I occasionally have clients ask me if there are any industry standards regarding elearning development, particularly around cost.
"Sean," they say, "How much should we be paying for an hour of elearning?"
"It depends," I say.
And honestly, they are never terribly happy with that answer. So I'm trying to come up with something a little more detailed. Obviously, there are any number of factors that come into play, but I was wondering if there were any quick and dirty estimates that you all use.
This was created in excel 2010. I just saved it in .xls format to work with prior versions and attached it here. Hopefully this resolves the issue for you.
I also wanted to point out that there hasn't been much mention of agency vs. individual which may be why the prices seem to be so high for some of the calculators. An agency is likely going to have a separate ID, dev, graphic designer, project manager, etc, plus have more overhead in general.
Very few individuals are an expert at all of those items, so you're paying for the expertise in each little piece of your elearning development when hiring an agency.
Some people don't need a full agency though, and that's where we come in as freelancers.
I think Owen's example is fantastic - there's a lot that goes into pricing.
I've also seen a couple people post the Slideshare on How Long Does it Take to Create Learning. Here it is broken down: http://www.chapmanalliance.com/howlong/ - I have used this formula once so far, and it has worked out (it actually seems to be giving me more time than it actually took, but it was a much more casual project than usual as well).
I think Rachel makes a great point about "agency" vs. "freelancers", and there is a WONDERFUL opportunity for a disruptive sell here.
When a prospective client contacts me, I always try and find out who else they are talking to. Surprisingly they almost always tell me, because it is a question they are not expecting :)
At that point, introducing a little FUD (fear, uncertainty and doubt) is the angle, "I bet they are quoting you a fortune to support their offices and all their people!", (or similar...). Even if they have not, (yet...), you have introduced an idea which will be pervasive for the quote they have received, or for a quote they get in the future. You cannot be disrespectful of the competition here - just honest.
That is where having a trusted network of freelance colleagues, who can cover off all the bases, (design, voiceover, artwork, development and so on) can be used as a lever to save them money. if they have more than 1 piece of work, (i.e. repeat business...), it is possible that they can therefore get this done as well for the same budget.
Think about it....when we go to the supermarket or grocery store we do it every day, it's called "Buy one get one free" (BOGOF). How many freelancers use BOGOF, or the same psychological concepts in their day-to-day selling activities? Why not?
So once again folks - we are back to business principles, not elearning/learning principles. I used this "cost for production" technique last week with a prospect, combined with a the addition of a disruptive piece of technology to aid their learning strategy (which they had never considered...), NDAs have been signed, rates have been introduced, and we meet this week to discuss the project, which was being potentially given to one of the larger, (more expensive...) eLearning companies. Tada!
Think about "cost" as part of a business strategy, and learn to use it as a tool and a weapon, combined with value, rather than just the thing that you quote, hoping to get some business. Once you make some efforts to understand how business actually works, away from the "learning" words, it actually becomes a lot more fun, and "the quote" becomes a lot less scary, because you know you are increasing the probability of wining the business anyway.
@Bruce Graham... 100% agree that you have to love what you do; which means more than just the "learning" side of doing business. You have to love doing business. Sometimes, like certain foods, this is an acquired taste that you gain only by facing your fears and taking some chances.
This is a really great posting. I need to tweak it and would love some help. I am the content expert who will write the content, any dialogue for video & audio and will design any interactive activities. I looked at the costing and pulled out Graphic, Video & Audio production. Is it reasonable to leave the other categories? THANKS
I have read over the conversations regarding what to charge for developing a 1 hour session and wanted to know if there is a current rate per hour for a standard session?
I'm from Australia developing under a contract and need to quote.
How many institutions / corporates actually pay the price of $ 19,000 for developing 1 hour of interactive animated content is the Million Dollar Question...
Sometimes the wisdom of the crowd is close to insanity... coz they constantly recyle without actually thinking.
I think, (after 6 years....!), the answer here is still "...it depends".
If you sell on "price", you get one answer.
If you sell on your personal "value" to their business you get another, (and you automatically jump up the value chain to "trusted advisor" in my experience, thereby leaving the competition behind in many cases....).
If a charity wants to pay me $75ph, or a flat fee of $3000 for a course, that may be fair enough.
That said, if a bank or insurance institution want to charge me the same, and yet they will make $400000 extra profits / fewer losses when they distribute to their partner community, I'm going to negotiate on my VALUE to that financial model, and have done on many occasions. It's all a question of whether you have the experience and confidence to negotiate on this basis I guess.
While there's no single quick solution to calculate the potential cost of elearning development, there are ways to estimate the price based on the type of content. Whenever a client inquires about the price, we ask them to fill out the elearning cost form which allows us to estimate the price.
Well, in addition to the other posts I have already made on this thread, here's a real figure, not an estimate.
I'm just finishing off a "linear" course, half an hour, after about 7 hours of work, (including recording the voiceover), so that equates to less than 20 hours for an hour of linear, not 300.
Interesting that this thread is still chugging after 6 years. =)
I honestly can't think of the last time I built a full 1 hour elearning - at this stage I'm aiming far far lower - 10 minutes still feels a little long to me.
