Moving to eLearning and its Impact on Your L&D Budget!

If you are reading this, then I hope it is safe to make the following assumption. You are on your journey to transition from traditional training methods to adopting eLearning (via the best LMS software) at your workplace. Whether you are just starting or in advanced planning, a key question will revolve around the budgetary impact, aka the cost of eLearning. Before we address this question, let us first look at a few facts:

A study by Karl Kapp and Robyn Defelice states that the time required for producing one hour of distance learning materials is anywhere between 90 to 240 hours. On the other hand, Chapman Alliance suggests that an hour of eLearning can sometimes cost as much as $10,000 to produce. Of course, these numbers are subject to change depending on the features and media elements you want to include.

The figures above are only one factor impacting the cost of eLearning. Numerous other factors reduce the overall expenses and release budget pressure. Hence, before moving to an online model, you should understand the elements and their overall impact. And this is where we come in. Here is how you can calculate the cost of eLearning and gauge its effect on your final L&D budget. Let us start with the most important—the cost of eLearning content creation.

What is the Cost of eLearning Content Creation?

Cost of eLearning and the Instructional Design Model

The cost of online course design and development is heavily dependent on the instructional design model chosen. One of the most popular eLearning models used by industries is the ADDIE (Analysis, Design, Development, Implementation, and Evaluation) model. Each stage of this structure comes with its costs.

Analysis: The analysis stage involves the team gauging the market, competition, and content. If you are creating new content or reusing old content, you need to estimate the cost of eLearning incurred in both approaches. Again, in the Design stage, you have to make distance learning materials based on the instructional design best practices. Now, in the third step, i.e., development, your team can embed your training modules with elements like lecture notes, practical tasks, gamification, quizzes, graphs, diagrams, and videos, among others.

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During the implementation of corporate learning management, you are required to upload the online course content into an LMS of your choice. You additionally have to organize it into an online course and create QA of the ready product. You might also need to go for a trial run. Finally, in the Evaluation stage, you are required to keep track of your course performance, collect feedback, and tweak the content to get maximum Return on Investment (ROI).

Again, for the above model, you need experts like SMEs, an Instructional Design team, a Project Management team, and Technical Staff, among others — additional elements of the cost of eLearning.

Breakdown of the Costs Involved in Each Stage of an Instructional Design Model

Let us again take the example of the ADDIE model. For instance, you should ensure that the course is feasible, both from the economic or social-economic perspective. Some of the expenses involved here include money spent on creating brand awareness, improving corporate culture, deploying employee onboarding training, etc. Now, in the Analysis stage, what can be the costs involved? Well, you will incur expenses in target audience research, current competition research, exploration of preferred promotion channels, and the hourly rate of experts studying the above aspects.

Again, in the Design and Development stage, you will expend effort creating a comprehensive training model, complete with media, graphs, diagrams, and other learning materials that you can quickly compose into a storyboard infused with quizzes transformed into an online course. In the Implementation stage, where you deploy an LMS, you have to consider the cost factors involved in organizing the Learning Management System into an eLearning module.

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How Does the Cost of eLearning Affect Your Total L&D Budget?

Well, once you consider all of the upfront mentioned above costs, you might think that the price of eLearning is a tad high as compared to the total L&D budget allotted for carrying out training sessions. However, there are several other factors you need to consider to see the big picture.

Travel and Accommodation

In-person training sessions need both the trainees and trainers to reach a pre-determined location to attend a module. Businesses have to incur additional travel costs on behalf of their employees and pay for them from their training and development budgets. However, when you implement eLearning, you won’t have any of these expenses since the staff can tune in to the training sessions from the comfort of their home or workstation.

Meal and Venue Costs

In any training session, snack and meal breaks are quite common since the hours are usually long. But you can eliminate these expenses if you conduct the sessions online. On the other hand, in-person classroom training demands a well-equipped physical space to run the event. And start-ups or small businesses that do have access to in-house training facilities might need to rent a separate venue to execute the training program successfully. But with eLearning, you ditch the costs incurred in all of the above activities.

