How to Reduce Training Costs Without Cutting What Works
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Companies spend, on average, $1,254 per employee on “direct learning” each year. You’ve probably seen some version of this benchmark floating around.
It’s a useful number if you’re trying to figure out how to ballpark what other companies are spending. It’s misleading, however, if you’re trying to understand where that money goes or how it translates into business outcomes.
Benchmarks are useful context. I just don't recommend using them to guide your budgeting decisions. What you need instead is a clearer view of where your training spend goes, and how to reduce it without cutting the training that works.
I'll walk you through how to build an accurate picture of what training costs for your organization, and then how to identify the changes that will reduce spend without reducing impact.
If you’re looking for a more in-depth guide to budgeting for L&D, I’ve got you covered in this guide.
How to measure your training costs
Before you can cut costs, you need to know where your money is going. I know that's easier said than done.
U.S. companies invest more than $100 billion in training each year, and at most organizations, that spend is spread across cost centers.
Step 1: Document training costs
Marie Kondo’s organization method involves piling up things of a like nature in your home so you can sort them. I’m recommending a similar starting point.
I want you to gather (within reason), how much you have spent on:
- Content creation and delivery
- Travel, facilities, and logistics
- Tools and platforms
- Maintaining or revising content
If you’re feeling particularly ambitious, I would also recommend gathering employee training time. By that, I mean how long did employees spend in training (more on what to do with that number in a bit).
Step 2: Estimate the totals
If you have an overwhelmingly long list of expenses in front of you, don’t panic. We can make it more manageable.
Pick one “pile” to sort through (I recommend a flagship program or initiative). Next, decide which rough estimate would be more helpful for you, either a total training cost:
Total training cost = content creation + delivery + employee time + maintenance
Or, a per-employee view:
Training cost per employee = total training cost ÷ number of learners
Example: a leadership program
Think about a high-spend training. Let's say an in-person leadership program, with about 250 managers and ICs who fly into headquarters to attend. The purpose of this program is to build alignment around how work is prioritized according to the business objectives. This program's costs include:
- Content creation and delivery = $150,000
- Employee time (4,000 hours at $50/hour) = $200,000*
- Travel, facilities, and logistics = $75,000
- Tools and platforms = $25,000
- Maintenance and updates = $50,000
That's $500,000 to run the program, which broken down by employee is $2,000 per person.
*Note: For this example, employee time is calculated using a blended fully loaded rate of ~$50/hour, which is approximately a $100,000 annual salary.
Sometimes it's more helpful to see how these costs are distributed, so in this case:
- Content creation and delivery: 30%
- Employee time: 40%
- Travel, facilities, and logistics: 15%
- Tools and platforms: 5%
- Maintenance and updates: 10%
Why do I like these two views? First, employee time and delivery tend to make up the majority of training costs. That's why changing training format and delivery can have the biggest impact on spend.
Step 3: Separate out the costs you don't control
Going back to our leadership program, let's look at the travel line item, which is about 15% of overall spend. Some participants are local, so there are no travel costs for them. Some fly in for just the two days, while others choose to extend their stays for business purposes. For that group traveling in, are you responsible for all of those costs? Just some? None?
If, at your organization, travel is budgeted by team cost centers, then you can remove that cost from your budget. You still need to be a responsible steward of that spend, which may mean considering if it is more beneficial to redesign the facilitation of the program. But it does not mean absorbing those costs into your training budget.
(If the KonMari metaphor was working for you, you’re just putting these costs into two piles. One you keep, and one that no longer sparks joy.)
Step 4: Calculate better benchmarks
You've done the hard part of sorting through costs by program. Now you're ready to calculate better training benchmarks.
In most organizations, a handful of training programs account for a disproportionate share of your budget.
For instance, if you have an executive coaching program, you know that top coaches can charge $30,000 or more for a six-month engagement (we're in the wrong business). If you have all ten of your executives in this program, how does that impact your per-employee benchmark?
This is why I'm skeptical about using external benchmarks. When you average spend across all programs and your entire organization, you lose nuance. A better solution is to develop a series of internal benchmarks that align with your target audiences. You might start with executives, managers, or new hires (the audiences where we tend to spend the most).
Then, do some arithmetic to average it out. If the executives in our hypothetical organization are only offered coaching and no other L&D programs, the annual average is $30,000 per leader. Quite different than $1,254.
