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How to reduce L&D expenses through LMS ImplementationĀ 

By Alicia Beharry
Published on October 13, 2023

Investing in employee training is more than just an expense – it’s an investment that can lead to increased productivity, reduced turnover, and professional growth within your team. By utilizing an eLearning platform, you can maximize the return on investment (ROI) even further. There are several factors that contribute to these impressive results, so let’s examine the costs associated with both online and offline training strategies and their impact on ROI. Additionally, we want to provide you with some valuable tips to help you make the most out of your online training resources.

Traditional In-person Training Expenses

The costs associated with organizing conventional training are typically the first to be considered when discussing overall L&D expenses. These costs can significantly decrease after implementing a Learning Management System (LMS). This is because traditional training often requires dedicated space, time, trainers, and in-person participation, which can be more resource-intensive for larger organizations. However, with the introduction of an LMS, the need for these physical elements is minimized, therefore reducing associated costs.

  • Finding a Suitable Learning Environment: The Venue Dilemma- Finding the right venue for learning and employee training programs can be a costly challenge for companies. They have two options – investing in their own customized learning space or renting one. However, both alternatives come with significant financial implications. Building and maintaining an in-house auditorium incurs expenses such as utility bills, equipment upgrades, furniture, and technology enhancements like projectors and training tools. These costs can quickly add up to thousands of dollars per year. On the other hand, renting a suitable learning venue involves paying for the space’s square footage and its location, which can also be a substantial financial commitment.
  • Event Refreshments- During in-person training, it is important to provide attendees with refreshments to keep them energized and focused. These sessions can be intense, often lasting several work days, and catering to learnersā€™ needs with snacks is essential. On average, this can result in a minimum expenditure of several hundred dollars per day for food.
  • Costs for Travel and Accommodation– An additional cost to consider is the expenses related to travel and accommodation for both experts and nonresident learners during the training period. These costs can significantly impact the budget, and could possibly exceed $1,000 per person per day. 
  • Trainers and Support Staff- The cost of hiring trainers and support staff can greatly impact the budget for a training program. Trainers’ fees vary depending on their expertise and qualifications, but it is common for them to charge a minimum of $100 per hour. While larger lectures can accommodate many participants at once, training sessions that focus on specific topics often require smaller groups of 10-15 people. This means that if there are a large number of learners, multiple trainers may be needed, or the training may need to be spread out over multiple days. These additional expenses can add up to thousands of dollars per completed course.
  • Content Creation and Distribution Costs- When it comes to developing educational content, various costs come into play. Firstly, there is the expense of sourcing the necessary materials and resources, as well as the expertise required to create engaging learning scenarios. It takes a significant amount of time and effort, with an average of over four hours of development needed for each course hour. In addition to the creation process, there is also the cost of distributing the content. Traditional in-person learning often relies on printed handouts, meaning each participant requires their own copy. However, this can lead to additional expenses, especially when updates or improvements need to be made. If, for example, the course needs to be modified within six months due to outdated information or subpar modules, a redesign, reprinting, and redistribution of the new edition across various departments becomes necessary.

Costs associated with LMS training

The use of a Learning Management System (LMS) can lead to significant cost savings compared to traditional offline learning. Expenses such as venue rental, travel and accommodation, catering, and content distribution are eliminated. Additionally, the cost per learner is reduced because trainers’ fees and content creation expenses are minimized. The ability to train a large number of learners simultaneously through self-paced learning further enhances these cost savings. The implementation of an LMS will result in substantial financial advantages.

  • Using a Proprietary Learning Management System (LMS)- With a proprietary LMS, you are utilizing a learning management system that is owned and developed by a specific company. In order to use this tool, you must pay for the right to access it. Typically, the company will handle the hosting and maintenance of the platform, and these costs are factored into the fees you will be charged. The payment structure for a proprietary LMS often involves an initial setup fee, as well as a monthly license fee per user. In some cases, there may also be pay-per-use or pay-per-course options available. The cost of these fees will vary depending on the services and feature packages you choose, as well as the level of support you require. It is important to note that custom developments are not typically included in the fee structure.
  • Open Source LMSs- Open source LMSs provide a flexible and cost-effective solution for organizations as they are not tied to a specific vendor and can be customized and enhanced as per their requirements. They offer various features such as course creation and management, learner registration and tracking, communication tools, assessment and grading capabilities, and reporting and analytics.These platforms have large and active communities of developers and users who contribute to their continuous improvement and provide support through forums and online resources. While there may be upfront expenses when transitioning to an LMS, the savings can be significant in the long run. The recurring and hidden costs associated with traditional learning organization expenses are often much higher than the ongoing costs of implementing and maintaining an open-source LMS. Therefore, despite the initial investment, the decision to move to an LMS can be financially beneficial for organizations.
  •  Online Course Creation and Distribution with LMSs- One of the key advantages of utilizing a Learning Management System (LMS) for online courses is the cost-saving benefits it offers. With an LMS, there are no expenses associated with printing and distributing physical course materials. Additionally, the design process of creating courses becomes more affordable due to the built-in authoring tools offered by most LMS platforms. These tools empower course creators to:
  • Easily develop new learning content from scratch.
  • Repurpose existing courses for updated or alternative versions.
  • Seamlessly integrate various media elements and enhance training with gamification and interactive features, all without requiring extensive technical skills.
  • Instantly update courses, ensuring learners always have access to the most up-to-date information.
  • Conduct A/B testing by creating different versions of the same course to fine-tune online training approaches.
  • Tailor online courses for different types of learning styles, providing a more personalized learning experience.

Creating a simple course only requires a subject matter expert and an instructional designer, which can still get pricey per hour. Some LMS platforms even provide their own content authoring tools, which add to the cost-saving benefits. It is also possible to create courses using separate authoring tools and then seamlessly upload them to the Learning Management System. Furthermore, certain LMS platforms offer pre-made courses, offering a convenient starting point for your course creation journey.

Transitioning from in-person corporate training to an LMS (Learning Management System) presents several benefits such as reducing training costs by tenfold, enhancing the learning process, and increasing overall efficiency. This results in a higher return on investment with a lower initial expenditure.

SkyPrep LMS is utilized by numerous organizations around the globe, providing flexibility and scalability while meeting users’ unique needs. If you are seeking a comprehensive and adaptable eLearning solution, we encourage you to explore our platform.

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