Before diving into the costs associated with training, we need to consider and address a few overarching training questions:
- What is the purpose of it?
- What are the main dimensions of the training activity?
The Purpose of Training
We can agree that training is a service offered to organizations, groups and individuals that adds value to the recipient by shaping the knowledge, skills and attitudes both personally and collectively. Training empowers people and organizations so that they can be more efficient, effective and agile in their daily activities. Training ensures employees, managers and leaders are equipped to sustainably accomplish the organization’s mission on a daily basis, keeping things aligned and moving towards the vision. In the aviation industry, training is crucial for keeping up-to-date with global standards and regulations, particularly those pertaining to safety and security.
Aside from the direct benefits of training in enhancing skills and career development, and aligning staff with respect to the organization’s mission, there are other benefits, perhaps not as perceptible, that can be attributed to training. These include:
- helping the business run better
- facilitating the recruitment of high-performing candidates
- promoting job satisfaction
- retaining and motivating skilled and experienced employees
- being essential for knowledge transfer and expertise continuity
Training: A Multidimensional Undertaking
Once the value of a training activity is examined, we need to examine the different dimensions that can be associated with it.
If we look conceptually at the activities performed by a training provider to develop and deliver quality, relevant and up-to-date training, there are a number of tangible elements to be considered. The most relevant and significant ones are:
- Training needs assessment
- Design and development of pedagogical material
- Supporting technology and facilities
- Promotional activities and collateral documents
- Faculty and Instructor costs
- Student costs
- Continual quality monitoring
- Assessment of the outcomes
First and foremost, the planning process must include an organizational training needs assessment (which is often triggered by disparities in performance). This assessment identifies the gaps between existing and required competencies, and will ascertain whether the gaps can be closed by enhancing competencies and skills through training.
The outcomes of the training needs assessment will also guide the design of the training programme. The learning objectives must be defined, taking into account regulatory requirements, organizational needs and the criteria for evaluating the training outcomes. To ensure value is added, the needs of the organization, teams and individuals must be considered as they relate to the vision and mission of the organization.
Although this is the best practice, not all organizations follow this path. Training planning is often an ad hoc process resulting from specific events like: an individual’s request for career development training; new employees awaiting initial training and onboarding; or existing staff seeking re-certification in specific areas. Skipping or rushing through a systematic, carefully planned needs assessment may seem like a cost reduction strategy, but the inefficiencies that it will trigger down the road will quickly exceed the savings made. As a result, the training design, delivery, and outcome will undoubtedly be negatively impacted.
In the area of curriculum development, a sound pedagogical approach with a standardized design and development are key to a training organization’s survival. Training standards are established, design and delivery methodologies are approved, and course and exam design templates or blueprints are developed so the actual curriculum development and revision process can optimally unfold. This is followed by the involvement of the subject matter experts and instructional design specialists (in-house or contracted) who develop the content, align it with the course purpose, target audience, and learning objectives, and then format it to the intended method of delivery.
Regardless of the method of instruction, personnel with training management capabilities are critical to managing the logistics and administration of a course or programme, as well as to adequately assess the physical and technical infrastructure needed to deliver the training to the end user, the learner. On the technical side, a solid content management system (CMS) is required so key stakeholders can access, edit, archive, and retrieve the course material and keep track of versions. Furthermore, a robust learning management system (LMS) is necessary for supporting student registration, performance tracking, faculty enrollment, and other administrative tasks. We’ve confirmed the value of training for both the organization and the individual, and looked into the process of designing, developing and delivering training, let us now examine the costs inherent to these.
Evidently, all of the activities constitute costs to the training provider that can add up to very significant amounts. For example:
- The design and development of training material can be calculated in terms of professional days. In the aviation industry, subject matter experts typically charge a four-figure USD fee per day;
- Supporting technology (LMS, CMS, classroom equipment, projectors, whiteboards, Wi-Fi connection, etc.) can easily reach hundreds of thousands of dollars for the software and hardware alone, excluding the labor costs associated with systems administration, maintenance and support;
- Promotional marketing and awareness activities may call for as much as 5 to 10% of the total training budget;
- Faculty and instructor costs can be estimated in terms of annual salaries when on payroll, or training preparation and delivery days when contractually hired. Here again the four-figure USD fee per delivery day stands;
- Administrative costs can represent up to 15% of the total costs;
- The on-going quality assessment of training activities and the associated updates to the material will add significant amounts to the total training budget; and
- Salary costs and productivity loss must also be accounted for.
The costs to the beneficiary organization that should be budgeted for, are also substantial:
- A training needs assessment ranges upwards from $50K for a large organization; and
- Student costs, often paid for by the sponsor organization, also reach easily into the hundreds, if not thousands of dollars, for tuition, travel, food and accommodation.
Budgeting for Training
We have shown that training in itself is a multidimensional service with various layers of costs linked to the development, the delivery and the assessment of it. To have quality training, no steps in the above described cycle should be skipped or set aside. To do otherwise might jeopardize the credibility and the relevancy of the training offering.
Training organizations need to properly plan their training activities way ahead of time. In doing so, they need to ensure that they get their fair share of the organization’s total budget to properly fund all of the necessary activities.
Are There Alternative Sources of Funding?
Sponsored or subsidized training is available through some (diminishing) alternative sources of funding:
- Regulators and governments provide funds to ensure the dissemination of new requirements;
- Aircraft and equipment manufacturers provide training and support for new aircraft and equipment;
- Major infrastructure development projects will normally include the cost of training;
- Government-funded national export development corporations, focusing on infrastructure development may include funds for training;
- Crisis disaster relief – where funding is provided by UN or other related agencies;
- Sponsorship may also be available through international financial institutions and regional institutions, such as the Asian Development Bank, the European Commission, the African Development Bank, the Dubai Development Bank, etc., as part of State-driven projects; and
- Finally, ICAO, ACI, and IATA have special funds for developing nations that target specific areas of activity such as safety and security.
The above list is not exhaustive, providing a few of the typical substitutes to existing commercial sources of funding.
How can we Measure the Value of Training?
A key factor an organization must consider when budgeting an expense is the quantifiable return on investment (ROI), for investing in training. But how can it be quantified and how do we ensure that organizational and training objectives have been met?
The process for evaluating training effectiveness is a substantial cost in itself and trainers have struggled for years with the concept of how to demonstrate this. Many organizations use the Kirkpatrick Model® which focuses on the return on expectations (ROE). Though this is achieved by building a ladder of expected results by identifying the leading indicators, it is not easy to put a monetary value against this.
What is the Way Forward?
There is no miracle recipe for continuously changing the way we do business to remain relevant and financially viable. There are true costs associated with developing and delivering quality training and the real value associated with receiving that training needs to be compensated financially, whether directly or indirectly.
A word on quality: the air transport industry has built its reputation by defining and upholding the highest standards in safety and security. These standards are withheld through human, physical and technological processes and systems that come at a cost. Everyone can agree that this cost is an investment which sustains the industry’s future. Surely the same could be said about training. As the core performance driver of the industry’s human element, training deserves all our attention, its fair share of resource allocation, and a commitment to quality that is equal to what we have invested to make our industry flourish.
About the Author
Guy Brazeau is presently Director, IATA Training and IATA Consulting and has more than 40 years of experience in aviation, 30 of which have been at the international level. Over the years, in addition to occupying a number of senior management positions within IATA, Mr. Brazeau has worked as a project director, lecturer and/or consultant in more than 50 countries on airport, airline and civil aviation-related projects. In addition, he was also recently a lecturer of the Airport Management course at one of Canada’s most prestigious educational institutions, McGill University.