What are the Costs of Training a New Employee?

According to Training Magazine, US companies spend more than $100 billion annually on employee training and development.

Most organizations only calculate the visible costs, including LMS, workshops, training material development, etc. But there are hidden costs as well, such as delayed ramp-up, reduced productivity, manager time, and more. 

That is why onboarding budgets often become larger than expected, even when the hiring volume stays relatively stable.

The good news is that training costs are highly predictable once you understand where the money actually goes.

In this article, we will break down the exact costs of new employee training, including LMS expenses, trainer time, onboarding wages, productivity loss, and course development costs. You will also see practical cost calculations and examples to understand what employee training realistically costs at different company sizes.

Most visible and direct employee training costs

When you make an L&D budget, the first costs you notice are usually the platforms, workshops, and training delivery itself.

The exact amount depends on how you deliver training, how many employees you onboard annually, and whether you build content internally or externally. But there are still reliable benchmarks we can use to estimate the direct employee costs. Let me break the costs down with examples. 

LMS

If your onboarding and employee training are mainly self-paced, one of the first investments is usually a Learning Management System (LMS).

As I was going through statistics, I noticed how LMS adoption became standard in corporate learning. Research.com reports that 90% of organizations actively use learning management systems as part of their learning ecosystem. One of the reasons is that, especially for mid-size and large organizations, LMS helps to reduce training costs. Once training materials are centralized, you reduce repetitive instructor-led sessions, manual tracking, printed materials, and scheduling overhead.

Now, going back to the benchmarks. 

Most LMS vendors use one of these pricing models:

• Per active user
• Per registered user
• Tiered pricing
• Flat enterprise licensing

Across the market, the average enterprise LMS cost is roughly $150–$300 per user annually. Enterprise deployments with 1,000+ users commonly fall between $3–$8 per user monthly. 

Depending on the size of your organization and how often you have new hires, here is how much you would spend on an LMS alone. 
 

But there are not-very-obvious LMS costs you shall take into account. For example, setup fees or migration costs if you are moving to a new LMS. 

Related: LMS Hidden and Actual Costs | Key Pricing Models

Specialized seminars or workshops cost

If you do not yet rely heavily on an LMS, onboarding often happens through in-person workshops, classroom sessions, or external seminars. Here, we need to remember that costs scale directly with the number of sessions you run.

External corporate workshops usually charge either:

• Daily and per session. Based on discussions on Reddit, the average costs for daily workshops are $2800-$5000. 
• Subscription, which can be up to $20,000, as many Redditors mentioned. 

But these numbers greatly depend on the kind of training you are offering for the new employee. For example, professional training and certification workshops from organizations like the Association for Talent Development regularly range between $2,500 and $4,000 per participant. 

Taking all this into consideration, let’s calculate the cost of the specialized workshops. 

And this does not yet include:

• Travel
• Accommodation
• Venue costs
• Employee time away from work

That is why many organizations gradually move repetitive onboarding topics into self-paced formats while keeping live workshops for technical, leadership, or compliance-heavy training.

It usually makes little sense to pay repeatedly for the same onboarding session every month if the material rarely changes.

Course development costs

Course development is one of the most underestimated training expenses because the visible output is usually just a two-hour course.

The production effort behind that hour is much greater. There are two ways we can calculate the development costs. 

• If your internal team is developing the course, you shall calculate the time, salary, and tools they use for the training development. 
• If you hire specialists like instructional designers and project managers, calculate their salary rates, too. 

According to research on Elearning in Mostion, one hour of eLearning content takes approximately:

• 34 hours for low-complexity training
• 49 hours for moderate interactivity
• 116+ hours for advanced interactive content

For example, if you create a 3-hour onboarding course with moderate interactivity, you will spend 147 hours on development (Course length X Average time). 

If an instructional designer earns approximately $45–$65/hour as an internal cost or contractor rate, the development cost becomes.  
 

Now, if you spend $10,000 for the whole onboarding course and you are onboarding 100 employees with the help of the training, the cost per employee is $10. 

