Adelina Karpenkova
14 Effective Ways to Reduce Employee Training Costs
- Published: June 28, 2023
On average, organizations spent $1,111 per employee on training-related costs in 2023. While learning and development (L&D) is critical, it’s understandable that many companies want to optimize their training budgets in times of economic uncertainty.
The question is, how do you reduce your training costs without compromising quality or training effectiveness?
This article explores 14 strategic ways to minimize the cost of workplace training spend, while still maximizing the impact of your employee training programs.
What are the best ways to reduce employee training costs?
- Reduce the amount of training material
- Keep your eye on your workforce’s knowledge gaps
- Put training needs assessment on autopilot
- Repurpose existing resources
- Use eLearning via employee training software
- Implement a digital adoption platform
- Explore free on-demand learning resources
- Implement microlearning
- Automate content creation
- Unlock the benefits of artificial intelligence
- Outsource certain training activities
- Encourage knowledge sharing and peer-to-peer learning
- Constantly improve your training programs
- Conduct a cost-benefit analysis of training initiatives and cost-reduction strategies
Direct vs. Indirect Employee Training Costs
When we talk about the costs of employee training, we think of the time and money needed to develop training materials, hire trainers or instructors, rent training facilities, and purchase learning management systems or other L&D-related tools. These are direct training costs.
But there are also hidden costs of employee training. These costs can arise from various factors and can have a significant impact on the overall training expenses. Indirect costs include:
- The time employees spend participating in training programs.
- The time it takes to adopt new practices and get up to speed.
- Reduced productivity as a result of work process disruption.
- The administrative tasks involved in organizing and managing training programs, including scheduling, registration, logistics, and support services.
- The cost of monitoring and evaluating the effectiveness of the training, conducting assessments or surveys, and analyzing the data collected.
When you get down to optimizing your training costs, you need to consider both direct and indirect expenses. Only then can you achieve the desired ROI on your training investments.
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14 Effective Ways to Reduce Your Organization’s Training Costs
To help you allocate your L&D spend better, here are 14 proven strategies to reduce employee training costs without sacrificing quality.
1. Reduce the amount of training material
Often, training programs are filled with excessive content that doesn’t add value to your employees. Not only does the production of such content take resources from your learning and development (L&D) team but also trainees have to spend a lot of time to consume it, which translates into indirect training costs.
The simplest way to cut your expenses is to stop over-producing learning resources. Focus on delivering concise and targeted information that directly aligns with the learning goals.
Consider adopting a modular approach to training, where you break down the content into smaller, more manageable chunks. This allows employees to access specific modules as needed, rather than going through lengthy training sessions that cover unnecessary or repetitive information.
2. Keep your eye on your workforce’s knowledge gaps
When it comes to employee training, doing it just because “everyone does it” isn’t the right approach.
Without analyzing your employees’ knowledge gaps, you can’t determine where exactly the training needs are. As a result, you end up investing time and money in training programs that don’t address the real needs of your organization. In other words, you waste your resources.
That’s where training needs assessment and skills gap analysis exercises comes in. These learning analysis processes help you identify the gaps between the skills or knowledge your employees currently have and the ones they need. It also helps you tailor your upskill training programs to address those specific gaps, ensuring that your investment is targeted and impactful.
3. Put training needs assessment on autopilot
Performing training needs assessment manually requires significant effort to collect, analyze, and interpret data from various sources. As your organization grows or faces frequent training needs, the manual approach becomes increasingly inefficient and difficult to scale.
You can cut your employee training costs by standardizing and automating training needs assessment. One of the ways to do so is by implementing technology, in particular AI-powered software, that puts the process on autopilot, saving time and resources.
Dedicated skills management platforms focus on understanding and visualizing the data on your team’s skills and abilities.
Software like MuchSkills and Sloneek performs real-time skill gap analysis and creates a competency and skill matrix, uncovering insights into your team’s strengths and weaknesses. All you need to do is to define the skills you want to monitor for each department or role, and the platform will facilitate the rest of the work.
4. Repurpose existing resources
Do you want to reshape your employee training program? Don’t rush to start from scratch. You may already have plenty of helpful training resources that you can repurpose in your new program.