Time Spent Away From Work

Classroom training needs the instructor and attendees to stay absent from their workstations for hours at a stretch. As a result, this can negatively impact the business’s productivity. Additionally, you may waste much time moving the staff from one spot to another. You can otherwise use this time to increase productivity and, thereby, profits. In contrast, eLearning enables employees to attend their training sessions right from their desks, saving a lot of time and money.

Costs Incurred in Salaries And Training Materials

Staff trainers and facilitators have to get paid. Moreover, instructors themselves will also need to be trained, which in turn requires time and money. Again, with eLearning, corporates can save several bucks on printing materials since all content can be hosted online without you needing to print them for each training session.

In short, the long-term cost of eLearning is significantly lower as compared to in-person training because businesses can save money on employee and trainer travel, infrastructure and classroom maintenance, facilitators’ salaries, documentation, and paper costs. What’s more? eLearning allows companies to reuse a set curriculum/course with multiple candidates. The only effort needed is to update the learning material when required.

How Can You Further Reduce the Impact of the Total Cost of eLearning on Your L&D Budget?

Make the Best Use of Your SMEs

Your SMEs are a valuable asset to your organization. As such, rather than wasting their valuable time in unnecessary activities like travel, you can allow them to spend that time building online courses, giving live webinars, doing one-to-one coaching calls and feedback sessions, or creating content for your LMS’s course library.

Calculate the ROI

To calculate the ROI and maximize savings, you need to segregate the key elements that serve as cost factors. Some of the factors include Hard Savings in Terms of Resources Used (Time). Time has sub-factors like total training delivery time, trainer time consumption, participant time consumption, and classroom management time consumption.

Therefore, after implementing an online LMS like PlayAblo, your total annual time savings is the total of all the above factors. Convert this number by connecting it to the payroll. Now, you get the difference in expenses incurred in terms of Man Days and Cost. Noteworthy to mention is that this is just your annual savings. When you calculate it over cumulative years, you will see a drastic increase in your cumulative savings.

For more details on how to calculate ROI, you can check out our article here.

Outsource Your eLearning Development

When looking to reduce the cost of eLearning, another effective approach is to outsource your eLearning development. Outsourcing your eLearning development involves hiring a training and learning company to design, develop, and implement your eLearning courses.

One of the main advantages of outsourcing eLearning development is cost savings. Outsourcing allows you to reduce the cost of hiring in-house eLearning developers, investing in eLearning authoring tools, and maintaining your eLearning platform. Additionally, outsourcing provides access to a wider range of eLearning experts who can offer fresh perspectives and innovative ideas for your eLearning courses.

When choosing an eLearning development partner, it is crucial to consider their experience, expertise, and reputation. Look for a partner who has a proven track record of delivering high-quality eLearning solutions and who has experience working with organizations similar to yours. You may also want to consider factors such as their pricing structure, communication and project management capabilities, and technical expertise.

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Leverage Existing Resources

One strategy to reduce the cost of eLearning is to leverage existing resources within your organization. This involves identifying existing training materials that can be repurposed for eLearning courses. This may include PowerPoint presentations, training manuals, and other educational resources that can be adapted for use in an online format.

Additionally, you can utilize in-house expertise and resources for eLearning development. For example, suppose you have a team of subject matter experts or trainers who are knowledgeable about a particular topic. In that case, they can be tapped to create eLearning content related to that topic. This can save on the cost of eLearning by skipping the hiring of external eLearning developers. Also, it can ensure that the content is accurate and relevant to your organization.

By leveraging existing resources and expertise, you can reduce the cost of eLearning development while still creating effective and engaging courses for your employees.

Conclusion

The eLearning market is an evolving one. It continually changes with the introduction of new trends and technologies. In all of these cases, the course should remain relevant. Even if your course is comprehensive, it will need touch-ups over time. Add New data or some statistics when breakthroughs occur in the subject matter. Just keep this last bit in mind as you put together your eLearning L&D budgets. And you should be all set. Need a consultation for implementing eLearning at your workplace or just someone to bounce an idea to bounce off of? We are here to help!

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