Do you know how much a company spends on hidden costs related to training?
The percentage of an industrial company’s operating costs related to training can vary significantly depending on the company and its approach to staff development, as well as the complexity of its operations and the frequency of changes in procedures and instructions. However, it is possible to provide a rough estimate.
In all companies, training expenditure represents a percentage of operating costs. This percentage can typically range from 1% to 5% of annual operating costs. That said, some companies with a strong focus on employee training and development may spend more, possibly as much as 10% of their operating costs can go to training and development programmes.
How can these “conventional” hidden costs be calculated?
To determine the specific percentage in the case of a particular company, it is necessary to conduct a detailed analysis of training costs, including not only the direct costs of training programmes, such as materials and instructor fees, but also the associated indirect costs, such as employee downtime during training and replacement costs.
It is important to note that investment in training can have a significant impact on the efficiency, quality and safety of operations in an industrial company. Therefore, while training costs may seem significant, they can translate into tangible long-term benefits such as higher productivity, lower staff turnover and a more skilled workforce.
Are there more hidden costs related to training than the “conventional” hidden ones?
Yes, there are training-related costs beyond the costs of “conventional” training processes (taking courses), and they are incurred by 100% of companies. When changes are made to procedures or instructions, all companies need to get these changes from their offices to the workers on the shop floor in some way, whether analogue or digital. Either through human resources personnel, or through the figure of coordinators, shift managers, etc., in short, production personnel. Workers have to be informed in order to be able to carry out their work safely and productively, and the costs of these actions are camouflaged as part of everyday work.
At Trama Learning we have analysed the impact of these costs and found that they can far exceed the operational costs associated with “conventional” training. Trama Learning is the first and only e-learning on the market designed to facilitate this type of “unconventional” training and, therefore, help reduce these undesirable costs by over 70%.