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Training Costs


I have been asked to set a training budget for 2008 and wondered if anyone has any guidelines as to how they work out their budget. We obviously have requests for specific training but need to account for any unexpected training throughout the year
Jo Hine

3 Responses

  1. It’s been a long time…
    …since I asked this question on training zone.

    And what was true for me then is still true now. There is no easy calculation for a training budget and % of salary is a really bad way to go.

    What you need is a training needs analysis in line wiht the business plan. Identify the areas of development required and cost them, then determine if they bring enough return to move forward and then you’ll have a rough budget.

    Then add an optional bit more for nice to have training (the polish as it were).

    Then present your budget on the basis of this is were you want to be as a business and this is what you need to invest so that your people will take you there.

    It’s not an easy process, but it does mean that training will then be seen as a strategic function and that you have put some thought into things.

    Good luck.

  2. Training costs and budget
    I agree with Nik, this type of benchmark is not a good place to start. It might be an interesting comparitor but should not be used to set budgets.
    I have looked at a number of surveys and a rough mean average is a training spend of the equivalent of just under 3% of the salary bill. This is misleading, however, as the range is very wide. Large and successful organisations, those rich in specialists and professionals, and those going though major change tend to spend more. It also varies with sector, type of work done, history and culture, and current financial situation.
    The only slight difference of emphasis I would give to what Nik says is that you need to be able to assess needs in year and respond to them. This means you cannot do a perfect calculation 12 months or more ahead. It has to be based on a fair bit of judgement, estimation and extrapolation. If in doubt, I would up the contingency element to more like 20% or 25%. But you will need to have a good argument to support this figure when you go to the board.
    You might like to also see:
    Best of luck

  3. Comments to support your budget
    This is not a direct answer to your question but I hope it helps.

    I always think about training budgets as I would think about a business plan. Your employees are your assets, invest in them wisely. My advice would be to think about this from a different angle.

    Avoiding unexpected costs – these tend to be linked to new legislation, revised policies or staff turnover. Most of these can either be predicated or avoided, obviously not in all cases.

    “the cost of not training” – present the training needs of your organisation based on the actual needs and capabilities rather than just based on cost. This should mean you can cover all costs rather than having to leave off what may be important training.


    Something like 40% of new joiners resign in the first 3 months due to poor induction. By improving induction you can help reduce staff turnover, meaning no unexpected costs for new employees.

    Legislation updates are normally notified a head of time, check out the latest legislation to make sure you spot changes due.

    Request an expected increase in head count from all areas of the business, this helps avoid a sudden “ I have 5 new starters next week”

    From this you should be able to request a budget based on the cost of delivering all training not just a formula of X per head.

    Mark Jones


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