“How to set your corporate training rates” is one of the most common searches to bring people to The Trainers Training Company website. I know it’s also a topic that comes up time and again within the Trainer Talk community.
With this in mind, I wanted to dive deeper into how to set your corporate training rates and – perhaps more importantly – feel confident about them.
Why you won’t find a definitive rate for corporate training
You might be looking for a definitive list of rates for your training services, a resource that tells you the precise figures you need to put in a quote to win a new client.
The problem is that this list doesn’t exist.
A variety of factors will affect what sort of rates you can expect to command for corporate training. Some are external factors that influence the marketplace, while others are to do with you as an individual.
External factors that affect corporate training rates
When setting your training rates, your location and that of your client will have an impact on what you can charge.
Training rates in cities tend to be higher than in less populated areas; for example, a corporate trainer in London will typically be able to charge more than one outside of the Capital, based on their location alone.
Why does location matter to your rates?
For a start, the cost of living is typically higher in cities so business fees tend to be higher to reflect this.
A densely populated area may include more potential clients as well as more potential competitors. In other words, the marketplace is bigger.
It may be easier to visit your clients or to connect with other suppliers locally so that you can include more services in your training packages.
If you live a long way from your potential clients, this may affect your business model, i.e. you might need to offer full training days to make travelling worthwhile as opposed to half-day sessions or shorter workshops for closer clients.
The sector or industry in which you work will have an impact on what you can charge.
If you have specialist knowledge in the Financial Services or Engineering sectors, for example, you will probably be able to charge more than someone who trains Health and Social Care public sector clients.
This isn’t set in stone. There are some very high earning public sector trainers but, as with all jobs, industry or sector can influence rates.
Type of training
Your corporate training rate will also depend on the type of training you deliver and how that matches the client’s needs.
Does your training focus on a specialised niche or do you cover soft skills that could apply to a much wider audience?
Also, how do you deliver your training? Do you run short sessions on-site for your clients or training away days, for example?
Do you train face-to-face or online?
In accessplanit’s Training Industry Benchmark Report 2018, it found that online learning and gamification is set to continue to increase after a 25% upturn over the previous year.
The general consensus of the survey is that “not only do learners want on-demand, self-paced content at the point of need. But companies and management also want the benefit of on-demand learning, meaning employees are able to undertake personal development at a point that is also beneficial for the company”.
If you have expertise in this area, when many other trainers don’t, your fees could reflect your innovative approach or technological niche.
Scope of training to be provided
How you set your corporate training rates may also be influenced by the scope of training that you’ve been asked to deliver.
This will probably depend on your pricing model, i.e. hourly rate, day rate or a fixed project fee.
You don’t always have to stick to the same model. For example, you might work on an hourly rate for one-off workshops but a fixed fee or day rate for a two-week block of training.
Whichever approach you choose, remember to factor in costs like preparation time and research, producing training materials, travel, food, overnight accommodation (if necessary), processing feedback and following up on the training with the client.
If you do go for a fixed rate, allow extra time to cover contingencies. Also, make sure that you have a caveat in your contract that the price will change if the client changes the scope of the training in any way.
Many freelancers adjust their charges if they’re asked to deliver a project within a tight timeframe. This is often referred to as a ‘rush’ fee and reflects the fact that you may have to work extra unsociable hours or juggle existing clients to accommodate a looming deadline.
Individual factors that will affect how you set corporate training rates
Of course, it’s not just external factors that will affect your corporate training rates.
There are individual factors that you will want to think about too:
Your experience and background
When you deliver training for a client, you draw on your personal and professional experience.
If, for example, you have worked extensively with a specific type of client within a specific industry, you would potentially have more value to similar clients than someone who is new to the same niche.
Equally, if you spent years running your own business before becoming a trainer for business start-ups, then you would have the appeal of lived experience, which you could reflect in your rates.
If you have invested in your education and qualifications for many years, it’s reasonable that your rates should reflect this.
When a client books you as a trainer, they’re not just paying for the hours you’re working with them but also for the knowledge, skills and experience you bring with you.
People usually expect to pay more for someone who is in demand because of their professional reputation.
If you are well-known within your industry and attract many word-of-mouth recommendations, or you have a waiting list for your training services, you should be able to charge more to reflect the demand for your skills.
Your desired income
The best starting point for setting your corporate training rates is working out how much you need to earn to cover all of your expenses as well as how much you would like to earn to give you the life you want to live.
The challenge then is to figure out how you will reach that higher figure.
A basic approach to working out an hourly rate
Many people start with a simple approach. They say, “I want to earn £50,000 a year” then they calculate how many days or hours they want to work a year and divide the two figures to arrive at a basic hourly rate.
This calculation looks something like:
40 hours/week (8 hours, 5 days/week) x 52 weeks/year = 2,080 hours
£50,000 overall earnings ÷ 2,080 hours = £24.03/hour (let’s round it up to £25/hour)
The problem with this approach is that there’s a lot it neglects to factor in.
For example, you will want to take some days/weeks as holiday each year so you won’t really be working 52 weeks of the year.
And what about covering sick days, paying into a pension, taking time for maternity leave (if applicable), travel expenses, the costs of running your office (even if it’s at home), insurance, software and service subscriptions, and all the other expenses that come with being self-employed?
My advice would be to take your corporate training rate calculations a step further.