5 strategies to reduce training costs
Now to why you're really here: how can you cut those costs?
The fastest way is to stop doing work that isn't driving impact. (Of course, this presumes you're carefully measuring impact.) That means:
- Keeping and scaling training people use and apply in their work
- Improving training that shows value but isn't leading to consistent results
- Removing what isn't being used
I'm going to challenge you to take a step back and look at that portrait for some more obvious candidates for removal. Think of a program with historically low attendance, or a third-party content library people begged for but seemingly never have the time to use. It doesn't mean these weren't well-designed or thoughtful investments. More than likely, they were failures of marketing, which is good feedback to have.
Then dig into your evaluation. Conduct focus groups with your target audiences or ask your HRBPs. Get more information so you can decide how to make the improvements I recommend next.
1. Reduce live facilitation
Every time you run a live session, you're spending money. Even if it's on Zoom, you're still using facilitator or SME time and pulling employees away from their work.
If you're repeating the same session over and over, ask yourself: could this be delivered async? If so, how do you transform the experience to better serve employees?
As someone who adores live facilitation, I challenge you to rethink your delivery approach. Reserve live facilitation for workshops where the emphasis is on practice, discussion (including problem-solving), and feedback.
Making this shift will substantially reduce your costs, for both facilitator and participant time.
In the leadership example I shared above, if 50% of the instructional content was moved into an async format, that could reduce program costs by 15-25% (remember, employee time and delivery account for ~70% of total cost). Just be sure to account for the cost of tools in this transition.
As a rule of thumb, if the same content is delivered more than three times, it can usually be turned into an async module.
If you’re concerned about engagement, the solution isn’t to keep content live, it’s to rethink the design. A flipped classroom model may actually increase engagement.
If you want to try that out, here's an editable example of how you can deliver asynchronous content to leaders.
2. Evolve content creation
Creating training is almost always more expensive than expected once you factor in SME time and production overhead.
AI has changed how training content gets created, making it easier to reduce production costs. I've worked with talented graphic designers who could design beautiful slides and infographics for a pretty penny. Now, I can use natural language to generate good enough graphics for most audiences. I still turn to the experts for high-touch or high-visibility content.
If you're looking for ways to cut content costs, start by identifying ways to use AI in your instructional design. (Again, don't forget to include the added costs from this shift.)
Take an AI video platform like Synthesia. It compresses the traditional video production process into hours. DuPont's Operational Excellence and Development team reduced production time by up to 80% and saved as much as $10,000 per video by making the switch.
3. Plan for updates
Your training will become outdated. Unfortunately, that might happen by the time you're ready to hit publish. If you've ever been responsible for compliance training, you know this is especially true. By the time you get something approved by SMEs, there might already be a new version of a policy or a small, but significant, change to a process.
Your content design needs to support that, which means:
- Keeping core concepts stable. Isolate steps, screenshots, and policies that need regular updates
- When something changes, updating only that component
- Making one person responsible for keeping content current
- Triggering changes from product releases or policy updates, as opposed to quarterly refreshes
- Retiring content that is no longer useful
Don't hesitate to automate some of this work with AI, while keeping a human-in-the-loop.
4. Reduce localization rework
I once worked at a company with a global GTM team and regional sales teams. Each group created its own version of training for new product releases. This slowly translated into teams doing their own thing.
You can avoid message drift by:
- Building one source of truth that gets carefully versioned with updates
- Using the updated source version for localizations
- Giving regional teams access to the latest version so they're always working from the same source
If you're curious how this works, look at Mondelez International, a global snacking company that makes things like Oreos and Cadbury Eggs. They operate across more than 150 countries with 91,000 employees. To keep training consistent, they build modular training videos with AI, creating one source that is then localized with a few clicks.
This workflow keeps teams aligned, reduces duplication, and makes it much faster to roll out updates across regions.
5. Streamline administrative tasks
A surprisingly significant amount of L&D time is spent on administrative overhead.
Training takes time to administer. I once had a fantastic project manager create elaborate Excel playbooks (with VLOOKUPs into our HRIS reports and all) for our flagship programs just to track all the logistics. Depending on the size of your organization, managing these playbooks can become a full-time job, but it doesn't need to be anymore.
If you haven't already, brainstorm with your team how your tech stack can help you:
- Automate enrollment and access
- Trigger reminders based on progress
- Build follow-through into the workflow
- Support managers with simple prompts in a messaging channel
- Capture feedback as part of the learning experience
How can you tell if these changes are working?
