Benjamin Franklin once said, “An investment in knowledge pays the best interest.”
In the corporate world, his wise words translate to investing in employee training programs.
Indeed, research shows that companies with comprehensive training programs and a strong learning culture have a 24% higher profit margin and a 30-50% increased retention rate.
But what training cost should you pay before you get that sweet ROI?
This blog post will guide you through the hidden and obvious costs of nurturing your team's growth through training videos, with insights to effectively budget one of the most important investments you can make.
Read on to find out how much it costs to train (or not train) your employees and how you can actually save money while creating more effective training content.
The hidden costs of inadequate training
Statistics show people really value L&D opportunities, and not providing suitable extensive training can cost companies a lot:
- 55% of employees consider career growth and opportunities more important than salary.
- 41% of employees think that boring training programs can hinder learning.
- 40% of employees would leave their jobs in less than a year if not offered the right training.
So, training employees the wrong way or not training them at all gets your organization stuck with decreased productivity and poor customer service. Plus, it leads to high employee turnover rates that make you bleed more money into recruitment and new hires onboarding and training.
Talent development to improve employee retention benefits your organization. Suppose you have 100 employees, each with a $5,000 average salary. If 20 of them leave within a year and you need 8 weeks to onboard a new hire, this employee turnover cost calculator estimates your employee turnover rate is 20%, and the total cost to onboard a new employee would be $10,000.
Gallup says U.S. businesses lose up to a trillion dollars yearly on voluntary turnover. When someone leaves, the real cost of onboarding a new employee can be from one-half to two times the former employee's annual salary.
So, rather than paying for onboarding a new employee, you might want to tune in to your existing employees' expectations for professional on-the-job training.
Long story short, training employees with the right solution pays off, but it can be costly if you do it incorrectly.
2024 Trends in employee training costs
According to the 2023 Training Industry Report, the average training cost companies spent per learner was $954, and each employee received 57 hours of training per year.
In 2024, the L&D budgets will likely continue to focus on leveraging technology to train employees with more flexible, accessible, and diverse methods. Last year, companies delivered training specifically through:
- Learning management systems (89% usage)
- Virtual classrooms/webcasting/video broadcasting (85% usage)
- Rapid e-learning tools (44% usage)
- Mobile apps (31% usage)
Investment in these technologies that minimize time spent training indicates that on-the-go or “just-in-time training” should be the main focus of your training program.
Training costs per learner vary depending on several factors. To make cost projections, consider:
- Type of training: High-tech or specialized training often costs more than general or soft skills training.
- Training method: In-person, classroom-style training can be more expensive due to venue, travel, and accommodation costs. Online training might be less costly upfront but may still increase your cost of training with computer programs or platform subscriptions.
- Training duration and intensity: Longer or more intensive training programs (like boot camps or immersive programs) typically cost more.
- Trainer expertise and credentials: Instructor-led training with specialists or well-known experts often commands higher fees.
- Customization: Training programs tailored to specific company needs can be more expensive than standard, off-the-shelf training modules.
- Materials and resources: Handouts, software, high-quality or proprietary training materials, and other learning aids affect the overall cost.
- Certification and accreditation: Programs that offer certification or are accredited by professional bodies come with a higher cost of training due to the value of the certification and the costs involved in maintaining accreditation standards.
What video training for employees costs in 2024
The cost of video production for employee training can quickly scale up depending on your quality and volume needs. A survey conducted by Synthesia detailed a breakdown of how much it currently costs to outsource your videos to external agencies:
- Low-range videos cost $1,000 per minute: Basic animation, script, and voiceover.
- Mid-range videos cost $3,000 per minute: More advanced animation and motion graphics, complex script, and professional voiceover.
- High-end videos cost $8,000 per minute: High-quality animation and sound design, potentially includes 3D animation.
The high price tag of outsourcing video production isn't the only thing standing between you and a more robust employee training program. Businesses report that the biggest challenges with producing video content are time, updating content, and ensuring that videos are engaging.
In response to economic pressures and the need to "do more with less", companies are turning toward AI video production. With AI video generator software, anyone on your team can create training videos in just a few steps.
A survey of over 120 AI users found that L&D departments reported average time savings of 40%. In other words, if you're currently creating videos in-house, you could easily scale up production and decrease costs by almost half.
Let's take an example scenario:
- You currently have one person making videos internally.
- They take, on average, 8 hours to make a simple video start-to-finish
- They need to make 15 videos a month (roughly 3-4 per week)
- Each video is about 3 minutes long
- Their salary is $60,000 per year
Compared to in-house video production, AI will save you a massive 72 hours a month and result in a productivity increase worth around $773 monthly. That's worth $9,280 a year!
Compared to outsourcing video production, AI will save you a massive 115 hours a month and save you about $36,971 monthly. That's almost half a million dollars a year.
The above example is a relatively conservative calculation. Check out some case studies on how real companies have been using AI in their employee training programs:
- DuPont upskills a global workforce making AI videos 80% faster with +$10,000 in savings per video vs third-party vendors.
- Teleperformance creates videos in 40+ languages with 5 production days and $5,000 in savings per video.
- Modern Canada created +100 videos in six months, 90% faster and with +$6,000 savings per video.
Why video is so effective in learning and development
A staggering 97% of L&D professionals acknowledge that a video-based training program is more effective than just handing text documents in helping employees retain training information.
What makes video content so memorable? The answer is that visuals are processed in the brain 60,000 times faster than text.
Human memory is heavily influenced by the richness of the sensory experience. Unlike static text, video can combine visual cues, storytelling, and auditory elements, making it a multisensory experience. This richness in delivery captures attention and helps make the information stick into the learner's memory.
Circling back to what experts say about video effectiveness, we surveyed 102 Synthesia users in the L&D space and got them weighing in on the distinct advantages of video training over traditional methods.
Gary Stringer, a Senior Content Marketing Manager, highlights the trend towards microlearning. He notes that incorporating video into L&D strategies often aligns with focusing on content that addresses specific problems, providing solutions precisely when needed.
To top it off, video training doesn’t just help employees learn; it also brings a higher return on your training costs investment. Here’s what Jeannette Readbad, an L&D Head, says about the cost of training ROI:
“Repeatability of videos also means ROI for the business. The more the videos are played, the higher the ROI because it means we get to play it to more audience even all at the same time, without asking for a physical facilitator to travel from one site to the next, with no issues on schedules.”
Ready to create engaging and affordable training videos with AI?
Want to boost productivity with your in-house video production? Synthesia can help you achieve comparable results when training employees with video. Try the free AI video maker to create your first AI video in minutes.