How to Reduce Training Costs Without Cutting What Works

You've probably seen some version of this benchmark floating around: companies spend an average of $1,254 per employee on "direct learning spend" each year.

It's a useful number, but it's misleading.

While it tells you what companies are generally spending, it doesn't tell you where that money goes or how it translates into business outcomes.

Benchmarks are useful context. I just don't recommend using them to guide your budgeting decisions. What you need instead is a clearer view of where your training spend goes, and how to reduce it without cutting the training that works.

I'll walk you through how to build an accurate picture of what training costs for your organization, and then how to identify the changes that will reduce spend without reducing impact.

💡For more on L&D budgets, this guide is a good place to start.

How to measure your training costs

Before you can cut costs, you need to know where your money is going. I know that's easier said than done.

U.S. companies invest more than $100 billion in training each year, and at most organizations, that spend is spread across cost centers.

Step 1: Document training costs

You want to paint a portrait of your training spend. You’re aiming for realism (more Courbet than Picasso, at least in the later years).

That portrait should include:

• Content creation and delivery costs: this includes any L&D, SME, and third-party content creation and delivery
• Employee time: the time employees spend in training
• Travel, facilities, and logistics: flights, hotels, transport; venue rentals; materials like workbooks or pens, food and incidentals (those afternoon boba runs add up)
• Tools and platforms: LMS/LXP, learning tools, content platforms, and videoconferencing systems used to create, deliver, and track training
• Maintenance and updates: the costs associated with revising or changing content

Step 2: Estimate the totals

Once you have a clearer image of your costs, you need a way to estimate them. We're looking for a rough number here, and the way to get that is to use a formula like this:

Total training cost = content creation + delivery + employee time + maintenance

Or, if you want a per-employee view:

Training cost per employee = total training cost ÷ number of learners

Example: a leadership program

Think about a high-spend training. Let's say an in-person leadership program, with about 250 managers and ICs who fly into headquarters to attend. The purpose of this program is to build alignment around how work is prioritized according to the business objectives. This program's costs include:

• Content creation and delivery = $150,000
• Employee time (4,000 hours at $50/hour) = $200,000*
• Travel, facilities, and logistics = $75,000
• Tools and platforms = $25,000
• Maintenance and updates = $50,000

That's $500,000 to run the program, which broken down by employee is $2,000 per person.

Sometimes it's more helpful to see how these costs are distributed, so in this case:

• Content creation and delivery: 30%
• Employee time: 40%
• Travel, facilities, and logistics: 15%
• Tools and platforms: 5%
• Maintenance and updates: 10%

Why do I like these two views? First, employee time and delivery tend to make up the majority of training costs. That's why changing training format and delivery can have the biggest impact on spend.

*Note: For this example, employee time is calculated using a blended fully loaded rate of ~$50/hour, which is approximately a $100,000 annual salary.

Step 3: Separate out the costs you don't control

Going back to our leadership program, let's look at the travel line item, which is about 15% of overall spend. Some participants are local, so there's no travel costs for them. Some fly in for just the two days, while others choose to extend their stays for business purposes. For that group traveling in, are you responsible for all of those costs? Just some? None?

If, at your organization, travel is budgeted by team cost centers, then you can remove that cost from your budget. You still need to be a responsible steward of that spend, which may mean considering if it is more beneficial to redesign the facilitation of the program. But it does not mean absorbing those costs into your training budget.

That's why I start any cost audit by separating out what L&D controls from what requires shared accountability with the business. Draw that line clearly and the decisions become much easier.

Step 4: Calculate better benchmarks

Now you're ready to calculate better training benchmarks. That requires segmenting costs by audience, because in most organizations, a small number of programs account for a disproportionate share of spend.

For instance, if you have an executive coaching program, you know that top coaches can charge $30,000 or more for a six-month engagement (we're in the wrong business). If you have ten executives in this program, how does that impact your per-employee benchmark?

That's why figures like $1,254 per employee are misleading: when you average everything into a single number, you lose the detail that matters. Group your spend by audience: executives and senior leaders, managers, or new hires. Then, for each group, calculate:

• How much time people spend in training
• How often content is delivered or rebuilt
• Whether programs rely on SMEs, facilitation, or external support

This granularity will give you benchmarks that are much more compelling.

5 strategies to reduce training costs

Now your portrait of training costs is taking shape. Now to why you're really here, how can you cut those costs? The fastest way is to stop doing work that isn't driving impact. (Of course, this presumes you're carefully measuring impact.) That means:

• Keeping and scaling training people use and apply in their work
• Improving training that shows value but isn't leading to consistent results
• Removing what isn't being used

I'm going to challenge you to take a step back and look at that portrait for some more obvious candidates for removal. Like a program that has historically low attendance, or a third-party content library people begged for, but seemingly never have the time to use. It doesn't mean that these weren't well-designed or thoughtful investments. More than likely, they were failures of marketing, which is good feedback to have.

Then I want you to dig into your evaluation. Conduct focus groups with your target audiences or ask your HRBPs. Get more information so you can decide how to go about making the improvements I recommend next.

1. Design training for sustainability

Every time you run a live session, you're spending money. Even if it's on Zoom, you're still using facilitator or SME time and pulling employees away from their work. That may be part of the job, but it should be used more deliberately.

I want to challenge you to revisit how training is delivered. That could include:

• Moving instructional content out of live sessions
• Shifting content delivery to asynchronous formats
• Using short modules for repeatable work
• Tracking where managers or facilitators are explaining the same thing over and over
• Keeping live time for practice, problem-solving, and feedback
• Choosing tools that make content easy to access, reuse, and update, and getting rid of those that don't

This shift has a measurable impact on cost.

