Cost of Training Employees – Here’s All You Need To Know

All business owners must make daily decisions impacting their company’s bottom line. The cost of employee training is one of those costs. Whether fact or fiction, employee training costs a lot of money.

Training employees is an investment you make to ensure the productivity of your business. However, it would be best to consider all the costs contributing to the overall expense of training employees in your business. 

Training employees is vital, as it is an investment for your company and, in time, your money.

Do you wonder whether employee training is worth the expense? This article explains all you need to know about the cost of training employees.

How much does it cost to train employees?

Training is expensive. The Association for Talent Development reports that corporations or organizations invest approximately $1,252 per employee in training and development programs.

The cost of training employees is a cost you have to bear if you want to get the best out of your employees. It may be a big or small cost, depending upon the willingness of your employee to learn and the length of the training.

It is suitable for both parties. The employee gains knowledge, and the employer gets a trained employee who can be used immediately. 

Training is undoubtedly an investment that a company makes in its workers, but it can also be an excellent investment for the workers.

And while it may seem like a high cost to some people, the benefits you can get from training far outweigh the costs. 

Are the costs of training employees worth it?

Your employees spend 80% of their time performing their jobs. Yet, with 37% of employees leaving due to boredom or concern over training time, it’s crucial to ensure employees are appropriately trained.

According to the HR Exchange Network, 98% of employees are more likely to stay with an organization that provides continuous learning.

Furthermore, there is an undeniable link between employee turnover and the cost of training those employees.

When you think about it, the training required for any job can become very costly.

That’s why some experts say an employer should consider if the cost of hiring and training new employees justifies their efforts in finding candidates who will be a good fit for the job.

Training workers cost money, but it can save and create revenue. Workers who have been trained have a better attitude towards their jobs, perform better and stay with the company longer.

They are also less likely to engage in destructive activities, such as theft, damage to the equipment, and poor performance. 

For these reasons and more, you should always consider training your employees.

Factors that influence the cost of training employees 

1. Training cost and company’s size

The cost of training new employees can vary greatly. The cost of training employees directly reflects the company’s size. As the company’s size increases, the cost of training employees also increases.

Employees of larger companies, which employ more hourly workers, cost the company more money to train at the beginning of a learning curve.

This is because the number of hours required to train and retrain each employee is higher for larger firms. 

On smaller scales, employees are less likely to have the same training requirements as their larger counterparts, requiring less time to retrain.

2. Types of training and their classification

Have you ever wondered how to select the right training type or if it even matters?

Consider these statistics: skilled vs. unskilled, multiple skills, and very different retention levels are just a few factors influencing the cost of training employees. 

In some cases, it depends mainly on the trainees, their operating environment, and the nature of your company.

There is a vast variety of training that takes place in the workplace. There are different learning styles, such as confidence-building, team-building, and leadership skills.

3. The level of skills of employees in the company

Knowing the employee’s skills is one of the most important aspects in deciding the cost of training.

Some employees have basic knowledge, while others have little or no knowledge and cannot perform accurately and confidently. 

Because some people lack the skills necessary for a particular task, those employees will require more time, support, and attention to learn. This can significantly affect training costs. 

4. The duration of training

Another significant factor that influences the cost of training employees is the duration of training. If you’re thinking about training your employees, you’ll want to consider the duration of their training. 

For example, traveling to and from the training site will affect the cost. Additionally, it can be expensive if the employee travels for several days for training.

The longer employees have to train, the higher the cost of training. 

5. Condition of facilities and equipment being used for training

One of the costs is the condition of facilities and equipment used for training. It shows in the spent time and money.

If a company has fewer experienced employees in the office, they will have to spend more hours on training.

A high-quality work environment with safe and well-maintained equipment will enable your staff to learn more effectively.

With this in mind, as an employer, you should offer facilities that are the ideal place to conduct training programs.

6. The method of training 

People are unique and have various learning styles, so our training method will tailor your employee’s training to best fit their learning styles.

Learning can be tricky, whether in-person, virtual, or hybrid. Several factors, like the training method, can influence the cost of training employees. 

Through on-the-job experience, an employee can learn the subtleties of the job at a lower cost than through formal training.

However, it may take the employee more time to become proficient. Training and motivation methods that incorporate rewards and motivation are more effective at lowering the cost of hiring employees.

7. Certification requirements

Certification is the standard for recognizing an employee’s skills and qualifications. But certification does have a cost.

In some cases, companies will sponsor the employees’ training, and the employees will need to take tests to validate the skills taught in training. The employee will pay for the training course and tests in other cases.

The type of certification, the course’s length, the training course’s cost, and the cost per employee are all factors that can affect the cost of training employees.