If your previous L&D initiatives proved inefficient, it doesn’t mean they’re bad – it means you need to adjust the format to meet your employees’ learning styles. You can use written materials to create engaging video courses or turn workshop recordings into an extensive knowledge base.
With a DAP like Whatfix, L&D teams can create contextual in-app guidance and self-help support resources that overlay on their digital applications. Whatfix can then automatically export these learning materials into various formats, including PDFs, videos, PPTs, and documents.
5. Use eLearning via employee training software
Still haven’t switched to eLearning? You must be spending a lot in direct and indirect costs on in-person training.
By implementing eLearning authorting platforms such as TalentLMS or EdApp, you can digitize your training process and reduce associated expenses. These digital learning platforms offer a range of features that support the entire training journey, from employee onboarding to ongoing upskilling.
And best of all, eLearning gives your employees an opportunity to refer back to digital learning content whenever they need it. It boosts knowledge retention and improves training efficiency, lowering the costs of ongoing training.
6. Implement a digital adoption platform
Thirty–two percent of your company’s SaaS spend is wasted. The problem is, your employees don’t realize the full potential of your business toolkit and underutilize a lot of helpful features.
You can try to address it by hosting regular technology workshops and developing extensive training materials, but it’s inefficient and expensive. You can cut software training costs by adding a digital adoption platform (DAP) to your tech stack.
Whatfix DAP provides enterprises with a no-code editor to create interactive and context-sensitive guidance directly within the software interface. It assists users in real-time by offering step-by-step walkthroughs, tooltips, and on-screen prompts that highlight the relevant features employees navigate the software. It also aggregates your company knowledge and IT support content into an embedded self-help wiki that overlays across your digital applications, like your CRM, ERP, HCM, and more.
With Whatfix, enterprise insurance provider Sentry saved $1M in training resources (both internal and customer-facing) across content development and support, while also providing better, more contextual guidance to its sales team, policy administraters, and claims processers that improved productivity and create a better customer experience.
“We leverage Whatfix in-app guidance for all aspects of the insurance user experience, from orienting new hires to delivering advanced skill development with our tenured associates. It also provides moment-of-need support for our associates in new internal systems as well as external facing applications for our customers,” said Colleen Behnke, L&D specialist at Sentry Insurance.
Software clicks better with Whatfix's digital adoption platform
Enable your employees with in-app guidance, self-help support, process changes alerts, pop-ups for department announcements, and field validations to improve data accuracy.
7. Explore free on-demand learning resources
The internet already stores a lot of valuable information that can supplement your training programs. Tap into the wealth of knowledge available online.
Many reputable websites, blogs, and educational platforms offer free access to high-quality learning resources on diverse topics. Hand-pick courses, webinars, and articles that align with the specific skills or knowledge areas your employees need to develop. Create a dedicated L&D channel where you’ll be sharing those resources as you find them.
You may also make a list of trusted websites or online course providers that offer relevant content and provide it to your employees as a reference point, encouraging them to explore topics that appeal to them most.
There are a lot of free resources on Coursera — you may start from there. For marketing and sales teams, HubSpot Academy offers free courses and certifications. Harvard Business School produces a lot of on-demand content for leaders and managers.
8. Implement microlearning
Microlearning is a learning approach that delivers short, stand-alone pieces of content that take little time to consume. It breaks down information into smaller, more manageable units. These modules typically range from a few minutes to around 5-15 minutes in length.
Microlearning offers several benefits in terms of cost reduction. Firstly, it eliminates the need for extensive development of lengthy training materials. Instead, you can create short and specific modules that address specific learning objectives.
It also reduces the time and resources required for employee training. Since modules are short and focused, employees can access them as needed, minimizing disruptions to their work schedules.
To implement the approach effectively, consider microlearning platforms like 7taps or iSpring Learn. These platforms enable you to develop interactive microlearning modules and enhance them with videos, quizzes, and gamified training components.
9. Automate content creation
Whenever you need to write or record a guide, ask yourself whether there’s a way to do it automatically. There are plenty of software systems that can help you automate content creation by capturing and documenting while you do the work.
