Chase Fell
Technical Education Committee Chair
Jay Industrial Repair
It’s always important to spend time creating a training budget because it outlines the resources that a company allocates for its training programs.
Studies show that training spending per employee per year often falls in the range of 1% - 3% of the employee’s annual salary.
According to the 2022 Training Industry Report, on average, employees received 62.4 hours of training per year.* However, this data is not specific to industrial training.
Here are some steps you can follow to create a training budget:
- Define your training objectives and align them with the company’s annual business objectives.
- Conduct a survey to gather information about the training needs of your managers and production employees.
- Prepare your draft training budget based on data collected.
- Run through all possible scenarios to ensure that you have considered all potential costs.
- Conduct training research to determine the most effective training methods for your business.
- Calculate the ROI for your training to ensure that the investment in training is worth it.
- Identify how much money is spent on total salaries per year and multiply that amount by 1% to 3% to get your total training budget.
- Design the training plan by identifying the learning objectives, selecting the best delivery methods, estimating the costs and resources and evaluating the impact and effectiveness of the training.
A few training budget pitfalls include underestimating the funds needed for online training or overestimating the classroom training spending. Another potential pitfall is overestimating participation. If you plan for a specific number of participants and only a few people attend, utilization is low and might indicate a poor use of your funds. Additionally, a lengthy and ineffective training session can be more costly in the long term.
*The 2022 Training Industry Report was published by Training magazine, a 55-year-old professional development magazine that advocates training and workforce development as a business tool.
