know where your money is going. I know that's easier said than done.

U.S. companies invest more than $100 billion in training each year, and that spend is spread across cost centers.

Step 1: Document training costs

Gather how much you have spent on:

Step 2: Estimate the totals

Determine total training costs or cost per employee.

Example: a leadership program
If you have an in-person leadership program with about 250 managers and ICs:

Total: $500,000

Step 3: Separate out the costs you don't control

Assess what costs you can remove from your training budget.

Step 4: Calculate better benchmarks

Develop internal benchmarks to ensure accurate assessments aligned with target audiences.

5 strategies to reduce training costs

The fastest way is to stop doing work that isn't driving impact.
That means:

1. Reduce live facilitation

Move repeated live sessions to async formats to cut costs.

2. Evolve content creation

Employ AI to enhance efficiency and reduce costs in content production.

3. Plan for updates

Design training that accommodates updates efficiently and effectively.

4. Reduce localization rework

Maintain one source of truth; update that version for localizing.

5. Streamline administrative tasks

Automate processes to reduce administrative overhead.

How can you tell if these changes are working?

Focus on assessing cost savings and measuring business impact. Track:

How do you build a business case for reducing training costs?

Pick a high-cost program to assess potential cuts:

Costs

Benefits

Assess outcomes through surveys and proxies to estimate financial returns and overall impact.