Employee Training Budget: Just for Large Companies?

Employee Training Budget: Just for Large Companies?

Companies are increasingly understanding the value of training and development. According to Deloitte, corporate training was up in 2013—a solid 15 percent to $70 billion in the United States. And according to Great Place to Work®, which measures policies and habits of Fortune 100 companies, top organizations on average provide salaried and hourly workers with 73 and 58 annual hours of training, respectively, and offer on average $7,375 in tuition reimbursement.

That’s great news for big companies, but what about the little guys? How much does a small, privately-owned company need to spend on training and education to be effective? The American Society for Training & Development reports that small and mid-sized organizations spend $1,605 per employee on training and development—considerably more than than the $1,102 spent by organizations with at least 500 employees.

So what’s the magic number? Take a page from large corporations and look to Training Magazine, an industry publication that ranks the top 125 organizations for employee development. They found that the mean training budget of these companies is 6 percent of payroll, but the key is to track your spending and measure a return on that investment. Consider how the Cheesecake Factory famously invests in training their employees—and also enjoys a sales-per-square-foot rate twice the industry average.

Meanwhile, JiffyLube developed a virtual library of 120 digital video courses used by 20,000 employees who spend millions of hours annually—rendering cost-per-video-view at a mere 15 cents. The company also enjoys an average employee tenure of 12 years, with a promote-from-within rate of 90 percent.

While few small businesses can scale their training to that degree, there are many affordable and effective ways companies of all sizes can staff.


Learning online can be extremely affordable, and many studies have found them to be more effective in imparting information that results in higher rates of user satisfaction and engagement. One example is Lynda.com, which is a deep library of courses that cover professional, technical, and soft business skills. Prices start at $25 per month, per person.

BusinessTraining.com offers certificate programs including those in human resources, customer service, and project management, starting at $397 per course. And edX.com, created in a partnership between Harvard and MIT, is a resource of video courses on topics ranging from the arts, humanities, and sciences, as well as professional development topics like marketing metrics and cybersecurity economics. Many of these courses can be audited for free, or paid for toward certificate programs.

Peer Training

Many companies of all sizes have discovered the benefits of new hires being trained by their peers. This makes the most of the institutional knowledge that senior employees have, and also provides them with leadership opportunities, as well as facilitates communication within the department. Take it a step further and have employees document processes in Google Docs, or with a free video tool like CamStudio or Jing.

Trade Organizations

Seek out industry associations and private conference groups, many of which host smaller training events that may be relevant to your workers. Even if they don’t provide training, they can still provide valuable resources and information that can empower your employees.

Brown-Bag Seminars

Bring in outside experts to your staff with weekly or monthly on-site lunch events. In some cases, these speakers can give talks that are free-of-charge, or for an affordable presentation fee.

To make the most of your development efforts and financial investments, consider these habits of the successful businesses recognized by Fortune 100’s Great Place to Work®:

  • Make training and education a priority for all employees—regardless of rank, seniority, or department. Implement a culture that supports an individual’s efforts to grow professionally and personally.
  • Create training opportunities that are unique to your organization and its culture, as opposed to more traditional training manuals and scripts.
  • Be sure everyone understands the qualities that are valued for leadership roles, and what it takes to earn those positions.
Emma Johnson

About the Author


Award-winning business + personal finance journalist, AM radio host. Former AP staff and MSN Money columnist. Contributing editor @SUCCESS. NYT, WSJ, Forbes, WIRED, WORTH. Founder: WealthySingleMommy.

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