How to Plan for and Justify the Cost of a Management Training Program

How to Plan for and Justify the Cost of a Management Training Program

At RPC, we’re often contacted by HR professionals who are gathering information and prices for an in-house management training.  And, invariably one of the first questions we’re asked is,
“So, how much does a management training cost?”
And, the answer we always give is “it depends” until we can gather more information to provide a proposal.  The reason is that there are so many variables to how our training programs are delivered:  instructor-led classroom training, webinars, virtual classroom training, blended learning methods that incorporate both online/virtual and classroom.  Other factors that determine pricing are length of program, location of program, content of program, and number of attendees at the program.

So, key questions:

• Will the training be on site at your organization’s location, and if so, where?
• Will the training need to be delivered in multiple locations?  In other words, will the instructors need to travel to multiple sites?
• How many days of training and over what period of time?  Monthly, Quarterly, Annually?
• When is the training needed and why?
• Is the training being combined with a corporate retreat, quarterly meeting, annual conference?  If so, then the dates for the training become one of the most important drivers as there is probably very little wiggle room regarding the specific dates the training needs to be delivered.
• How many attendees for the training?
• Are all attendees fluent in English? Is the training needed in another language?
• What is the budget for the training?

Other key questions we need to have answers to:

• Why is management training needed?  In other words, what are some of the behaviors that lead you to believe that a management training program will improve or change?
• Is the training needed because of a legal consent decree, such as in the case of a harassment or discrimination lawsuit?
• What type of training has the organization invested in in the past?  And, how effective was it?
• How supportive is senior leadership in implementing the training?  In other words, is HR on board with wanting management training but senior leadership is lukewarm about it?

As for how to justify the cost to senior leadership, aka the decision makers, it is critical that HR have a plan in place before presenting any proposals.

1. HR needs to have the facts of the underlying problems/management behaviors that are driving the need for management training in the first place.  As an example, we often hear that “managers just don’t document” or “our managers avoid conflicts with employees.”  Ok, so we have a need for training around managing employee performance.   That’s an example of the kind of information we need to ensure the curriculum we build will hit the mark.
2. HR needs to have an understanding of what (if any) training has been delivered in the past.  Sometimes if a particular program delivered (often years ago by someone else) was not effective a senior leader will still hold onto that and cite, “well…the last time we did this with that guy…what was his name? Well, it wasn’t very good…”  And, they often perceive that if they do “management training” again, it will be a repeat of the same experience with “that guy” or whatever company was used.  To us, that’s sort of like the boss saying: “I know HR that we need to go to this Katy Perry concert, but the last concert, Madonna, that we went to about 10 years ago wasn’t very good…”  You see?  A 10-year ago Madonna concert is a totally different scenario than a Katy Perry concert today.  Apples vs. oranges, but yet leaders will still try to draw the completely unfair comparisons. However, decision makers often rely on their previous experiences for decision making.  So, be prepared to present how this program, our RPC Leadership Learning Track for Management Teams, is entirely different than the training the team may have experienced in the past.
3. HR also needs to know what the actual budget is for the training, and know what the costs are (really) for good training.  The notion that you can send managers and supervisors to the local hotel for $199 per person may actually be what the boss thinks training should cost.  That’s again comparing apples and oranges, as a one-day seminar is about 3-4 contact hours of actual training (backing out lunch, breaks, and sales pitches from seminar leaders to peddle books and other materials.).  RPC management training programs are entirely different than the one-day seminar, as our programs are customized 6-classroom session programs, which is a total of 36 contact hours of training, delivered over multiple quarters, on site, and also includes legal compliance training by experienced training instructors.  So, be prepared to combat the boss’s perception of what training should cost.  Also, the current benchmark for how much companies spend per employee-per year on training is about $1,300 according the ATD’s State of the Industry Report.

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