You’ve explored the client’s needs and wants. You’ve gathered data about what the learners need to do differently on the job. You’ve verified that training will help build the knowledge and skills that the business needs. You’ve gained agreement from the sponsors to do training. The next step is to figure out how much this is going to cost.
Here are some rough figures and ranges–updated for 2024–to help you generate a cost estimate for training design, along with my take on some of the things that make different prices a good value for the HR and Training staff. Much of this is from my experience on both sides of the desk as both a corporate client and as a consultant. (Rates and pricing will vary with the general professional costs in your geography, of course!)
Consider also the overall effectiveness of your training or learning group. You can do a self-assessment on how close you are coming to best practices with the Training Group Best Practices Assessment, here.
Here are the “big buckets” of work that have to be done. Don’t forget all of the work that goes into an hour of training delivery:
- Contract, research, assess needs, gather and interpret content
- Design the learner experience
- Develop the instructions and material to create the experience
- Code, program, develop, test the technical product (if web-based training (WBT)) or prep the trainers (if instructor-led training in a face-to-face or virtual classroom (ILT or VILT))
- Review, edit, proof, check, produce the material, LMS/technical testing (if WBT)
- Translation, localization (if required)
The estimates and rates shown here assume contract or consulting rates, rather than internal staff costs. Using internal staff tends to cost 60-70% of my listed estimates because while the cost is lower, you also have to factor in all the overhead time dedicated to life as an internal employee (staff meetings, employee events, time off, learning and development, as well as having to juggle multiple projects and the “switching costs” as people manage multiple things and requests).
The “hour of finished training” term used here refers to the average time that the learner is expected to engage with the training. For classroom and VILT training, the finished hours figure includes total in-class seat time plus the amount of outside “homework” activity time done independently. This includes blended learning programs. If you need to estimate college credit hours, that is a very different thing, but you can figure out the cost and effort if you work backward from credit hour to total learner engagement time, and then calculate the design time and cost based on your regional rates.
E-learning (or web-based training (WBT)) works the same way, but the cost is typically much higher per finished hour because the engagement time is usually shorter and intended to be more compact, and because of the added cost of programmed instruction development.
Time & Cost Estimates
Classroom or virtual instructor-led training (ILT and VILT) rules of thumb:
- Plan on covering 1 specific skill per 1-2 hours of training. Remember to include “back home practice” instructions and performance support or help for learners in your project budget.
- It takes 30-40 hours of design and development to build 1 hour of ILT, working from content provided by subject matter experts (SMEs). (See also my note below about using generative AI to reduce development time. Design time remains about the same.)
- It takes 20-30 hours of design and development to build 1 hour of virtual instructor-led training (VILT), starting from content provided by SMEs. Note that effective and efficient use of generative AI, like Chat GPT, can streamline this a bit, down to maybe 12-20 hours per deliverable hour of VILT.
- If editing from existing training material in a compatible format and visual style, drop the design time by 50%.
- If a trainer script is not required, drop the design time by 25%.
- If the designer will be required to gain agreement to objectives, content, and or delivery details from multiple approvers, SMEs, reviewers, or stakeholders is needed, double the time.
- Estimated Price (Minneapolis-St. Paul) per hour of finished ILT/VILT: 20-40 hours, $ 3,000 – $ 6,000.
- Delivery is Extra! Remember to plan for delivery cost for each ILT session: Trainer cost, train-the-trainer cost, material and facility costs, travel and expenses, learner costs (if applicable), replacement worker or opportunity costs (if applicable)
E-learning / Web-based training (WBT) rules of thumb:
- Plan to compress 3 hours of classroom into 1 hour of WBT (But not all training topics can be converted to effective WBT!) Try for a course length of about 30 minutes with 4-6 microlearning modules in the course.
- These estimates assume you are using tools such as Articulate Storyline, Rise, Camtasia, Captivate, and other rapid authoring tools. Time drops a bit (20-35% is a good estimate) if the designer is able to make effective use of generative AI.
- These estimates also assume that you will chunk e-learning into short “micro-learning” lessons or modules. The more modules there are, the more development and testing work needs to be done, but the more effective and convenient the learning will be for end users.
- Add 50% for each additional format if the course must be delivered for more than one format (laptop/desktop, mobile, iOS vs. Android, etc.).
- Interactivity drives e-learning development time and pricing. Pick the level of interactivity the business need requires.
- WBT Level 1 – Basic WBT Course:
- Text events that include stock images, application screen captures, or client provided graphics
- Basic interactive screens such as menus or hotspot reveal
- No audio or custom animations
- Includes end of course assessment with multiple choice or matching interactions
- Estimated Price per hour of finished content range: $12,000 – $15,000
- WBT Level 2 – Intermediate WBT Course:
- All properties of WBT Level 1
- Includes basic audio (voiceover, sound effects) and inclusion of client-provided movie or other media
- Includes interactions and basic animation from a library of existing interactions
- Assessment includes additional interactive screens with exercises and simulations
- Estimated Price per hour of finished content range: $15,000 – $30,000
- WBT Level 3 – Complex WBT Course:
- All properties of WBT Level 2
- Includes advanced audio
- Includes advanced or custom animations, complex interactions, and/or games
- Assessment includes additional interactions such as: drag/drop, scenario based instructional strategies, and essay / fill in the blank
- Estimated Price per hour of finished content range: $25,000 – $50,000
Going Lower & Higher
Different factors affect the hourly rates for learning design and delivery.
Higher Pricing (hourly rates $250-$500/hr)
With the higher pricing factors, you are usually paying for greater value, expertise, speed, convenience, reliability, and lower risk. You might also be paying for a brand name, or special proprietary content that is widely regarded as great stuff. You may be banking on the reputation of the firm or a “Big Name” designer with a team of resources to draw on.
- Larger, full-service firms with global reputation and reach
- Higher-priced service regions (New York, Silicon Valley, etc.)
- Greater expertise
- Specialized knowledge or content
- Consulting on solutions vs. executing basic design
- High-demand topics
Lower Pricing (hourly rates $75-$150/hr)
With the lower pricing factors, you are usually getting a savings from less complexity, overhead, and overall reach. You may be using a designer with expertise in a single topic area, rather than broad design skills or a thorough understanding of your business. Pricing in this range does not indicate poor quality! It just means that there are fewer costs embedded in the instructional design service, as a whole, and that you are buying (most often) the expertise of a single instructional designer, who you must select and whose work you have more responsibility for managing as the client.
- Smaller firms or independent, local consultants
- Offshored work
- Lower-priced service regions (Minneapolis-St. Paul, St. Louis, Nashville, etc.)
- Content pulled from anywhere; usually less rigorous
- Mass market topics
- Work done internally; especially with contract design help
Please note that these prices are not an official pricing proposal and will vary considerably depending on the situation. Detail-oriented clients with many stakeholders to please and complex programs to build will increase the time required. Geographies, business models, and availability of talent will certainly affect pricing rates.
The more informed you are, the better you can determine what value and investment makes sense for the business need you are trying to fill with training! Use this information (and take with a grain of salt) to help sharpen your own estimates!
Contact me for more,
–Steve