Although contact center training and development costs can be in hundreds of thousands of dollars, it is an investment with worthwhile ROI.
By Colin Taylor
Sometimes it seems inevitable that every time a budget is approved with funds allocated for new, additional, or improved training, something occurs and the training is the first thing removed from the budget. We have heard this refrain many times over the years. From the perspective of senior management, Training looks like a safe place to cut:
“We will be no worse off by cutting here than were are today.”
I would agree that this statement is true. However, if you are bleeding, staunching the wound might be a better approach than the status quo of continued bleeding.
Training, coaching, and personal development must be viewed as an investment. Only seeing the cost side of the equation is a common blind spot. It is not about the upfront cost; it should be about the downstream benefit.
Typically, when we think about the cost associated with new agent onboarding training we think of the trainer, the training room, the students being trained, and the cost of each of these. Trainer for 4 weeks at $25/hour including benefits is $4,000, plus a class of 20 new hires at $15/hour for 4 weeks, is another $48,000, plus the cost of the room, and perhaps some training aides, branded merchandise, etc.
Of course, if the training is remote, then no training room may be required. Our cost is then $52,000, correct? Well yes and no. Those costs are correct as far as they go, and these are the costs that can be saved by canceling or postponing a training session, but this is just the tip of the iceberg. The most expensive element of any training is the development and maintenance of the training content and curriculum.
Typically in the pre-COVID world, a training session consisted of the trainer standing at the front of the training room dispensing knowledge by reading PowerPoint slides. In this approach, the Trainer is the central figure and was described by Alison King as the “sage on the stage,” the one who has the knowledge and transmits that knowledge to the students “who simply memorize the information and later reproduce it, often without even thinking about it.” The most effective adult learning places the trainee or student at the center of the process and is a “guide on the side” rather than a “sage on the stage.”
That said, many organizations today still employ PowerPoint slides and a “sage on the stage” approach. The cost to develop training to be delivered by the “sage on the stage” employing PowerPoint slides and screen-shots is often a fairly straightforward process with the task being completed by a trainer, supervisor, or team lead over a few weeks to a few months. Even at the $25/hour rate cited above and a 2-month development period, the development cost would be approximately $8,300. Of course, you can certainly spend more time developing content, but if your approach is “sage on the stage,” your training will not be as effective as it could be.
Becoming the “guide on the side” and developing training that supports adult learning is more complex and more expensive, but also more effective. Such trainings are learner-driven, the student takes responsibility for learning and can work on their own at times and check their progress. The training is experiential: every day the student gets to see their training in practice and get to employ it themselves. The training employs multiple delivery modes and elements (self-study, peer to peer, small group, large group, simulations, quizzes, and exams) to support different learning styles and support teamwork and leadership skills.
Creating this adult learning focused training requires different tools to support the different modes of delivery and collaboration. In practice, one hour of finished training content can cost $1-$2,000 to develop. So a 4-week training could easily see a six-figure development cost. If we use a four-week (160 hours) new agent onboarding training and we assume a development cost of $1,500 per training hour, the result is $240,000. There is certainly a significant variance between $8,500 and $240,000 and there is almost certainly a significant variance in the results.
Our total costs are now $240,000 to develop the training and $52,000 for each training session held. In addition, the training needs to be maintained with the content being updated or retired based on changes to the business, policies, or SOPs. To provide for this cost we can assume that these activities are completed by a content manager at the rate of $50,000 per annum. If we hold one “new agent onboarding training session” per annum our total costs are $342,000, If we hold one session per quarter the total cost becomes $498,000.
Better trained staff feel more comfortable, they are less anxious, less stressed, and more engaged. Better trained staff perform better, deliver better results and quality, have higher FCR, make fewer mistakes, and their work requires less correction and rework. In short, they progress up the learning or proficiency curve faster and reduce the time required to achieve competency. If it costs $10,000 to replace an experienced agent who leaves with a new agent and you can reduce your absolute attrition by 50 agents, then you will have broken even. For more details on the true cost of attrition see our post Understanding your Contact Center Costs: Attrition.
One client, that we worked with, achieved break-even in less than 90 days through a shorter training duration, higher quality, FCR, and less rework. Any reduction in the contact center attrition was a bonus. To download a white paper on attrition, click here.
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(Jun 10, 2022)