Everybody loves the idea of getting something for free, especially if that free offer happens to be a training course offered by a local authority – right?
It saves the cost and headache of sourcing suitable training and having to pay up front – so what’s not to like – surely it’s a win-win?
Well, in this instance ‘free’ may not actually be all it’s cracked up to be, especially when ‘hidden’ cost such as staff salaries, travel and back-fill are considered. In fact, we would suggest that ‘time’ is the key metric you want to focus on if you want your finances to add up. The old adage ‘time is money’ really is true in this instance.
Let’s quickly look at the concept of ‘free’ in the context of learning and development and understand why it just doesn’t make financial sense. The most obvious ‘hidden’ cost associated with any training is staff cost. The cost of paying frontline staff whilst they are away ‘on a training course’ plus the cost of ‘back-fill’ staff to cover their duties can be substantial.
If you’re lucky, staff salaries may not form part of your budget responsibility and therefore the ‘true’ cost of training can be ‘hidden’. However, this is simply false accounting and your organisation year end figures may provide a real wake up call!
To understand just how damaging ‘hidden’ cost can be, let’s look at a simple example:
Care Academy offers access to a specialist online course “Dementia Awareness” (QCF unit J/601/2874). This e-learning course is designed to provide awareness training for all frontline staff. A quick search on Google will reveal many local authorities offering ‘free’ access to a similar course (although many do charge an up front fee or non-attendance fee of anything between £20 and £40 per learner). The interesting point however, is that the majority of ‘free’ courses are based on at least half a day face-to-face training, with some requiring up to one full day. In contrast, our online Dementia Awareness course takes on average 1 hour to complete and we can guarantee and evidence that the learning outcomes have all been met. This is mainly because e-learning ‘compression’ can result in a 3:1 ratio which simply means that e-learning can deliver training three times as fast as traditional ‘face-to-face’ training.
So let’s take a look at how the figures might look for this example, and to be totally fair, we will ignore any courses with up front fees, because it wouldn’t be free then would it!
The financial breakdown may look something like this:
|Learner salary (£7 per hour)||£21.00||£7.00|
|Back-fill cover cost (£7 per hour)||£21.00||£7.00|
Obviously we have been very conservative with the above example and excluded other cost (such as travel or perhaps even a full day’s training) which would simply increase the cost of the face to face training.
Looking at the above, it’s easy to extrapolate the figures across many learners and see that the concept of ‘free’ training is potentially a very expensive myth.
Client case study
In order to reinforce the cost advantages offered via e-learning, let’s look at some figures taken from one of our current clients and extrapolate the ‘hidden’ cost.
Our client has been using Care Academy for around 2 years and directly employs nearly 600 care staff. They are growing quite rapidly and require a combination of induction, annual refresher and specialist training.
Having reviewed their Care Academy account we can see that during the 2 year period they have completed almost 24,000 hours of e-learning.
Based on the above analysis and using a compression ratio of 3:1, the comparison may look something like this:
cost per hour
|Face-to-face (3:1 ratio).||72,000||£7.00||£504,000|
Potential Savings on staff cost: £336,000!
Now, I’m the first to agree that the financial arguments may be a little more complex than I have outlined above, however it’s worth noting that in this example, 24,000 hours of e-learning really only equates to around 40 hours per learner per year (24,000/600) or around 5 days of training – not such an unrealistic figure.
Perhaps the most obvious point to make about these figures is not the absolute totals, but rather the scale of the relative differences – quite simply it’s enormous!
It’s not surprising to hear then that this client is currently looking to increase their investment in Care Academy and increase the range of courses and qualifications available to learners.
Whilst I appreciate that the metrics given above will vary by course, qualification, client and learner, our advice is quite simple, identifying and eliminating ‘hidden’ cost associated with ‘free’ training should be one of your key financial objectives for 2014.
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