Cost Estimates for Learning Design

You’ve heard loud and clear what the execs want. You’ve gathered some 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 managed to get some 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 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!)

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Here are the “big buckets” of work that has 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 WBT) or prep the trainers (if ILT)
• Review, edit, proof, check, produce the material, LMS/technical testing (if WBT)
• Translation, localization (if required)

 

Time & Cost Estimates

Classroom, instructor-led training (ILT) rules of thumb:

• Cover 1 specific skill per 2 hours of training.
• It takes 30-40 hours of design and development to build 1 hour of ILT, working from scratch.
• If using existing training material, drop the design time by 50%.
• If a detailed trainer script is not required, drop the design time by 25%.
• Estimated Price (Minneapolis-St. Paul) per hour of finished training: $ 4,500 – $ 6,000.
  • Delivery is Extra! Remember to plan for delivery cost for each ILT session: Trainer cost, material and facility costs, travel and expenses, learner costs (if applicable), replacement worker or opportunity costs (if applicable)

 

Web-based training (WBT) rules of thumb:

• Can compress 3 hours of classroom into 1 hour of WBT (But not all training topics can be converted to effective WBT!)
• Three levels of WBT interactivity drive development time and pricing. Pick the 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 animations
  • Includes end of course assessment with multiple choice or matching interactions
  • Estimated Price per hour of finished content range: $10,000 – $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 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 ($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 are banking on the reputation of the firm, rather than the individual designer, and you have more resources to draw on from that firm.

• 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 ($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 (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!