E-learning: a profitable investment

E-learning: a profitable investment
To calculate the ROI (return on investment) of a learning solution you have to know which variables to use. For example: when you want to compare the ROI of e-learning with classroom learning, these variables are different than in the comparison between initiating a learning solution compared to doing nothing. A sample calculation.

E-learning compared to classroom learning
Suppose you have an organization of 1,000 employees and everyone should be trained in Information Security.

Classroom training
Information Security is a classroom training of half a day with a maximum of 20 people at a time. So 50 sessions are needed. Luckily, you have internal meeting rooms for which you have no additional costs.
A trainer costs € 500, – per session. An employee costs on average € 250, – per half day (€ 62,50 per hour). About 200 of the 1,000 employees work at a different location and must travel with average cost of € 50, -. The development of the training itself costs € 2000, -.

Employees 1000 sessions x 250 € 250 000, –
Development training € 2000, –
Trainer sessions cost 50 x 500 € 25 000, –
Travel expenses of employees 200 x 50 € 10,000, –
Total € 287 000, –

Total cost training class: € 287 000, – or € 287, – per employee.

Half a day of classroom learning represent on average one hour of e-learning. Having an e-learning module developed, can be quite expensive, depending on the duration, complexity, usage of media etc. On average, it takes about 180 hours to develop one hour of e-learning (source: Chapman Alliance). Calculating with an hourly rate of € 120, – the total costs are € 21,600, -.

Employees 1,000 hours x € 62.50 62,500 –
Developing e-learning course € 21 600, –
Total € 84 100, –

Total cost e-learning: € 84 100, – or € 84.10 per employee.

As you can see, this is a saving of € 202 900, -. Quite significant for a single course!
Besides this financial benefit, e-learning offers another great advantage. Research has shown that after finishing an e-learning course, students can remember the new information more and better (retention) than after finishing classroom learning. According to the Gartner Group, the retention can be even twice as high (source: www. Gartner.com). Provided that the e-learning offers small chunks of information and a lot of interactivity, exercises and tests. A big plus for e-learning!