The Average Cost of Training a New Employee

Why It is Inevitable for Every Organization


Employees are the backbone of every business organization; they drive its growth and success. However, to perform optimally and productively at the expected standards of your employer, you need to access the relevant knowledge to improve your skills. No doubt, new employee training comes at a cost, but the cost of training a new employee is inevitable for your employer. 

It is an investment that your employer must incur to bring out the best in you and earn your loyalty and commitment and thus ensuring your company is competitive in its sector. The cost of training a new employee is never cheap for your employer, but it is an important task that must be held in high esteem because every employee treasures a job that offers training that aids their career growth. 

According to statistics, 87% of millennial employees rate professional or career growth and development opportunities as important to them in a job. However, despite this revelation in the statistics, about 39% of employees report learning something new in the last 30 days. 

When your employer shies away from the cost of training a new employee, you have the prerogative to walk away from such an organization. In reality, this is a bad omen for such an organization as it can never achieve its goals and desired productivity. According to the US Bureau of Labor, the failure of business organizations to train their employees is costing them about $1trillion in loss annually.

This article discusses the cost of training a new employee, why every employer should incur it and how it can be optimized to bring out the best in new employees.


Cost of Training a New Employee


The process of your integration into a new workplace requires you to be trained for you to function effectively in your new roles. Even if you are joining a new company as a seasoned professional with a wealth of experience, you still need to experience a learning curve to aid you in mastering the company’s culture, routine tasks, and established processes. 

All these will come at a cost to your employer. However, the cost of training a new employee varies because different positions require specialized skills. 

Again, certain variables affect the total cost of hiring and training a new employee, such as the administrative hours spent on the new hires during the recruitment. Also, the demands and skills required to perform the job roles with some level of an efficiency drive up the cost of training a new employee. 

Furthermore, how experienced and knowledgeable the new hires are when taking on a new role determines how much training is needed and how your employer facilitates it.

Cost of Training a New Employee

The failure of business organizations to train their employees is costing them about $1 trillion in loss annually.

—According to the US Bureau of Labor.

The Average Cost of Training a New Employee


According to the Association for Talent Development, business organizations spend an average of $1,252 per employee on training and development initiatives. 

According to Forbes, another report stated in the 2014 Training Industry Report from Training Magazine that the annual training budget of the US small businesses grossed an average of $308,000 in 2014, with the retail and wholesale sector spending more than $500,000. 

The average cost to hire and train a new employee varies based on the following reasons:

  • Company size: the company size plays a crucial role in the cost of training a new hire. The larger the company, the lower the training cost per employee. The smaller the organization, the higher the training cost per employee.
  • The new hire’s skillset: the amount of training an employee needs depends on the current levels of knowledge and skillset, and this varies from an employee to another. Furthermore, there are individual differences in people; some employees are fast learners while others can learn at a slow rate. Thus, the task of upskilling two employees to the same level of expertise will be different.
  • The kind of training: there are different types of training, such as virtual and traditional one-on-one training. Each of them has its associated cost. For example, in traditional one-on-one training, the cost includes the labor cost of the instructors, among others. In contrast, virtual training includes the cost of the technology that will be leveraged. 

Furthermore, an organization could embrace the use of new technology to enhance the efficiency of its operations; this will spur it to incur the cost of training employees on new technology to aid their understanding of the use of the newly introduced technology.

New manager training also comes at a cost for every organization because new managers must be put through leadership, time management, human and other resources management training to enhance their capacity to perform optimally and effectively in their managerial responsibilities.

The task of getting a great value for the cost of training a new hire is centred on the best practices for training new employees, such as the following:

  • Tailoring the training to suit the employees’ needs: in this, the goal of the training is driven towards aiding the new hires to come to speed on time and attain job role mastery.
  • Providing the right employee training structure and adequate training time: here, the new hires are provided with the proper training structure, content, and time.
  • Embracing experiential learning method: this involves training the new hires with practical to aid their understanding.
  • Entertaining the feedback of the new hires: here, new employees will give their feedback on the training, and this will help the organizations know what to do to improve the process to assist them in getting a great value for their investment. 
  • Leveraging technological tools and automation: Using technological tools and automation will help streamline the training process to get the desired results. For instance, introdus, employee onboarding software can be leveraged to train the new hires. As a result, it will simplify the training process and aid the employer in getting an excellent value for its investment. 

Also, it is embedded with helpful multimedia content that will assist the new hires in settling down into their roles.

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