How to Conduct a Cost-Benefit Analysis

Four Steps to Calculating Costs

To determine the costs of a training project, a trainer needs to calculate:

• all personnel costs

• all materials costs

• all delivery costs

• total expenditures

Each of these steps has substeps. Although numerous, they are relatively simple.

Step 1: Personnel Costs

Personnel costs are figured by determining wages and salaries for the personnel involved. Wages and salaries can be calculated in two ways:

Direct labor costs

Simply salary or wages divided by the number of days or hours worked. The U.S. average for number of days worked is 230.

Full labor costs

Salary or wages plus fringe benefits (vacation and sick leave, holidays, health and life insurance, and pensions) plus overhead (facilities costs, support staff salaries, ...