And one of the things with building in smaller chunks is you lose *some* of the efficiencies vs. larger pieces. But you do get to make things much more dynamic, valuable and learner centric.
Bruce, I am not sure how you develop your eLearning course. But, I consider that an hour of course has around 55 content slides, 5-7 knowledge checks and a post assessment of 10 questions. Start with Storyboarding of course (onscreen content and transcript) with SME includes 2 rounds of updates. Also, in my courses I graphically enhanced each and every slide. So, you can understand how much graphical effort include. Apart from this, audio editing and synchronization with the objects on screen. Internal reviews and 2 rounds of quality check. I hope now you can understand how it comes to 300 hrs.
Just want to confirm, do you perform all the above tasks for your course? Can you share your development process?
Most of my courses are under an NDA and I really cannot share. This Ninja course https://community.articulate.com/e-learning-examples/guru-gold-winner-enter-the-ninja took 4 days to develop plus voice over time. I wrote the script, storyboarded it and did the 70% of the illustrations. I paid an illustrator for 1 days work for the other 30%. There were two review cycles where I sent it out to trusted colleagues for comments.
I must say that it's a wonderful game. Beautiful illustrations...
This is a game, which has less text. My courses are text heavy which require a lot of instructional design work. Also, the content is technical which made me to review it deeply. I have some team members who spend their time in reviewing the content. Some designers for graphic enhancement of around 60 slide including assessments. Anyways, it is nice to have discussion.
Just want to confirm how much effort in hours you spent on development. Yours and all those who design and reviewed..
3-4 days of my time, 1 day of illustrator, 6 hours v/o. Review time of my colleagues would not be chargeable as that would be the same as SME review.
The majority of my courses are text heavy, I typically charge 1 hour for every minute of a course, unless they are short courses of 5 minutes or less as that averages out about 8 hours work. For highly complex courses I would see the time going up to around 100 hours for a 60 minute course. Perhaps your courses are more complex or I am faster.
106 Replies
This was created in excel 2010. I just saved it in .xls format to work with prior versions and attached it here. Hopefully this resolves the issue for you.
I just wanted to add in another resource that I've used (or really, a collection of resources): https://christytucker.wordpress.com/2013/09/09/instructional-design-hourly-rates-and-salary/
I also wanted to point out that there hasn't been much mention of agency vs. individual which may be why the prices seem to be so high for some of the calculators. An agency is likely going to have a separate ID, dev, graphic designer, project manager, etc, plus have more overhead in general.
Very few individuals are an expert at all of those items, so you're paying for the expertise in each little piece of your elearning development when hiring an agency.
Some people don't need a full agency though, and that's where we come in as freelancers.
I think Owen's example is fantastic - there's a lot that goes into pricing.
I've also seen a couple people post the Slideshare on How Long Does it Take to Create Learning. Here it is broken down: http://www.chapmanalliance.com/howlong/ - I have used this formula once so far, and it has worked out (it actually seems to be giving me more time than it actually took, but it was a much more casual project than usual as well).
I think Rachel makes a great point about "agency" vs. "freelancers", and there is a WONDERFUL opportunity for a disruptive sell here.
When a prospective client contacts me, I always try and find out who else they are talking to. Surprisingly they almost always tell me, because it is a question they are not expecting :)
At that point, introducing a little FUD (fear, uncertainty and doubt) is the angle, "I bet they are quoting you a fortune to support their offices and all their people!", (or similar...). Even if they have not, (yet...), you have introduced an idea which will be pervasive for the quote they have received, or for a quote they get in the future. You cannot be disrespectful of the competition here - just honest.
That is where having a trusted network of freelance colleagues, who can cover off all the bases, (design, voiceover, artwork, development and so on) can be used as a lever to save them money. if they have more than 1 piece of work, (i.e. repeat business...), it is possible that they can therefore get this done as well for the same budget.
Think about it....when we go to the supermarket or grocery store we do it every day, it's called "Buy one get one free" (BOGOF). How many freelancers use BOGOF, or the same psychological concepts in their day-to-day selling activities? Why not?
So once again folks - we are back to business principles, not elearning/learning principles. I used this "cost for production" technique last week with a prospect, combined with a the addition of a disruptive piece of technology to aid their learning strategy (which they had never considered...), NDAs have been signed, rates have been introduced, and we meet this week to discuss the project, which was being potentially given to one of the larger, (more expensive...) eLearning companies. Tada!
Think about "cost" as part of a business strategy, and learn to use it as a tool and a weapon, combined with value, rather than just the thing that you quote, hoping to get some business. Once you make some efforts to understand how business actually works, away from the "learning" words, it actually becomes a lot more fun, and "the quote" becomes a lot less scary, because you know you are increasing the probability of wining the business anyway.
Thanks for the shout-out Rachel.
@Bruce Graham... 100% agree that you have to love what you do; which means more than just the "learning" side of doing business. You have to love doing business. Sometimes, like certain foods, this is an acquired taste that you gain only by facing your fears and taking some chances.
Just as a direct aside to the original question. I have just completed (?) a 30-minute course.
