Choosing a training style? Look for 'hidden' costs - food service - Opinion - column

For many companies, cost is the decisive factor when selecting an approach to training. However, decision-makers frequently don't take "hidden" costs into consideration; as a result, they may select a training methodology that, while being effective, is cost-inefficient.

Let's take the example of a medium-size food service chain with 300 units. The chain wants to train 1,000 managers, assistant managers, and management trainees in new systems procedures. They are studying three alternative methodologies.

* Instructor-led training

* Print-based self-study courses

* Computer-based training (CBT)

After considering the effectiveness of each of these systems, the chain begins to compare costs. The chain's training department first researches instructor-led training and gathers the following data:

Instructor-Led Training

Training Time: 14 hours (2 days)

Number of Training Sites: 50 (with 20 trainees at each)

Development Costs: $30,000 (for training guides and overhead transparencies and/or flipcharts)

Deliver Costs: $343,250 including--a) Travel costs for trainees @ $250 each; b) Instructor travel costs @ $750 per session; c) Instructor's fee; d) Classroom fees @ $250 per session; e) Shipping.

Total Cost: $373,250.

When the chain's training department examines the costs of a print-based self-study training program, it discovers the following:

Self-Study Training

Training time: 10 hours (about 1-1/2 days)

Number of training sites: 300 (conducted at store level)

Development costs: $135,000 (including printing of study guides)

Deliver costs: $3,000 (for shipping study guides to each store)

Total Cost: $138,000

The total cost of print-based self-study training versus instructor-led training represents a direct savings of $235,250. Moreover, if you consider the savings in training time (4 hours multiplied by 1,000 employees multiplied by $20 per hour -- or $80,000), a decision in favor of print-based self-study training could yield savings of as much as $315,250.

When the chain's training department looks at the costs of CBT, it finds the following:

Computer-Based Training (CBT)

Training time: 8 hours (1 day)

Number of training sites: 300 (conducted at store level)

Development costs: $235,000 (for computer software and printed support material)

Delivery costs: $3,000 (for shipping)

Total cost: $238,000

While the development costs for a module of CBT are high (scaring off some companies), the total cost, assuming that PC-compatible hardware is available to the learners, falls somewhere between instructor-led and print-based, self-study training.

Direct savings of CBT versus instructor-led training are about $135,000. An additional savings of $120,000 in training time mean total savings could be more than $255,000.

Clearly, some training methods are more effective than other in particular situations. For example, training managers in "people skills" -- supervisory skills, customer relations, and employee performance evaluation -- is probably best accomplished in instructor-led seminars, where there are ample opportunities for managers to participate in role-playing and receive personalized feedback.

Nevertheless, don't discount training methods because they appear too costly on the surface. If you carefully examine all the factors -- as the chain in our case study did -- you may find that, in the right situation, even a high-priced technologically advanced training methodology like CBT can be cost-efficient.

John C. doyle is managing director of professional services at Universal Training, Northbrook, Ill.

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