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Traditional classroom training has four principal cost components:
For this example we used the following assumptions for the classroom course:
Using a Blended Learning Approach A blended course can be composed of learning modules that use many different delivery methods. For this example we assumed that the learning objectives of the two-day (16-hour) classroom course could be achieved by using:
In this scenario the cost of course development rises sharply ($32K to $80K) since the cost per hour of online instruction is much higher than for classroom instruction. This is due to the additional, diverse skills required for online courses, e.g., graphic arts, user interface design, technical integration, etc. At the same time, since students are able to access the course from their regular offices (or even in their homes) the significant costs of travel and living expenses go away. Also, since we calculated one day lost to travel and that the total time the student spends on the course is reduced from 16 to 12 hours, there is also a significant saving in student salaries.
This analysis indicates that due to the higher cost of course development there is a breakeven point in the use of a blended learning approach. If only one or two classes are taught, the higher cost of online course development causes the blended approach to cost more than the classroom, but every time the class is taught beyond the second time, the savings increase as shown in Table 3 below. If ten courses are taught per year the savings in the fifth year would exceed $1 million! Opportunity Cost The analysis we have shown here omits one very important, but controverial cost - the cost of lost business opportunities when your people are in class and out of the field. In the worst case, when it's your senior executives and your top salespeople, these costs can dwarf some of the other costs cited above. For example, what if the class in our example were a sales class that kept some of your top salespeople tied up for three days (including travel). If a salesperson has a quote of $500K, dividing that by the number of working days in a year (250) suggests that every day out of the field could have a $2K adverse impact. For three days that's $6K and for the 200 salespeople who would attend the 10 classes in a year that could be $1.2 million out of your top line! Now, of course, good salespeople don't gain or lose business on a linear, incremental basis every day. And while they are in class they will undoubtedly be making and taking calls from their prospects and customers to keep their opportunities moving forward. This problem of quantifying opportunity cost is why we have kept it out of our basic analysis, but even if the numbers we suggest above are discounted by 50% (to $600K) or even 80% (to $240K) they still can have a negative impact on your business. Which makes it even more attractive to use a blended learning approach to minimize the time your people are away from their work. If you would like to have us help you save money for training in your business, please let us know.
©ROI Learning Services, 2003-2016.
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