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Training Provision and Basic Economics

Report Segment: Basic Economics

So let us turn to the economics of these courses. At the moment companies send their employees to training facilities out of the region (e.g. West Midlands; south coast; Humberside; Scotland). But local training providers are adamant that they could put on courses in the region if the number of delegates makes it economical. This isn’t a poor excuse for not running courses – its simple business sense. No provider should be putting on courses at a loss.

What though, if through training brokerage, a number of companies came together to purchase a solution together as opposed to acting unilaterally? Each of the 21 courses (identified by Nautilus) need to be examined in this light to determine which ones could become economical through brokered joint purchasing power.

This leaves the uneconomic courses to deal with. Some of these will require specialist equipment and that will be difficult to justify if the delegate forecasts don’t stack up. A subsidy or grant to purchase the right equipment could be part of the solution but that’s unlikely to be sufficient given the imperative to at least break even. At this point it would be worth adding up the ‘true’ cost of sending a member of staff on a course outside the region. First there is the travel cost and subsistence allowance; then there is overnight accommodation to consider; and of course the additional time away from work. Finally there is the course fee itself. All these costs need to be factored into the equation to arrive at a true per delegate figure. An example is provided below:

In this made up example, the true cost of training is twice as much as the course fee. Could a local training provider offer a similar course at less than £1,835 per delegate? If they could then that represents a real saving to businesses even though the actual course fee may be significantly more than an out of region provider.

It is interesting to note that Lowestoft College have already responded to industry demand for this particular course (CompEx). Their first course ran in May 2011 and since then Compex training has become a successful addition to their commercial provision.