Cost-Benefit Analysis of Employee Training Program

Subject: Employee Management
Pages: 2
Words: 571
Reading time:
2 min
Study level: Bachelor

Many organizations wish to have the capability of measuring the costs invested in employee training programs versus expected outcomes. A helpful scenario in determining costs and savings is comparing cost per employee against savings or profit per employee. There are steps one can use to ensure that this is done properly. For instance, calculating the training cost includes facilitator fees, course materials, training design, videos and workbooks, equipment rentals, and facilities rentals.

After calculating the costs per employee enrolling in the program, the next step is determining the potential savings. For instance, fewer errors, less equipment downtime, decreased customer turnover, faster equipment startup time, increased collected revenue, reduced recruitment costs, and correct implementation of new customer approaches. Up to this point, we have established a cost of training the employee and the savings that the company will be making because of the program.

Before training, an employee is prone to 200 error rates every month, costing the company $ 250.00 per month. The employee also is responsible for the loss of 6 customer accounts every month, which makes the company lose $ 150.00 more. After training, the error rate reduces to 50 every month, whereby the company loses $ 70.00. The savings that the company will make from training one employee is $ 250.00 – $ 70.00. The training will ensure that not more than one customer account is lost per month, which means that the company will save $ 125.00. The company will save $ 305.00 every other month after training. Assuming all the costs for training one employee are $ 2000.00, within seven months after training, the company will start experiencing profit due to the program in the means of savings. For instance, in 7 months, savings per participant total $ 2, 135.00 which is $ 135.00 more than the cost of training one employee.

Investing in sustained and long-term training as well as development initiatives produces highly skilled employees and extends its benefits towards culture, business efficiency, employee retention, and branding. A vibrant training culture ensures that a company retains its employees at a high rate. Investing in employees to grow and learn alongside a business is one of the retention tools. Training reduces the number of individuals looking for opportunities to grow elsewhere. According to Cost Benefit Analysis for Training, long-term training initiatives result in progressive cultures (2021). Moreover, in compliance with Cost Benefit Analysis for Training, prodigious business culture is not built in a short time but over time (2021). Having a sustained practice of training as well as development within an organization embeds a mindset of sustained growth.

A culture of sustained growth is essential for branding and image. When every employee feels connected to the company and comprehends his or her role, a positive culture is built. When individuals working in an organization continuously learn and grow, the brand can grow since the same individuals become brand ambassadors. Engaged employees are productive and efficient, which benefits the company. When we combine all the benefits results in an organization that works seamlessly, has a greater sense of responsibility towards the company’s growth, and has go-getter attitudes among employees. To place themselves at the top of the market, organizations must find ways to stay ahead of their competition. Training employees is one of the ways that a company can stay ahead of its competition, and looking at the cost/benefit analysis, it is worth investing in it.


Cost Benefit Analysis for Training. (2021). Cost Benefit Analysis for Training. Web.