5 Practical Ways Small Businesses Can Cut Down on Expensive Training Costs

8 min read

Training costs often take up a large part of operating expenses.

Many businesses want to have high employee engagement among teams yet require flexible workplace skills and stronger adaptability among employees. As a result, employee training becomes a prerequisite that companies can’t choose to ignore. 

If you want to get the best out of your employees, you’ll have to cater to their training and development needs. 

We’ve all experienced the transition to a hybrid work model that came from the COVID-19 pandemic. To make employees comfortable around these changes, training may be more than necessary. As per Statista, training costs per employee are USD 1308 annually. 

According to Harvard Business Review, globally organizations spend around USD 400 billion per year on employee training. While big corporations may be comfortable around these exorbitant costs, the same may not be true for small businesses.

Employee Training is Necessary Regardless of the Cost

As the owner of a startup or a small business, it’s understandable that you want to avoid inflated training expenses.

However, choosing not to provide any training to your employees won’t be a great idea in the long run. As per Lorman, 76 percent of millennials assert that workplace training and development are important values. To add, companies that do not have a well-defined training framework are more vulnerable to high employee turnover rates. 

From an employee’s perspective, training is an essential part of their learning and development in the workplace. The absence of it can lead to disengagement. As a result, companies that don’t embrace training and development in their work culture may attract low engagement and retention.

Ironically, this causes more financial woes than proper training would.

For this reason, excluding training costs from operational costs may not be the wisest decision. A better idea can be to cut down on employee training costs by finding more practical ways to offer effective hands-on exposure to employees.

Having said that, this blog highlights some worthwhile ways in which businesses can cut back on employee training costs WITHOUT depriving employees of their fair share of learning opportunities.

Let’s get started to see how you can save a large part of your operational expenses. 

Five Worthwhile Methods for Reducing Employee Training Costs 

1. Introduce Mentorship Programs

“The key to being a good mentor is to help someone become more of who they already are and not to make them more like you.” – Suze Orman 

Including mentorship programs in the workplace can be a smart move to reduce training costs. Not only does it foster a continuous learning environment, but it also helps promote a positive company culture.

With effective mentorship programs in place, employees get to learn from their direct superiors or managers on an everyday basis. This can prove to be far more effective than training modules that only last a few hours.

One of the best things about mentorship programs is that they offer a personalized learning experience. You can have employees tag along with their closest managers under flexible mentoring arrangements to facilitate continuous learning. Employees will be able to learn in a more engaging way when they see their mentors perform well in real and complex situations. 

Mentorship programs also promote a sense of belonging among employees. They’ll be happy to know that you’re considering their personal growth and desire to add value to their development. In this way, you’ll be able to increase the levels of engagement and retention in your workforce.

Which in the long run, means you can prevent exorbitant training and employee turnover costs with mentorship programs. All you need to do is to step out of your usual “boss” shoes and step into a mentoring role!

2. Delegate Authority

“We accomplish all that we do through delegation- either to time or to other people.” – Stephen Covey

Do you delegate authority and responsibility to your team members?

Do you show enough trust in them to let them handle some important responsibilities on their own? If the answer is no, then you’re missing out!

Delegation is an excellent business strategy that offers a wide array of benefits and helps a company grow bigger and better. 

It’s normal to have to want to take control of everything. You don’t want to make mistakes in the early stages of your business by handing important tasks over to some of your employees. However, delegation is neither a mistake nor a gamble. 

When you share authority and responsibilities with your team members, you give them hands-on experience in real tasks and high-pressure situations.

Of course, regular exposure to actual workplace scenarios can accelerate employee development in a more effective way than training sessions in the conference room. Under your guidance and supervision, they’ll get to perform crucial tasks and learn critical responsibilities.

This adds incredible value to their learning and motivation. They may make some mistakes in the initial stages but your credibility and experience can compensate for it.

All in all, delegation is an underrated business strategy that can work wonders for a business. Apart from replacing a host of training programs, delegating also promotes greater trust-building. Additionally, it can also be a solid way to cultivate exemplary employee engagement, which all begins with changing your perspective on delegation.

3. Create Leadership Opportunities

“Leaders become great not because of their power but because of their ability to empower others.” – John Maxwell 

Leadership skills are best learned through hands-on situations that demand strong characters.

Maturing as a leader through actual scenarios can have a greater impact than corporate training sessions on leadership. Having said that, the key to grooming leaders within the organization is to create leadership opportunities for your employees. 

Put your employees in leadership roles and see how they handle themselves. Every organization wants to invest in its employees to find promising leaders that can take up crucial roles in the near future. Having said that, a lot of companies are inclined to conduct training modules on leadership. By offering real leadership roles to your employees, you can avoid the cost of leadership training and also get much better outcomes. 

Creating more leadership opportunities doesn’t necessarily mean a change in job roles. You can let your people lead during employee engagement activities, workplace discussions, and so on. The bottom line is that every leadership prospect that you offer to your team counts. Train them to be leaders by giving them on-job experiences and not lessons on leadership.

4. Replace Workshops With Online Training 

“Online learning is rapidly becoming one of the most cost-effective ways to educate the world’s rapidly expanding workforce.” – Jack Messman 

Isn’t it strange how some companies are still hosting training sessions at lavish hotels and paying for conference rooms, travel fare, and food when they can simply be taking advantage of the many digital trainings available and host them online?

 With the ongoing digital revolution, companies should embrace the opportunities of online training and Learning Management system (LMS). 

As per Global Market Insights, the market for e-learning driven by technologies like LMS is expected to grow at a CAGR of 21% to reach a value of USD 1 trillion by 2027. Talk about exponential growth! 

This shines a light on how there are massive opportunities for training employees in a cost-effective way through the integration of e-learning and LMS. The world is getting smarter every day with innovations like these, are you keeping up with the pace? 

It’s time that companies replace workshops with online training and with the robust technological advances we have, ensures the efficiency of remote training. Online learning offers personalized learning to your employees and helps you save hefty amounts of operational costs. 

5. Get Specific With Training Programs

 “Clarity of mind yields clarity for direction.” – Lloyd R Shisler 

To better manage training costs, you need to identify which training modules are relevant to your organization and which modules aren’t needed. Rather than offering generic training to all employees, you have to be specific with your training programs.

Lastly, you need to be certain whether a training module adds any value to their work or not. 

For instance, if you have a food and beverage company, providing communication skill training to your manufacturing team won’t help in the long run. For them, offering standardized training in compliance for food and beverages is a lot more useful. 

Bottom line: You need to look at the big picture when deciding which aspects of training are needed for your team. As the owner of a small business, you have to be specific about your plans and budgeting.  

With a more specific approach, you’ll eliminate unnecessary training modules as well as prevent financial losses in employee training. When it comes to offering different training programs to your employees in various units, having a vision that aligns with your goals is vital.


In the end, small businesses need to be careful and more particular about their expenditures.

The same is true for high employee training expenses which can be too overwhelming for small businesses. With a high priority being placed on employee training and growth, completely eliminating training costs isn’t a feasible option. Having said that, the methods listed above can prove to be game-changing in helping businesses reduce operational costs as well as cut down on employee training costs.

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