The basic costs are trainer time, materials, and preparation time. Trainer time is calculated on a day rate that can vary from £300 for basic IT skills such as Microsoft Word to £2,000 for management and sales training. This reflects preparation time. If the trainer or training provider has to prepare new material and perhaps folders of professionally produced content, they will charge more.
This means customers must chose from two models: an all-in price; or a charge comprising time, materials and preparation. Melanie Franklin, chief executive of training company Maven, says: “The all-in rate is becoming very popular. Customers say, ‘Tell me the total cost and I can work out if we can afford it’. I feel it’s better to charge a daily rate plus preparation time, cost of materials etc. Though when you break it down there’s a risk of haggling.”
According to Ursula Connolly, managing director, The People Skills Business, charging models for training will change. She says: “Clients are looking for more value for money and flexibility in how they are charged. As clients look for more bite-sized learning then an hourly charging rate may be come applicable. That said, clients will always pay for quality.”
Who owns the training materials?
Agree beforehand who will produce and own any printed material that the trainer or training company may provide. This is especially important if the material comes in hefty folders.
Some suppliers will push the costs and effort of producing these on to the customer and simply send them a PDF which must then be printed and bound. Training managers must decide if it’s beneficial to do this themselves.
Almost certainly it’s better to get the supplier to do it. You must also agree copyright status of supplied training materials – the general rule is that the creator owns copyright but copyright can be assigned to the customer who can then use the materials in future without fear of action for breach of copyright.
Major UK training providers
The annual training spend by UK employers is usually at about £30bn. Only a fraction of this is spent on private training providers. NIACE (National Institute of Adult Continuing Education), in its 2009 report on lifelong learning, estimated there are 12,300 private training providers in the UK, of whom the vast majority will be micro operations. Only 1% of training companies have 250 or more employees. Freelance trainer organisation TrainerBase – which has an accreditation scheme – has about 6,000 members.
NIACE estimated the private training market was worth £2.95bn in 2008 (in terms of money spent with private training providers), although market researcher Key Note reckons it was worth £3.14 in 2009.
Major players include Hemsley Fraser, part of the Demos group, which has 32,000 customers worldwide, and lists about 1,700 subjects in its training portfolio and BPP, which specialises in professional development and qualifications and has its own law and business schools. It employs 2,000 staff worldwide at 40 locations and turned over £165m in 2008-09. BPP was acquired by US education and training company Apollo Global in 2009. UK Training offers courses for senior staff, such as company secretaries and directors. It also provides training in areas such as VAT, employment law and Sarbanes Oxley. Clients include Prudential, Procter & Gamble, and Guinness. Kaplan Financial offers training in various financial areas, many of its courses leading to qualifications. It also offers training in HR.