It’s a fiercely competitive business world out there today, and in every segment of operations – from marketing to manufacturing, and HR to finance – organizations expect everyone to do more with less! And with record levels of inflation taking its toll on L&D budgets for travel and hoteling, corporate training programs are no exception. However, businesses have found an innovative way to battle the skyrocketing cost of in-person corporate training – they’re pivoting to online training.

The Great Digital Transformation

To stay competitive, and to control office overhead expenses, businesses are embarking on a grand digital transformation revolution and embracing a digitally-connected workforce. Across the board, organizations are finding less costly, and more efficient ways to do the things they did just a few years ago:

  • Where teams of experts drove downtown, or flew out of the city, to attend business meetings, they’re now Zooming, WebExing, Teaming, or Google Meeting
  • Where signatories to critical documents faxed, printed, signed, and couriered contracts and agreements back and forth, they’re now using DocuSign, Adobe Sign, and DocHub to electronically move digital documentation through their workflow
  • COVID has precipitated the pivot to online storefronts, away from traditional bricks and mortar operations
  • Tele-health has changed how physicians now consult with patients – remotely first, reserving in-person interactions for only when necessary
  • Realtors, who traditionally did home showings in-person, have now pivoted to virtual showings with prospective homebuyers
  • Businesses are moving away from storing and sharing documents via local storage, LAN’s and WANs, and pivoting instead to the cloud – thanks to Amazon Web Services, Microsoft’s OneDrive, Apple’s iCloud, and Google Drive

The great digital transformation has left almost no aspect of the corporate world unchanged. Strikingly, the pivot to a “remote-first” workplace means virtual work is now the norm and not the exception as it was prior to COVID. And that means L&D teams must now transform themselves and adapt to a digital framework. The way they’re doing that is by pivoting away from in-person learning, and embracing online, virtual training.

Counting The Costs

When organizations arrange in-person training, there are multiple cost elements to contend with – travel, transportation, and lodging being the heavy hitters. The U.S. Travel Associations’ Travel Price Index (TPI) is an excellent proxy for how inflation is making in-person training more costly than ever. The Index measures the cost of traveling away from a home base in the US – a typical requirement of instructors and/or learners participating in the in-person training.

On a year-over-year basis, the TPI increased by a whopping 16.7%, compared to (inflation) the consumer price index (CPI) – which clocked in at 7.9%. The cost of motor fuel increased by 38.1% y/y and was up by 47.6% compared to 2019. On a y/y basis, airfare, and hotel/motel expenditure – a requirement if staff and instructors travel out of town for training – increased 13% and 29% y/y respectively.

Looking Beyond The Obvious

Costs, such as airfare, traveling by car or train, and boarding and lodging are obvious elements of any in-person training cost. But there are other costs associated with organizing and implementing an in-person-first training program. Planning and logistics take time and money. Booking venues, printing, binding, and distributing course materials are cost drivers. And the requirement for outfitting the venue with appropriate technology costs money too. Clearly, for L&D teams looking to do more with less, these costs make in-person learning a less attractive training model.

To get a clearer picture of the cost-prohibitive nature of in-person learning, one must look beyond the obvious. And doing an objective assessment usually helps:

  • What is the duration (number of days) of the course?
  • Will instructors and/or participants travel out of town?
  • If so, how many, and what will it cost in terms of airfare, travel, and accommodation?
  • Do you have to backfill staff attending training?
  • Are there other opportunity costs – E.g.: An instructor could be planning an update to corporate training material instead of traveling out of town
  • Are there personal “inconveniences” caused due to such travel – e.g.: additional caregiving arrangements, alternative childcare plans

Most training managers don’t factor in such costs during the annual budget preparation exercise. When you add up these costs – the obvious and not so obvious ones – the total cost of in-person training is much higher than most L&D budgets portray.

The True Value of Pivoting Online

What if there was a way to dramatically cut training costs? There is!

Organizations that pivot to an online-first training model enjoy tremendous benefits – in terms of cost, quality, and effectiveness. Some value proposition components, by shifting to virtual learning, include:

  • There are no travel, boarding, lodging, meal, or other mobility costs associated with staff
  • Because trainers won’t travel, it dramatically reduces instructor fees – even if you embrace a virtual instructor-led training (VILT) model
  • Because virtual training can occur quickly – compared to in-person, especially in the asynchronous mode, it results in faster turn-around times
  • Online training technology enables better engagement, higher productivity, and greater knowledge transference
  • The use of learning analytics, and other online data collection and analysis tools, presents an opportunity – not available to in-person learning – to quickly re-assess and fine-tune the course. This is a classic application of the “fail early” principle, which is also a cost-effective approach to making incremental improvements to training, without waiting to update ineffective content until the next batch of learners arrive
  • The on-demand and always-available characteristic of virtual learning means there are almost no costs associated with a learner repeating or re-taking a course any number of times and at their own leisure and schedule

The use of Virtual Reality (VR), 3D simulations, augmented reality (AR), gamification, branching scenarios, and richer (graphics, audio, animation) content also leads to a better overall learning experience. Other virtual training tools, such as virtual whiteboards, private chat sessions, moderated break-out groups, and immediate feedback, make online training more effective than its in-person counterpart. More importantly, online learning can reduce the costs of practice, retraining, revision, and refresher training too – something that’s essential to ensure effective knowledge retention and transference to the workplace.

Parting Thoughts

Tight market conditions, COVID-predicated uncertain economic outlook, and spiraling inflation have all conspired to make in-person training exorbitantly cost-prohibitive. Couple that with the overall trend towards the grand digital transformation, and training has undergone a paradigm shift. If only money was no object, things would be different. But L&D teams feel budget-squeezed and must make every dollar count. They’re asked to do more with less, like everyone across the organization.

Thankfully, virtual training has proved a lifesaving force in corporate training. Not only has online training allowed L&D teams to do more with reduced budgets; but it’s allowed them to do it better, faster, and more efficiently and effectively than in-person learning.