The aim of the exercise is to determine whether the cost of the training plan exceeds, falls below or meets your allocated budget. Most budgets also show the expected spend by month so that you will be able to monitor the budget during the year. If you are selling training to other departments you will also need to show the expected income for each month.
Be sure to find out what your company's financial year is. Some start in April, some start in November, while others are the same as the calendar year. Confusion can arise over financial years, especially if your suppliers or customers have a different financial year to your own, so be very careful about what should be in this year's budget and what should be in the following year.
Determining the cost of budget items
The cost of some of the budget items is fairly easy to determine. Others, like the cost of a trainer or the cost of a day of training, can become quite involved.
How much does a trainer cost?
The cost of employing anybody is not just the cost of their wages. There are other employment costs and overheads that have to be taken into account. Table 1 gives a fictitious example of the real cost of employing a trainer whose current salary is £33000. I have assumed that the job involves a great deal of travel so that a car will have to be provided.
|Accommodation and facilities||£4050|
|Computer and information systems||£1000|
Table 1 Example annual employment cost of a trainer
After taking away holidays a trainer is available for work for about 220 days a year. This means that this trainer costs about £230 a day to employ. If the trainer is working at a face-to-face ratio of 50 per cent, the trainer will cost about £460 per training day.< Previous Next >