Going back to our leadership program example, if 50% of baseline instructional content is moved out of live sessions and into asynchronous formats, you reduce both facilitator time and the time employees spend in training.

Because employee time and delivery account for ~70% of total cost, even a partial shift to asynchronous delivery could reduce overall program cost by 15–25%, depending on how much live delivery is replaced.

As a rule of thumb, if the same content is delivered more than three times, it can usually be turned into an async module.

If you’re concerned about engagement, the solution isn’t to keep content live, it’s to rethink the design. A flipped classroom model may actually increase engagement.

👉 If you want to try that out, here's an editable example of how you can deliver asynchronous content to leaders.

2. Evolve content creation

Creating training is almost always more expensive than expected. Once you factor in SME time and production overhead, costs add up faster than most teams anticipate.

I've worked with talented graphic designers who could craft compelling visual narratives, at a steep price. That made sense when every asset had to be built in custom tools.

That’s no longer the case. AI has changed how training content gets created, and your workflow should evolve too: 

• Use AI to generate assets that don’t require additional resources
  
• Be selective about high-touch production
  
• Capture SME input once and build from it
  
• Reduce dependency on production cycles
  

DuPont’s Operational Excellence and Development team has seen significant gains by shifting to AI video, reducing reliance on external production and enabling faster content updates. They’ve reduced production time by up to 80% and saved as much as $10,000 per video.

In a traditional model, video production requires scripting, filming, editing, and coordination across multiple stakeholders. With AI video, those steps are compressed or removed entirely. See how below.

If you're running onboarding or product training at scale, that compression matters. Those are exactly the programs that change most often and reach the most people.

3. Plan for updates

Your training will become outdated — it's inevitable. Unfortunately, that might happen by the time you're ready to hit publish. If you've ever been responsible for compliance training, you know this is especially true. By the time you get something approved by SMEs, there might already be a new version of a policy or a small, but significant, change to a process.

Your content design needs to support that, which means:

• Keeping core concepts stable. Isolate steps, screenshots, and policies that need regular updates
• When something changes, updating only that component
• Making one person responsible for keeping content current
• Triggering changes from product releases or policy updates, as opposed to quarterly refreshes
• Retiring content that is no longer useful

Don't hesitate to automate some of this work with AI, while keeping a human-in-the-loop.

4. Reduce rework with localization

I once worked at a company with a global GTM team and regional sales teams. Each group created its own version of training for new product releases. Over time, this led to inconsistency in how work got done. Avoid message drift by:

• Building one source of truth that gets carefully versioned with updates
• Using the updated source version for localizations
• Giving regional teams access to the latest version so they're always working from the same source

If you're curious how this works, look at Mondelēz International, a global snacking company that makes things like Oreos and Cadbury Eggs. They operate across more than 150 countries with 91,000 employees. To ensure their training is consistent, they build modular training videos with AI, creating one source that is then localized with a few clicks.

This workflow keeps teams aligned, reduces duplication, and makes it much faster to roll out updates across regions.

5. Streamline administrative tasks

A surprisingly significant amount of L&D time is spent on administrative overhead.

Training takes time to administer. I once had a fantastic project manager create elaborate Excel playbooks (with VLOOKUPs into our HRIS reports and all) for our flagship programs just to track all the logistics. Depending on the size of your organization, managing these playbooks can become a full-time job, but it doesn't need to be anymore.

If you haven't already, brainstorm with your team how your tech stack can help you:

• Automate enrollment and access
• Trigger reminders based on progress
• Build follow-through into the workflow
• Support managers with simple prompts in a messaging channel
• Capture feedback as part of the learning experience
  

How can you tell if these changes are working? 

Whether you've tried one of these strategies, or something else, you need to assess whether the changes you implemented are working.

On one hand, that means assessing cost savings. That's why you're here and what you're trying to accomplish. On the other hand, that means measuring business impact, which is notoriously challenging. It's also why I haven't promised any specific cost savings in this post, because that oversimplifies the work we do.

I wish I could say that bringing AI into your administrative workflows will save you an FTE salary that you could then use on a more strategic role, or that you can replace a clunky LMS by vibe-coding a tracking solution for compliance. But that's simply not realistic. Instead, what I want you to focus on is measuring if your team is operating more efficiently and using resources more deliberately. To do so, you can track operational metrics such as:

• Time to produce a module, from draft to publish
• Update cycle time, how quickly content can be revised when something changes
• Reuse rate, how often content is used across cohorts or regions
• Live vs asynchronous delivery mix, the share of content delivered live versus on demand
• Repeat questions or re-teaching signals, where managers or trainers are filling gaps

From there, you can connect those changes to business impact, and create a narrative behind your cost cutting efforts.

How do you build a business case for reducing training costs?

If you're feeling overwhelmed about where to start, I recommend picking a high-cost or high-visibility program (our leadership program was both).*

Identify the true costs and strategies for mitigating them, so you can approach your stakeholders with clarity about what's changing, why it's changing, and what that means for the business.

It's useful to show time saved or cost avoided, but what matters more is where you're improving how work actually happens, whether that's faster time to competency or stronger alignment with organizational KPIs or OKRs.

*A more robust calculation framework, like the Phillips ROI method, is often better suited for stakeholder review.

Once you've established that level of clarity, make the tradeoffs explicit. For programs you're cutting or reworking, call out the opportunity: what does this free up? Where do those resources go instead?

Some decisions will need more explanation. Reducing in-person training time, especially for leaders and managers, may get some pushback. Anticipate that by proactively sharing the updates with your stakeholders.

If you're wondering how to deliver that, the executive summary template below can help you communicate it clearly.

👋 If you're looking at how AI video fits into that model, the team would love to show you. Book some time with them here.