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. Thanks! sean

Here is what I use. I took the figures that Chapman put together but tried to make some meaning out of them for myself.in a handy spreadsheet.Chapman provides some averages for three general course categories split into 3 levels of development effort across 12 development activities. While the breakdown is only provided for the average effort in each of the categories, I used the percentages derived from this to fill in the low and high effort buckets. Then, I use these numbers as a guide. For example, below you can see a course where I think my analysis will be: close to the basic course/average effort heavy on design light on storyboarding with graphics provided no video no audio Average authoring (thanks StoryLine!) Light QA Testing 0 Project management (I work alone) With a few reviews an average pilot and time for email back and forth with the client My estimated time spent for one hour of training falls between Chapman's Low and Average effort for the basic course I am developing. (Even though I chose to put in a higher degree of time and effort into design).Knowing the time you will spend is only part of the equation. You also have to know what you will charge. I've observed some make the rookie mistake of jumping out of the gate by charging what they used to make when they worked for a corporation. They forget that now they have all of the costs and overhead of their new business that they have to account for. So for example, assume a person had an annual salary of $65,000 as an ID, the hourly equivalent would be $31.25. If they charged this, lost a few weeks for vacation (unpaid now), had business expenses of $10,000, and spent 25% of their time looking for clients, their effective hourly rate drops to about $21. If they had accounted for these other assumptions up front, they would have billed at a rate of $50 to reach their same prior salary, cover their business overhead, time spent engaging new clients, and their vacation. If I am just starting, and struggling to stay engaged (managing a 50/50 split between working and looking) my hourly rate would jump all the way to $75. Once I have a reasonable rate based on my desired income (what I think my work is worth - without being too greedy) adjusted for expenses and a reasonable work -v- work search split, the rest is simple math. Attached is my spreadsheet you can use along with 3 screenrs that walk through it. My spreadsheet uses a modifier that is just a restatement of the cost per hour of training to a cost for each 5 minutes. This makes it easier for me to estimate courses that don't fit neatly into even hour buckets. Part 1: https://player.vimeo.com/video/204931345 Part2: https://player.vimeo.com/video/204931355 Part3: https://player.vimeo.com/video/204931363

Hi Sean, have you seen this resource already? Despite the title, it does contain info about both time and cost.

Owen Holt said: ..... If they had accounted for these other assumptions up front, they would have billed at a rate of $50 to reach their same prior salary, cover their business overhead, time spent engaging new clients, and their vacation. If I am just starting, and struggling to stay engaged (managing a 50/50 split between working and looking) my hourly rate would jump all the way to $75. I should point out that clearly other factors need to be taken into consideration and one should set realistic expectations. For example, just because I might need to charge a much higher rate to hit my annual income goals doesn't mean that it will be the right rate to win business or be a rate that is commensurate with my current skill level & experience. I use the excel sheet for guidance only, but there is not a form or calculation that I am aware of that replaces common sense and human intellect.

Hi there Eric, and welcome! Since the site allows downloads, I downloaded the presentation and attached it to this post. Hope that helps.

Thank You Jeanette, this is a great presentation! I really appreciate your extra effort to help me out. Thanks again, Eric

Cost of developing 1 hour of elearning

HelenaFroyton
Community Member
12 years ago

Thank you Adam for this resource. I will take a look at it.

-Helena
Kai-04e9073e-5e
Community Member
11 years ago
Great stuff people, great stuff! Thanks!
AdamMastalerz
Community Member
11 years ago

Hi,

Just wanted to post the calculator tool, because I think I linked to a blog post so perhaps it was hard to find.

In any case if anyone is looking for an e-Learning calculator to determine costs.

Please take a look here:

http://www.scholarixsolution.com/pricing/
AshleyChiasson
Community Member
11 years ago

Adam Mastalerz said:

Hi,

Just wanted to post the calculator tool, because I think I linked to a blog post so perhaps it was hard to find.

In any case if anyone is looking for an e-Learning calculator to determine costs.

Please take a look here:

http://www.scholarixsolution.com/pricing/

Just used this tool to cost out a potential project, and I'm not sure how accurate it is, only because I couldn't imagine charging 12,000+ for 1 hour of eLearning based on the parameters I specified (all pretty low-level). Either that, or I'm pricing my services well below industry standard :P I tend to lean toward the Chapman Alliance estimates as they align more accurately with my service offerings.
JohnMoore2
Community Member
11 years ago

ELearning, Training Development, LMS and Course Development Cost 2014...

Okay, Everyone listen up...

I've been doing eLearning and multimedia work since 1999. You should charge $45 to $95 per hour to develop eLearning. Got that! You don't need a calculator. If you charge less than $45 your are not a professional developer. To develop SCORM/TinCup quizzes, modules, WBT, CBT, online learning, job aids, etc... You should be charging at LEAST $45/hr. Period.