Consider the following tools:
- Loom for creating instructional videos and screen recordings. This tool allows you to capture processes in real-time, making it easy to create engaging video content for training purposes.
- Scribe for step-by-step guides and process documentation. With Scribe, you can automate the process of capturing and documenting workflows, procedures, and instructions, saving valuable time and effort.
10. Unlock the benefits of artificial intelligence
Generative AI is proving its advantages in many industries, and L&D is no exception.
With generative AI, you can reduce the costs of developing new training content and repurposing existing pieces. Here’s how:
- Intelligent chatbots. AI-powered chatbots go far beyond customer support now. You can implement one to interact with employees, answer their questions, and provide guidance on training materials. These chatbots can be available 24/7, reducing the need for human intervention and saving costs associated with providing dedicated support.
- Automated content creation and repurposing. AI can automate the process of creating training content. Natural language processing algorithms analyze existing training materials, extract key information, and generate new types of content in a fraction of the time it would take humans to do so. For instance, Scribe AI fills your auto-generated step-by-step guides with informative captions and descriptions — all you need is to enter clear prompts.
- AI-driven insights. AI can analyze large volumes of people data to help you set the direction for your training programs. You can use it to analyze your employees’ skills, identify skill gaps, and determine the most relevant and impactful areas for training and development.
- Content translation. By using AI to translate training materials into multiple languages, you’ll make them accessible globally and speed up the learning process.
Software like Sloneek AI can facilitate the most time-consuming tasks in your employee training process, from answering common questions to mapping out employees’ skill sets.
These are just a few use cases for AI in L&D. There are many more emerging trends that will revolutionize the training industry in the next few years. AI-powered video creation and virtual reality (VR) training are on that list.
11. Outsource certain training activities
Consider outsourcing specific training activities to external experts or training providers. This can be a cost-effective solution, as you won’t need to invest heavily in developing in-house capabilities.
A reputable consulting company in the relevant niche will offer you access to customized training solutions tailored to your organization’s needs, ensuring high-quality training delivery.
This approach is particularly effective for situations that require a deep understanding of industry-specific regulations and standards, such as compliance training.
How to Develop an Effective Employee Training Program
12. Encourage knowledge sharing and peer-to-peer learning
Promoting a culture of knowledge sharing and peer-to-peer learning within your organization will cost you nothing.
Make it easy to exchange insights by using platforms and tools that facilitate knowledge sharing among employees. Implement internal knowledge sharing platforms, such as intranets, wikis, or collaboration tools, where employees can contribute and access relevant information.
Collaborative systems like Nuclino and Notion offer simple tools for teams to share ideas, collaborate in real-time, and organize knowledge instantly.
13. Constantly improve your training programs
Regularly updating your training programs prevents them from becoming outdated and costly to update in the future.
Revisit your training programs once in a while (at least every year) to identify areas for improvement, incorporate new knowledge and technologies, and ensure that your training remains aligned with the evolving needs of your organization. This proactive approach will minimize expenses and disruptions to your organization’s learning initiatives.
14. Conduct a cost-benefit analysis of training initiatives and cost-reduction strategies
Is your cost-reduction strategy effective? Conduct a thorough cost-benefit analysis to determine the return on investment (ROI) of your training programs and see if they need further optimization.
Start by identifying all the costs associated with your training initiatives, including development, delivery, technology, and administrative expenses.
Assess both the tangible and intangible benefits that result from your training programs. Tangible benefits can include increased sales, improved performance metrics, or reduced errors. Intangible benefits may be enhanced employee morale, increased job satisfaction, or improved teamwork.
Enable your employees with in-app guidance and contextual self-help support with Whatfix’s digital adoption platform
With Whatfix’s innovative DAP, you can empower your employees with in-app guidance and contextual self-help support, transforming the way they learn and navigate through digital tools and applications.
Instead of spending hours introducing employees to new systems or driving software adoption on the organizational level, you can offer interactive guidance directly within the software interface.
Through step-by-step walkthroughs, tooltips, and product tours, employees receive real-time assistance, eliminating the need for extensive training sessions and support from trainers or IT departments.
Whatfix helps organizations reduce training costs associated with onboarding, software training, manage change, adhere to compliance, and providing on-demand IT performance support.
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