Training Cost Justification (ROI)
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... for our PLC and Electrical Training Video Courses.
Reduced Downtime and Operational Cost / (Video training cost / Number of employees) = Increased Profits
A maintenance manager recently asked how to cost-justify the purchase of our PLC and Electrical Training Video Course to his upper management. We thought it may be helpful to you if we share our reply here. This is not all-inclusive, just a quick review of some of the main cost justification points as they relate to our video courses specifically. You can make your manager aware of the few facts below which may help you with the cost justification.
- After just 3 hours of downtime saved or reduced by gained knowledge, the training course will be paid for.
Three hours of downtime saved to equal the full cost of the video courses is a conservative figure. In a paper manufacturing company, 1 hour of downtime can cost $10,000. So in that example, 1 hour of downtime saved would pay for the course many times over. After the course is paid for, all future downtime reduction and operating costs saved by the training will be an addition to profits and bottom line for many years to come.
- You can train all employees with the video course.
At just the cost to send one employee to a seminar or off-site training, you can pay for this course and training all the rest of the employees and even future employees! So the cost per employee of training keeps on reducing, and the savings grow exponentially in both training cost and downtime reduction.
- Investing in your employees by providing additional training increases the employee retention rate.
Your executive management is already well aware of the importance and savings from employee retention. But it doesn't hurt to slip in a reminder.
- It also helps close the knowledge gap between employees.
The knowledge gap between each employee and more importantly the knowledge between a new employee new to the work world (student just entering the workplace) and a seasoned long-time employee.
- It's a great cross-training tool.
The cost benefits of cross-training have been known and utilized for a long time now. Just another reminder to upper management during the cost justification process. Both of the two points above make your facilities more sustainable over a long period of time.
Also for budgeting purposes, your manager may want to share the cost not only on the maintenance and engineering budget but also share on the HR departments and Safety department ledgers.
Typically the above should easily cost justify the purchase of this training. But if not, you could also recommend an autonomous training program for operators. Operators become more familiar with their equipment and maintenance operation increasing their understanding, involvement, and buy-in.
Of course, you may know some of these already and have other cost justifications not mentioned here.
Related training ...
Industrial Electrical Training Video Course (10 DVD Set w/ workbook or Software version)
PLC Training Video Course (10 DVD Set w/ workbook or Software version)
True Down Time Costs Analysis - ROCE accounting [eBook]
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