The range is $45 to $95 per hour to do eLearning, Multimedia, Course Development, Training Development, LMS development, LMS Administration, HTML5/Flash/iPad/Android training content development and technical writing work.

Everyone got that?

Stop undercharging for your work?!??! If you pay LESS than $45 to $95 per hour you are getting substandard work -- PERIOD.

PAY FOR GOOD WORK. Not hard. Smh.

If you need a PROFESSIONAL eLearning developer or LMS Administrator contact me, stop dealing with amateurs.

John. G. Moore, Jr.
CaryGlenn1
Super Hero
11 years ago
I was a professional blacksmith for several years. Blacksmiths have a saying, "There are two ways to go to hell, one is hitting cold steel, the other is not charging enough."
SeanSpeake
Community Member
11 years ago

In the 3 years since I posted the original question, I still haven't read a satisfactory answer.

You see, the answer is still - "it depends".

If a client wants me to take completed storyboards and convert it to Storyline, I like to say I'm not interested. (I don't always have that luxury, but in a perfect world...) Like I said in an earlier post, I prefer the partnered approach to the order taker approach.

If they want a simple conversion, they can do it off shore more cheaply than I can do it.

What I like to bring to the table is instructional design and adult learning principles. The flashiest course in the world doesn't matter if the content won't support it.

But that being said, I've found you need to price according to your client. A small non-profit is not going to have the same appetite as a large multi-national.

I guess what I'm trying to say is what I've found in the last three years is pricing is as much an art as a science.

I've looked through the calculator and to be honest, I still don't find it especially helpful.

Liberal use of custom interactions - "liberal" is not a term I can use for pricing. Does liberal use mean 25% of pages contain a custom interaction? 50%?

Define custom interaction. Something not natively built into Storyline? Custom flash?

And I'm not on board with how they define Multi-media complexity.

There's also the whole geography issue. What a head office in Toronto will pay for 1 hour of elearning may not be the same as what a small firm in Red Deer will pay. It could vary wildly in the US or in Europe.

Arbitrary figures or calculators just don't cut it. Pricing is something each person needs to figure out for themselves. And for me, ID is what costs.
jeff
Community Member
11 years ago

Hi Sean, i believe you are right. All you can do is set your hourly rate and be prepared to adjust it depending on circumstances. It's about your experience. The more you develop the better your insight will be what it will cost You to develop one hour of elearning.

Jeff
AshleyChiasson
Community Member
11 years ago

Owen Holt said:

Here is what I use. I took the figures that Chapman put together but tried to make some meaning out of them for myself.in a handy spreadsheet.
Chapman provides some averages for three general course categories split into 3 levels of development effort across 12 development activities. While the breakdown is only provided for the average effort in each of the categories, I used the percentages derived from this to fill in the low and high effort buckets. Then, I use these numbers as a guide. For example, below you can see a course where I think my analysis will be:

close to the basic course/average effort

heavy on design

light on storyboarding

with graphics provided

no video

no audio

Average authoring (thanks StoryLine!)

Light QA Testing

0 Project management (I work alone)

With a few reviews

an average pilot

and time for email back and forth with the client

My estimated time spent for one hour of training falls between Chapman's Low and Average effort for the basic course I am developing. (Even though I chose to put in a higher degree of time and effort into design).
Knowing the time you will spend is only part of the equation. You also have to know what you will charge. I've observed some make the rookie mistake of jumping out of the gate by charging what they used to make when they worked for a corporation. They forget that now they have all of the costs and overhead of their new business that they have to account for. So for example, assume a person had an annual salary of $65,000 as an ID, the hourly equivalent would be $31.25.

If they charged this, lost a few weeks for vacation (unpaid now), had business expenses of $10,000, and spent 25% of their time looking for clients, their effective hourly rate drops to about $21. If they had accounted for these other assumptions up front, they would have billed at a rate of $50 to reach their same prior salary, cover their business overhead, time spent engaging new clients, and their vacation. If I am just starting, and struggling to stay engaged (managing a 50/50 split between working and looking) my hourly rate would jump all the way to $75. Once I have a reasonable rate based on my desired income (what I think my work is worth - without being too greedy) adjusted for expenses and a reasonable work -v- work search split, the rest is simple math.

Attached is my spreadsheet you can use along with 3 screenrs that walk through it. My spreadsheet uses a modifier that is just a restatement of the cost per hour of training to a cost for each 5 minutes. This makes it easier for me to estimate courses that don't fit neatly into even hour buckets.

Part 1: https://player.vimeo.com/video/204931345

Part2: https://player.vimeo.com/video/204931355

Part3: https://player.vimeo.com/video/204931363

Great breakdown and explanation! Thanks for taking the time to walk us through it
JoshuaRoberts
Community Member
11 years ago

Interesting piece for sure Adam.

Thanks.