On the basis that it has taken 131 hours, that equates to around $18000 for an hour of eLearning in this particular example.
This is a really great posting. I need to tweak it and would love some help. I am the content expert who will write the content, any dialogue for video & audio and will design any interactive activities. I looked at the costing and pulled out Graphic, Video & Audio production. Is it reasonable to leave the other categories? THANKS
Hi all,
I have read over the conversations regarding what to charge for developing a 1 hour session and wanted to know if there is a current rate per hour for a standard session?
I'm from Australia developing under a contract and need to quote.
Thanks.
Anyone have any updated current information on cost of developing one hour of elearning?
Thanks! Kim
Hi Michelle,
Did you get a response from your question? Is there a current rate per hour for a standard session?
Thanks
No standard rate. I've been paid from $40 per hour to over $600.
Too many factors, and situations to have a standard cost.
How many institutions / corporates actually pay the price of $ 19,000 for developing 1 hour of interactive animated content is the Million Dollar Question...
Sometimes the wisdom of the crowd is close to insanity... coz they constantly recyle without actually thinking.
I think, (after 6 years....!), the answer here is still "...it depends".
If you sell on "price", you get one answer.
If you sell on your personal "value" to their business you get another, (and you automatically jump up the value chain to "trusted advisor" in my experience, thereby leaving the competition behind in many cases....).
If a charity wants to pay me $75ph, or a flat fee of $3000 for a course, that may be fair enough.
That said, if a bank or insurance institution want to charge me the same, and yet they will make $400000 extra profits / fewer losses when they distribute to their partner community, I'm going to negotiate on my VALUE to that financial model, and have done on many occasions. It's all a question of whether you have the experience and confidence to negotiate on this basis I guess.
Just my (ongoing) 2p worth.
While there's no single quick solution to calculate the potential cost of elearning development, there are ways to estimate the price based on the type of content. Whenever a client inquires about the price, we ask them to fill out the elearning cost form which allows us to estimate the price.
Development hours for 1 hour eLearning:
Linear or Low interactivity - 300
Medium interactivity - 450-550
High interactivity - 700-800
Multiply by your per hour rate.
300 hours for 1 hour of "linear" - wow!
I must work too quickly then.
I would not have had a business for 10 years if I'd charged these numbers.......Either I charge FAR too much, or I work FAR too slowly!
Can you share your estimates with all of us?
Well, in addition to the other posts I have already made on this thread, here's a real figure, not an estimate.
I'm just finishing off a "linear" course, half an hour, after about 7 hours of work, (including recording the voiceover), so that equates to less than 20 hours for an hour of linear, not 300.
Wow that seems high - I have found those numbers from the Chapman report to be pretty close to accurate for me and most people I have worked with.
Interesting that this thread is still chugging after 6 years. =)
I honestly can't think of the last time I built a full 1 hour elearning - at this stage I'm aiming far far lower - 10 minutes still feels a little long to me.
And one of the things with building in smaller chunks is you lose *some* of the efficiencies vs. larger pieces. But you do get to make things much more dynamic, valuable and learner centric.
Bruce, I am not sure how you develop your eLearning course. But, I consider that an hour of course has around 55 content slides, 5-7 knowledge checks and a post assessment of 10 questions. Start with Storyboarding of course (onscreen content and transcript) with SME includes 2 rounds of updates. Also, in my courses I graphically enhanced each and every slide. So, you can understand how much graphical effort include. Apart from this, audio editing and synchronization with the objects on screen. Internal reviews and 2 rounds of quality check. I hope now you can understand how it comes to 300 hrs.
Just want to confirm, do you perform all the above tasks for your course? Can you share your development process?
Nitesh - 300 hours is very high including 3 rounds of review I would be looking at 60+ hrs. For High interactivity 80-90hrs.
Phil, you put me in lot of pressure now :)
could you please share any link of your course? I really want to see where I am going different.
Most of my courses are under an NDA and I really cannot share. This Ninja course https://community.articulate.com/e-learning-examples/guru-gold-winner-enter-the-ninja took 4 days to develop plus voice over time. I wrote the script, storyboarded it and did the 70% of the illustrations. I paid an illustrator for 1 days work for the other 30%. There were two review cycles where I sent it out to trusted colleagues for comments.
I must say that it's a wonderful game. Beautiful illustrations...
This is a game, which has less text. My courses are text heavy which require a lot of instructional design work. Also, the content is technical which made me to review it deeply. I have some team members who spend their time in reviewing the content. Some designers for graphic enhancement of around 60 slide including assessments. Anyways, it is nice to have discussion.
Just want to confirm how much effort in hours you spent on development. Yours and all those who design and reviewed..
3-4 days of my time, 1 day of illustrator, 6 hours v/o. Review time of my colleagues would not be chargeable as that would be the same as SME review.
The majority of my courses are text heavy, I typically charge 1 hour for every minute of a course, unless they are short courses of 5 minutes or less as that averages out about 8 hours work. For highly complex courses I would see the time going up to around 100 hours for a 60 minute course. Perhaps your courses are more complex or I am faster.