If you do a little research, you’ll see that a software developer’s certification can cost you up to $20,000.

The IT industry uses certifications as one of the most important means of ensuring that employees are appropriately trained and can use their skills.

The reason it’s so expensive is because of the specific benefits that companies reap. 

What are the hidden costs of training employees?

The obvious costs of training employees are the costs associated with hiring, travel expenses, and room and board.

Also, if a business provides a training environment, it may need to lease or update equipment. 

However, there are other less obvious costs associated with training employees. These include the cost savings that would have been earned if you had not sent employees to the training class in the first place.

Here are some examples of the hidden cost of training employees.

  • Research and planning
  • Employees’ salaries while they are undergoing training but not actively contributing to the business
  • An employee’s extra cost for training materials and new equipment
  • Learning from a mentor may take time for an employee
  • Documentation time for administrative and onboarding tasks

These are just a few items that should be considered when considering the cost of training employees.

Many companies do not realize the hidden costs associated with properly training employees.

When a company fails to identify its hidden costs, it will continue to spend and not see a return on its investment.

What are the risks of not training employees?

Training is an investment that can be both cost-effective and beneficial.

Training these employees who are just entering the workforce or multiple years into their careers can provide some of the most significant financial benefits to your business. 

Having untrained employees or those acting outside their authority can cause costly or fatal accidents. Besides these, other risks include but are not limited to:

  • Legal issues
  • Employee dissatisfaction
  • Complaint from customers
  • A decrease in sales
  • Higher turnover
  • Poor work performance

Training employees is not only an investment in the employees but in the company’s future as well. Training new employees help to eliminate a lot of costs incurred by the company.

It is not a one-time job; instead, it is a continuous process throughout their employment. Employees who are untrained and unrewarded are costly to the company.

How can you make employee training more cost-effective?

There are several ways to make employee training cost-effective, yet many companies fail to take advantage of them.

As a result, they enroll in training courses that cost a lot of money when there are less expensive ways to train employees.

Here are tips to help you implement practical employee training without breaking the bank.

1. Use in-house training programs

Save time by using in-house training programs, not external consultants and trainers. In-house training programs are an extremely cost-effective way to provide employee training. 

With in-house training, you can create the program, deliver it, measure its effectiveness, and customize it to fit your organization.

Expertise within the organization is a valuable asset that can be directly translated into greater profitability.

2. Assess the results

Determine whether your training investment is paying off with sufficient accountability and transparency. First, evaluate the changes you see in action.

Then, conduct an assessment to measure progress. Your results might indicate that it was a waste of time since they didn’t follow your instructions. 

However, if they followed the instructions, you might try a different approach next time. Or you might do in-depth training on that topic and then re-test them. 

3. Take advantage of “free” training available to your employees

Take advantage of the free online training videos available to your employees. It’s easy to use, interactive and allows them to work at their own pace.

Your employees will enjoy learning from the comfort of their desks or workstations. Plus, this training is a time-saver compared to setting up classroom-based meetings for employee training.

Offer these unique services as an incentive for your employees, or include them in standard benefits packages that already include company products and/or services.

4. Leverage existing internal resources

For creative teams to succeed, managers must demonstrate a commitment to employee development in many forms.

A PowerPoint or a piece of paper with bullet points on tips and strategies to improve employee engagement might suffice. 

Organizations must use existing internal resources and talent pools to create team-based development models that solve employee problems. 

5. Re-purpose and re-use online training content

Freelancers and small businesses often lack the proper resources, time, and expertise to train their employees.

Over the years, I’ve found that the easiest way to train employees is to make existing training content available as an on-demand product.

Don’t waste time and money training employees from scratch; re-use content from other programs.

Freed from the time constraints and learning styles of traditional classroom-based training methods, this format allows for easy organization and relatively free learning. It has a proven record for cost benefits.


How can employers budget money for employee training?

The answer is simple: find effective ways to cut costs as much as possible and choose programs that offer real value.

Which is the best time to plan for employee training?

Training should be planned for before the start of the new position, or at least when the position is created.

Since exercise is often structured as a series of learning modules over a timeframe, it’s best to let this planning process begin before you need learning modules.

Final Thoughts 

​Employers should invest in the training of their employees. It is the right thing to do because it improves their business.

Training an employee costs you time, money, and resources, and to justify such an investment, it is required that you see returns​. 

Employees who receive proper training ​will produce better results, be more productive, and contribute to creating a positive company culture.

Finally, I hope that this article will help give you a broad overview of how to train your employees. 

If you’re interested in learning more about improving your employee training, you should also check out the article that highlights employee training methods for workplace training. Indeed, employee training is a pivotal tool for organizational productivity.

Thanks for reading.