And you shall still consider

• Video production
• Voiceovers
• Localization
• LMS uploads
• Revision cycles

As for your internal team, if a product manager spends 10 hours helping build onboarding content, and their loaded hourly cost is $60/hour:

10×60=$600

That is already $600 allocated to course development time alone.

To reduce the training production costs for onboarding, you need to standardize onboarding templates, make reusable modules, and create internal content libraries. Without reusable assets, every new training initiative starts from scratch and costs. 

Internal labor costs

I guess you asked yourself whether it is more cost-efficient to rely on internal resources or outsource training delivery. To find the answer, let’s calculate how much your internal training operations already cost you.

These expenses are almost invisible. They are distributed across managers, HR, trainers, and onboarding sessions, and reduced productivity during ramp-up.

Trainer and SME time

The biggest variable here is who delivers the training and who the subject matter expert is. 

For example, technical onboarding often involves senior engineers or product specialists. Sales onboarding is usually handled by enablement managers or sales leaders.

Their hourly costs differ significantly.

Here is a realistic range for internal training contributors, where I made the calculations based on Glassdoor and Indeed cost reports.  
 

In short, if you are running a 3-hour sales development training for 20 employees, the costs are: 3×25×20=$1500. 

As for your internal subject matter experts, let’s take another example. If a technical SME spends 25 hours onboarding one new hire at an internal loaded rate of $90/hour, that is $2,250 in training labor cost for one employee.

The more your onboarding depends on “someone explaining things live,” the more expensive scaling becomes.

Administrative costs

Administrative onboarding work is usually underestimated because it is fragmented across multiple small tasks. According to Forbes Advisor, onboarding a new employee costs companies around $1,400 on average.

HR spends 10 hours on average of time per hire on tasks like. 

• Scheduling training
• Preparing documents
• System provisioning
• Tracking completion
• Sending reminders
• Managing compliance records
• Coordinating managers and departments

And if they have an hourly rate of $35, then you spend $350 per hire on administrative costs. 

Let’s calculate this annually. 

That is why it is more cost-effective to automate onboarding workflows inside HRIS and LMS platforms. Manual coordination becomes operationally heavy very quickly.

New hire wages and ramp up

Your employees are paid while they are learning.

For many corporate roles, onboarding and ramp-up overlap during the first 2–3 months. Especially, if we are talking about roles with specialized knowledge, like sales and technical skills. Statistics state that it takes more than 6 months for the new hires to be 100% productive.

Let’s assume that

• An employee's salary is $70,000 annually
• Full productivity is reached after 6 months
• Productivity averages 50% during the first 3 months

That means the organization pays for full compensation while receiving partial output.

For the first quarter alone, that would mean $8750 for each employee. 

What affects the costs of employee training the most?

The costs of training your new employees we discussed above, are averaged. Because even if two companies train the exact same number of employees, the costs will differ. The costs mainly depend on the following: 

The training method

Benchmarks and statistics

• Companies in the US spent an average of $774 per employee in 2024. It is $180 lower than what they spent in 2025 (based on the Training Magazine industry report). 
• Employees from the US companies got 47 hours of training per year (based on the Training Magazine industry report).
• Companies spent $165 per learning hour, which is 34% higer than in previous years. 

The way you deliver training has the biggest impact on overall cost. Some methods, like self-paced training with an LMS solution, scale easily. 

Here is how the most common training methods compare.

eLearning Industry claims that eLearning reduces training time by 40%–60% compared to traditional classroom training.

Keeping this in mind, let’s compare in-person workshops and eLearning training for employees and see which is more cost-efficient for training 100 new hires.  
 

And we shall not forget that you can apply the same eLearning training for the same roles over and over, with little updates. But you shall pay the same amount for workshops every time you have new hires for the same role. 

In short

The more frequently you hire, the more self-paced systems become cost-efficient because the content is reusable. However, instructor-led training still makes sense for:

• Leadership development
• Technical simulations
• Compliance-heavy environments
• Coaching-based onboarding

The training type 

Benchmarks and statistics

• $20–$80 per delivered training hour for compliance (based on Training Magazine surveys)
• $50–$150 per hour spent on safety training 

Here is a breakdown of other training category costs based on data from trainingcost and Statista. 

