On this site, I have mainly discussed about the online training and learning, in order to provide my readers with valuable information in this regard. Though, I always mentioned that online modes for training and learning are becoming the norms of the day, yet, many stakeholders involved in the training process, either online or offline; do hold concerns about the training cost. Not just their concerns are the gist of this article, but current economic scenario also bring some additional concerns in terms of training funds availability, in particular, when additional funds are required.
Usually the budget constraints compel the training departments to adjust with whateverthey have got in their hands. However, no matter whatever budget you have in your hand, and what the scale of your department is, you must be able to distinguish fixed and variable costs in order to have a better idea of your overall cost. In view of its importance, I would be focusing on these costs.
Let me discuss the fixed training costs first. These are the costs that you would incur for sure at any point. Since these costs are likely to remain same, you can estimate the final budget in accordance with them. Examples of fixed costs include pay your staff takes. It is relatively fixed and at a point when you want to hire additional staff, you can easily count on it to make estimations and projections. The equipments used for training on a frequent basis, also represents a fixed cost. It is just like office accessories and equipments such as PCs, laptops etc that you buy and pay for one time. In context of training, these equipments include computers, overhead projectors, LCDs, white board and stationary etc. Though these items incur fixed cost, but their maintenance should also be considered. For example, the LCDs and light bulb are quite expensive and their replacement might be needed quite a couples of time within specific time period.
You can determine the costs by finding out the life span of these items and their replacement needs. Sometimes, a huge loss like computer systems’ burn out due to fluctuating voltage, might lead to an expense, adding thousands of dollars in your overall cost. Take overhead as your fixed expense. I believe that being a training manager; you must have an idea of the cost of maintaining your training locations. These costs take into an account the mortgage payment, rent installments and other expenses that accompany this cost such as interest. Utility cost can also be included in your fixed costs list, however, make sure you have proper estimations in case of extremely cold or hot weather. In addition, you can lessen the burden of this cost by turning off the facilities like timed thermostats and air conditioners when they are not in use. This way, a great part of your utility cost can be saved, resulting in increasing worth of your training department. Planning your programs, can also be a part of your fixed cost. By planning and determining people in your upcoming session, cost of materials and outsourcing can be determined at the moment.
I hope I have clarified fixed cost in a training context, and you would have a better idea of developing and implementing your training budget. Let’s discuss variable cost, which requires even more planning. If you pay cost of bandwidth based on the number of your attendants, this would be treated as a variable cost. By looking at your average user number in previous years, you can surely determine in advance the number of users for potential online courses, so as to manage your cost. It is better to end up with additional units than turning people away due to shortage. The additional units can be utilized for future training or courses.
In terms of material, costs can also be variable. You can also think of programs like new hire training as a variable cost. May be you are aware of your firm’s turnover, but on the basis of that can you determine unexpected jumps in this factor? If you know the business plan and vision of your organization, you are able to plan material cost easily. One approach that I have personally adopted to deal with cost is purchasing material as required and planning further with time. I am sure you won’t like ending up with bunch of outdated manual.
I would conclude with the information about large variable costs like acquisitions, mergers and reductions. If you have an idea in advance regarding this, you can easily plan your cost accordingly. The entire story revolves around your intuition power and advance planning. Fixed and variable costs are the core of your budget that can either facilitate or irritate you in future, depending upon your planning and estimations.
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