How do you calculate training costs?

1 Training cost formula

The most common way to calculate training costs is to use the following formula:

Training cost = (Number of trainees x Cost per trainee) + (Number of trainers x Cost per trainer) + (Training materials and equipment) + (Travel and accommodation) + (Overhead and administration)

This formula gives you the total direct and indirect costs of delivering a training program. You can use it to compare different training options, plan your training budget, and estimate your training return on investment (ROI).

2 Number of trainees

The number of trainees is the number of people who will participate in the training program. This can vary depending on the size of your target audience, the availability of your staff, and the format of your training. For example, you may have more trainees for an online course than for an in-person workshop. You should also consider the turnover rate and the need for refresher training for your trainees.

3 Cost per trainee

The cost per trainee is the amount of money you spend on each trainee to enroll, attend, and complete the training program. This can include fees, tuition, registration, certification, assessment, and evaluation costs. You should also factor in the opportunity cost of the trainee's time, which is the value of the work they could have done if they were not in training.

4 Number of trainers

The number of trainers is the number of people who will design, deliver, and facilitate the training program. This can depend on the complexity, duration, and modality of your training. For example, you may need more trainers for a blended learning program than for a self-paced online course. You should also consider the qualifications, experience, and reputation of your trainers.

5 Cost per trainer

The cost per trainer is the amount of money you spend on each trainer to hire, train, and pay them for their services. This can include salaries, wages, benefits, incentives, commissions, and bonuses. You should also factor in the overhead and administration costs of managing your trainers, such as recruitment, supervision, evaluation, and feedback.

6 Training materials and equipment

The training materials and equipment are the physical and digital resources you need to create, deliver, and support the training program. This can include books, manuals, handouts, slides, videos, audios, software, hardware, platforms, tools, and devices. You should also factor in the maintenance, upgrade, and replacement costs of your training materials and equipment.

7 Travel and accommodation

The travel and accommodation are the expenses you incur to transport and lodge your trainers and trainees for the training program. This can include airfare, car rental, gas, parking, taxi, bus, train, hotel, motel, Airbnb, meals, and snacks. You should also factor in the travel time and the impact of travel on the trainer's and trainee's productivity and well-being.

8 Overhead and administration

The overhead and administration are the costs you incur to run and manage the training program. This can include rent, utilities, insurance, taxes, legal fees, accounting fees, marketing fees, and other miscellaneous expenses. You should also factor in the opportunity cost of the resources you allocate to the training program, such as staff, space, and equipment.

9 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?