In short

As you already guessed from the table above, compliance training is usually cheaper to scale because most organizations standardize it through LMS modules.

Related: LMS Comparison Chart.  Choosing Your Platform by Corporate Workflow Fit

Technical and specific training is more expensive because it often depends on:

• Internal SMEs
• Product-specific systems
• Hands-on support
• Smaller training groups

Company size

Smaller companies usually spend more per employee than larger organizations, because

• They have fewer reusable systems
• Training is less standardized
• Fixed software costs are distributed across fewer employees

Larger organizations benefit from scale and the number of their employees. 

Benchmarks and statistics

Based on a 2018 Statista online survey of 318 organizations worldwide, here is how the cost range varies by company size. 

In short

Smaller organizations often rely more on live onboarding because building systems upfront may not yet justify the investment.

But once hiring volume increases consistently, manual onboarding usually becomes more expensive than structured learning infrastructure.

How to optimize and reduce the costs of new employee training?

By saying reduce training costs, I do not mean cutting the budget. What you could do instead is reduce repetitive work, shorten ramp-up time, and use the right category of employee training. 

Provide on-demand training

One of the fastest ways to reduce training costs is to move repeatable onboarding materials into on-demand formats.

So, create reusable learning materials that employees can access independently. On-demand training reduces live training time by 50%. So, if you used to spent $14.000 on workshops and live training, now you will likely spend $7000 on the same employee training. 

Implement just-in-time learning (JIT)

A common onboarding mistake is overloading employees with information during their first weeks.

We shall not forget that most of that information is forgotten before employees actually need it. According to eLearning Industry, 65% of companies find that Just-in-time learning makes training way better. That is because employees retain information better when training happens close to the moment of application. 

For example, if your onboarding currently includes:

• 30 hours of upfront training
• But employees actively use only 60% of that information initially

Then, 40% of the training is delivered too early.

That means:

30×0.4=12 unnecessary upfront hours

Now apply employee wages.

If the employee's loaded hourly cost is $35/hour:

12×35=$420 per employee spent on training content that they do not need. That is why you want to conduct training needs analysis and rely more on jit training. 

Implement peer-to-peer training

In many organizations, employees already learn informally from teammates during onboarding. Your job is to make it more structured and measurable.

According to Degreed’s workforce learning research, employees often rely more on coworkers for practical job learning than on formal courses.

Peer-to-peer learning becomes financially important because senior SMEs are usually the most expensive onboarding resource.

You need to measure whether it is more cost-efficient to hire a subject matter expert or your senior professionals. 

Measure your ROI

Speaking of measuring, you want to have a clear picture of:

• Which onboarding activities reduce ramp-up time
• Which sessions do employees rarely use
• Which training formats create the best retention
• Which programs cost more than the value they generate

If you measured and know the exact numbers for the time-to-productivity and completion rates, you can calculate everything else with the formulas discussed in our article. 

Reduce the training costs and save time with Uteach

When you break employee training costs down fully, the biggest expenses usually come from repetition, manual coordination, live delivery, and long ramp-up periods.

That is why more companies move toward centralized learning systems instead of managing onboarding through scattered documents, spreadsheets, meetings, and recurring workshops.

An LMS like Uteach helps you automate 70% of those processes and manual tasks. With Uteach, you can build self-paced onboarding programs, organize internal training materials, track completion rates, create assessments, and manage employee learning from one place.

Instead of repeatedly delivering the same onboarding manually, your employees can access training on demand while your team keeps visibility into progress, engagement, and knowledge gaps.

Companies using Uteach have already managed to:

• Reduce time spent on onboarding by 65%
• Cut HR and administrative workload by 40%
• Increase learner engagement by 45%

If you want to see how this fits into your current workflow, book a demo, and the team will help you map your onboarding process, identify inefficiencies, and understand what setup makes the most sense for your training operations.