Whether you've tried one of these strategies or something else, you need to assess whether the changes you implemented are working.
That means assessing cost savings — that's why you're here. But it also means measuring business impact, which is notoriously challenging. It's also why I haven't promised any specific cost savings in this post, because that oversimplifies the work we do.
I wish I could say that bringing AI into your administrative workflows will save you an FTE salary you could reinvest in a more strategic role, or that you can replace a clunky LMS by vibe-coding a compliance tracking solution.
But that's not realistic.
Instead, focus on measuring whether your team is working more efficiently. Depending on what you change, consider tracking things like:
- How long it takes to create an async version of a previously live session
- How quickly content can be revised when something changes
- How often one source of truth is localized
- What percentage of content is consumed on-demand vs. live
Once you have a better understanding of what is and isn't working, you can craft a narrative about your cost-cutting efforts or resource reallocation.
How do you build a business case for reducing training costs?
If you're feeling overwhelmed about where to start cutting costs, I recommend picking a high-cost or high-visibility program (the leadership program would be both).
These programs often have line items you wouldn't find elsewhere, like a vendor for facilitation or an external facility fee. They also tend to be the largest employee investments, which means you need to more accurately assess whether they're the right use of resources. For that, I recommend a framework like the Phillips ROI method.
Note: Executive coaching programs, or any program facilitated entirely by a third party, should incorporate evaluation into their scope of work.
Once you understand the true costs of the program, as well as its impact, you can make a data-driven decision about what to do. If you’re cutting or reworking an experience, that might mean freeing up budget or L&D team time to focus on a high priority task.
Some decisions will need more explanation. Reducing in-person training time, especially for leaders and managers, may get some pushback. Anticipate that by proactively sharing the updates with your stakeholders.
If you're wondering how to deliver that, the executive summary template below can help you communicate it clearly.
If you're looking at how AI video fits into that model, the team would love to show you. Book some time with them here.
Amy Vidor, PhD is a Learning & Development Evangelist at Synthesia, where she researches learning trends and helps organizations apply AI at scale. With 15 years of experience, she has advised companies, governments, and universities on skills.
Frequently asked questions
What is the average cost of employee training?
Most benchmarks land around $1,200 per employee each year. The number gets quoted often, but it hides more than it explains.
Costs vary widely depending on how training is produced, how often it changes, and how much time employees spend on it. For many teams, the real number is higher once everything is accounted for.
How do you calculate employee training costs?
You need to combine costs that are usually tracked separately.
There’s direct spend like content creation, tools, and external vendors. Then there’s employee time, which is often the largest hidden cost. Training also requires ongoing updates and revisions.
A basic calculation looks like this:
Total training cost = direct costs + employee time + ongoing maintenance
What are the biggest drivers of training costs?
Production and time tend to drive most costs.
Creating training content takes longer than expected, especially with multiple stakeholders involved. Employees also step away from their core work to complete training, which adds a significant indirect cost.
Over time, content becomes outdated, requirements change, and global teams need localized versions. Costs continue to accumulate after launch.
How can companies reduce training costs?
Most teams try to cut costs at the surface, which rarely works.
The biggest gains come from changing how training is built and maintained. Some programs can be removed entirely. Others can be simplified. Production processes are often heavier than necessary, and updates take longer than they should.
When those patterns change, costs decrease without reducing the amount of training.
Does reducing training costs lower quality?
It can, but it doesn’t have to.
The issue is usually inefficiency. When unnecessary steps are removed and content is easier to update, quality often improves because the material stays current and consistent.
How does AI reduce training costs?
AI shifts where time and effort are spent.
Instead of long production cycles, teams can generate and revise content quickly. Updates no longer require rebuilding entire programs. Localization becomes part of the same workflow instead of a separate project.
This reduces upfront effort and lowers ongoing maintenance over time.
What does it cost to develop a training program?
The cost of developing a training program varies widely depending on scope, development, and delivery.
An internal program built with existing materials may cost very little beyond team time. A large, high-visibility program with custom content, SMEs, and external support can run into hundreds of thousands of dollars.
The biggest drivers are content creation, employee time, and how often the program needs to be updated. That’s why it’s more useful to model the full cost of a program than to rely on a single benchmark.
