The Hidden Cost of Onsite Training

By: MicroTek
10/06/2017

I was recently speaking with a friend of mine in the software industry who mentioned that her company was moving their training to internal space to save money and offer more flexibility. I have heard comments like this before, and it amazes me that they are so rarely put under the light of inspection.

So often, onsite training is perceived as the most cost-effective solution; however, this perception is not confirmed by real data. So, let’s look into the details around training onsite versus offsite. While exact figures may differ for each business, I encourage you to go through this exercise to understand the real costs behind training onsite versus offsite—you may be surprised.

The Hidden Cost of Onsite Training

The idea that onsite training is inexpensive perpetuates because it is difficult to measure the actual costs involved. While it is easy to see exactly what you spend with an outsourcing company, the costs of training onsite are not obvious and tend to be spread around the organization. Let’s take a closer look at these costs, so we can get a more accurate comparison of onsite versus offsite training.

Training Technology Costs for In-House Training Space

Technology is likely the most expensive component when looking at the cost of onsite training space. For any type of technical training, the cost of building and maintaining computer labs is significant. This can add up to thousands of dollars per computer (especially if your training requires a certain degree of processing power), software leases for each device and whatever security and virus protection software you need to protect your infrastructure.

Furthermore, this lab environment will need to be maintained, kept current and upgraded within three to five years. This can become a sizeable additional investment.

Staffing Costs for Internal Training Facility

All training requires support. You will need to dedicate at least one resource to provide onsite technical assistance during the training events and to maintain the environment. Often, when onsite support is not available, instructors are left to troubleshoot technical issues on their own, which delays and disrupts the training session. These delays not only negatively impact the student learning experience but lead to increased costs.

Providing support to ensure successful training events means adding paid personnel to oversee the event, furthering the financial impact of onsite training.

Real Estate Costs for Onsite Training Space

Occupying space costs money—the room, desks, tables, chairs and the necessary teaching equipment all have a price tag; not to mention the costs of keeping the area clean and maintained. You then need to factor in the opportunity cost of alternative uses for that dedicated space. This is not an expense that you have likely considered before, but it is one that your onsite training incurs on the company.

View our infographic comparing the costs of in-house vs. outsourced training  facilities.

Lack of Flexibility When Using In-House Training Space

The most frustrating part of onsite training is the lack of flexibility. It is often assumed that using your own space provides freedom, but it is an extremely expensive freedom. If you need to expand your training program, internal real estate availability may not allow it. If the space does happen to exist, then you have the increased investment that we discussed earlier to get it training ready. Conversely, what if you need to downsize your training program? If the dedicated space in under-utilized then the perceived return on your original investment is delayed or no longer happening. If this requires you to move to a smaller dedicated space, you have already incurred the sunk costs (technology and furniture) of the larger space plus you are now adding the additional expense of the move.

Unless every training event perfectly fits into the model you’ve bought and paid for, flexibility comes with a price.

The Freedom of Outsourced Training Space

By contrast to the rigid structure of onsite training, outsourced training venues are designed to provide freedom to a training program. The Training as a Service model allows you to use exactly what you need, when you need it, and you only pay for what you use.

Outsourced Training Facilities Provide Scalability

The most valuable thing you gain with training outsourcing is scalability. Because you have no hardware or real estate investment, you use as much or as little as you need for any given event. Whether you are training a small number of employees for re-certification or performing a training rollout across a number of cities/countries, an outsourced model will be the most cost-effective. When this model is offered as a managed service, it also removes the administrative burden that comes with managing large training requirements. The provider will manage the sourcing of all offsite training space allowing you to focus on the development and delivery of your curriculum.

Instant Time to Market with Flexible Training Space

Because you’re leveraging third-party training space, you have the freedom to use space where and when you need it. This is especially critical when time is of the essence in bringing a product to market.

Easy to Experiment with Outsourced Training Space

Another advantage of outsourcing is the ability to try the space out without a commitment. Whereas onsite training requires full investment, you can determine in one or two training events if outsourcing training space makes sense for your organization.

Conclusion

Henry David Thoreau said, “When you change your perception, you change your reality.” The false perceptions of onsite training as cost-efficient and outsourcing as restrictive have led companies to make a significant investment in dedicated spaces that ultimately have resulted in confining and limiting their training capabilities.

I challenge you to take a closer look at the real numbers of your training program. How much does onsite training actually cost your company? How much freedom do you really have with it? When you challenge your preconceptions and perspectives, you may find that the freedom you are seeking is not as expensive as you think.

The benefits of utilizing offsite training venues often go beyond the bottom line. Read our post on reasons to move your training offsite for more on how it can also lead to significant learning benefits.

Read Six Reasons to Move Your Training Offsite