Counting the Costs of Maritime TrainingApril 17, 2018 10:13 am
The costs of training are naturally a major consideration for any business, but especially for shipping. However, there is a danger that in looking at money alone, other aspects are overlooked and ignored. We look at the value, results and the importance of cost benefit analysis when it comes to maritime training.
When conducting maritime training, it is obviously important to know how much it is going to cost. Budgets have to be drawn up and complied with after all. However, when carrying out an evaluation it’s important to consider all training costs, including indirect, for example, participants’ time.
This will ensure you have an accurate and credible view of the potential benefits of the programme in comparison to its cost. Even if you aren’t conducting an evaluation, accurate cost information can give you an idea of how much you spend in comparison to other similar companies in the shipping industry, and to stimulate discussion on how much you should be spending on training.
When calculating the cost of training, it’s obviously important that you use accurate, reliable, and realistic figures so that any resulting costs are seen as credible. This also means that budgets have a chance of balancing and aren’t based on best guesses alone. One of the biggest mistakes when it comes to considering maritime training costs is to forget to factor in the time and demands on internal resources. By budgeting for only external costs, or for actual cash, then there can be holes in the forecasts.
The question, “do you spend too much on your training” is far from simple, but let’s look how we can get a better idea of what to spend, how to save, and how to maximise the benefits.
COUNTING THE COSTS
So how are the main component costs of training broken down, and where can savings be made, and most value for money found? Let’s explore the key cost areas in more depth:
- Planning costs: This covers any work selecting the training programme, such as a training needs assessment or stakeholder analysis. This will include any staff time spent on conducting an assessment or external consultant fees. It obviously helps to be guided as to your needs and accessing the right expertise and experience can massively reduce these planning costs.
- Programme development and design costs: For companies designing their own training, then the costs of time spent researching or designing the programme can quickly wrack up.
- Delivery costs: Any external instructor or facilitator costs would be included here. Even where an employee runs the training, it is important to calculate their time too, including travel and subsistence – and the opportunity cost of them delivering the course as opposed to other work. Often the costs need to include the cost of training facilities and refreshments or supplies. The time employees spend out of work completing the training and any pre- or post-coursework should also be included.
- Evaluation costs: This would cover the fees of any external evaluators or the time internal staff spent evaluating the training. Include the cost of any evaluation materials, analysis or data collection tools, and the distribution of any reports. If staff require any training to be able to complete an evaluation, then ensure to include costs such as time and course fees.
COST BENEFIT ANALYSIS
The key to understanding training budgets is not solely based on the costs – the true equation also need to be assessed against the benefits. Only by calculating the costs against the benefit can you gain a real sense of how best to plan, development, deliver and evaluate the training.
Often it is easier ashore, or in non-maritime businesses to look at the business impact measures to calculate the monetary benefit of the programme. Some, such as increased turnover, may be readily available in a monetary format, but for shipping and seafarers that can be far harder.
Obviously, a ship which does not have correctly certified officers and crew will run the risk of detention, and there is an obvious impact on the ability to trade. So, the costs benefit analysis when it comes to ships can be pretty stark. That is even before the positive impact on areas such as safety and security.
The old adage that if you think safety is expensive, try paying for an accident applies to training too. If you think training your crew is expensive, try dealing with the effects of an untrained or incompetent crew.
DECIPHERING THE DATA
The costs of learning may be difficult to decipher without an all-inclusive cost analysis system. There is sometimes criticism that trainers tend to defend their approach through a comprehensive justification of course content, methodology, and cost effectiveness.
However important these aspects are for the training department, they don’t tell the whole story. Indeed, while they may be compelling for the trainer and those designing and delivering the content or courses, they do not paint an adequate picture for the budget.
Once all of the relevant factors have been isolated and supported by data, it is much easier to decide what, when and how training will be conducted. Similarly, with the right data the decision buying in courses, rather than the potential headaches of preparing in-house can be determined.
Some of the questions that must answered to determine training costs include four simple steps:
- Calculate the cost of training.
- Determine the potential savings or value of the benefits generated.
- Calculate the monetary value of the potential savings or benefits.
- Compare the costs against the savings or benefits.
FROM COST TO QUALITY
The benefits and/or direct savings of maritime training are at one level blindingly obvious, but some are a little less tangible and nuanced. We can all hopefully recognise that competent crews have the right certificates, and this allows the vessel to sail.
We can also accept that trained crews are less likely to have accidents, to damage cargo or equipment. What is a little less obvious is the fact that training has positive knock on effects for recruitment and retention, and for the general happiness of those onboard.
These positives of good quality training can skew any cost benefit analysis, but that is how it should be. The facts of improving people, systems, processes and the management onboard and ashore should speak for themselves.
Training matters and the results do speak for themselves. So, in asking that question of whether you are spending too much on training, the answer should be more about investing and of ensuring the spend is targeted at the right benefits, savings and improvements. In that way, the cost will always be less than the benefits accrued.
We look forward to explaining more about the benefits of training, and the ways in which costs can be managed. We have been leading the development and positive change in maritime training since 1973, so find out more at www.videotel.com