How to calculate a more realistic hourly rate
- Work out all of your business expenses for the year.
Remember to include:
- Taxes and VAT (depending on your income)
- National Insurance
- Pension contributions
- Business rent
- Website hosting
- Software and service subscriptions
- Office equipment and supplies
- Computers (new items and repairs)
- Professional memberships
- Travel expenses
- Marketing & advertising costs
- Vehicle mileage
- Legal and accounting fees
- Bank fees
- Any other expenses
- Work out how much you need to pay yourself each year to cover your personal expenses.
Your salary needs to cover things like:
- Council Tax
- TV Licence
- TV services (e.g. Sky, Netflix, etc.)
- Children’s activities
- House insurance
- Life insurance
- Together, your business and personal expenses make up what you must earn to cover your costs. Add these figures to the overall amount you set as your earning goal for the year ahead.
For example, £50,000 + £10,000 business expenses + £20,000 personal expenses = £80,000
- You should factor in a profit margin for your business. A 10-20% profit margin is common for companies that provide client services.
Let’s add 10% to our example:
£80,000 x 1.10 = £88,000
- Work out the billable hours you’ll be able to cover (and charge for) each year. As mentioned above, you shouldn’t intend to work 52 weeks of the year because everyone deserves and needs a break.
How many days will you want to take as holiday? For example, you might want a week off over Christmas, three weeks off over the summer when the kids are at home, Bank Holidays off, a break over Easter. These days all add up.
For the purpose of this example, let’s say you want six weeks holiday per year (i.e. 30 days).
You may also need to take sick days occasionally. Let’s allow 10 days for sickness or emergencies.
That means you’ll actually be working 40 hours/week x 44 weeks/year = 1,760 hours/year.
Of course, you won’t be able to bill a client for every hour of your working week. You will need a lunch break and shorter rest breaks throughout the day, as well as time for admin and other tasks necessary to run your training business. You’ll also spend time answering the phone or emails or putting together quotes and pitches that won’t be payable by a client.
A safe bet is to say that you’ll only be able to put in 5.5 billable hours a day, which amounts to 27.5 hours per week over 44 weeks of the year. That’s 1,210 billable hours.
- At this point, you have a figure for how much you need to earn and an estimate of your billable hours. You can use these numbers to calculate a potential hourly rate:
£77,000 ÷ 1,210 = £72.72/hour (let’s round it up to £75/hour)
Or a potential day rate of £75 x 5.5 billable hours per day = £412.50 (which you could round down to an even £400 per day)
That’s a big difference from the £25/hour we originally calculated!
Using this rate to price your services
Many freelance trainers use the above approach as a guide for pricing their services.
They don’t actually share this hourly rate with their clients. Instead, they use it as a starting point by saying to themselves, “Based on my experience, I think this training contract will take 30 hours to deliver, therefore my fixed price quote will be in the region of £2,250 (30 x 75)”.
Rather than giving the client a breakdown of hours to justify the costing, the approach would instead be to show the value that will be delivered within that cost – this could be:
- A bespoke training programme for XX attendees at a senior management level
- The benefits of the training for the attendees, their teams and the business overall
- How the training will be delivered and why this approach delivers the best results
- Your knowledge, skills and experience in this area
- Follow-up advice, support and feedback/assessment
- Potential positive outcomes from the training
- Value to the business
Ideally, you should use what you want to earn and the potential hourly (or daily) rate as a starting point to price your training services.
You then need to work backwards, pinpointing what services you would need to sell per week/month/quarter to reach your income goal.
What do you need to change within your business to make it possible?
How to test your corporate training rates
Having worked out some potential sales targets and figures, how can you establish whether your clients will pay your fees?
Practice feeling comfortable with your training fees
The first step in pricing with confidence is getting comfortable with the hourly figure you’ve worked out above.
You might have winced at the idea of charging £75 per hour but, remember, that by outsourcing to you a client doesn’t have to pay an in-house trainer a salary, holiday pay, sick pay, maternity pay, your training and development costs, or a pension. You cover all of these within your hourly rate.
Also, you deserve to be compensated for your experience, training, knowledge, skills and qualifications, as well as allowing for the external pricing factors we looked at above.
A handy exercise is to repeatedly talk about your rates, even if it’s just to the dog or in front of the mirror. We get good at what we practice and that includes talking about money.
If you feel confident about your worth, your clients will feel it too.
Be wary of everyone saying ‘Yes’!
One indication of whether your prices are pitched correctly is the percentage of quotes that turn into bookings.
If everyone is saying ‘Yes’, it could be a sign that your rates are too low.
On the flip side, if everyone takes a sharp intake of breath and you never hear back from potential clients after your quotes go out then you might be asking too much.
A mix of more ‘Yes’ than ‘No’ from potential clients is probably the best sign that you’re pitching your prices correctly. Remember, it’s OK if not everyone can afford your rates.
Look for external validation (within reason)
Although you shouldn’t get too caught up with what other trainers are charging, it is important to know whether the market can bear your proposed rates.
To do this, try the following:
- Contact industry trade organisations and ask for their insights into training rates
- Ask people in your network, including contacts in your industry
- Ask your existing clients for their insights
- Reach out to other trainers, either with a direct approach or via a ‘mystery shopping’ campaign
- Research average salary information for in-house trainers in your area
- Do some online research – for example, here’s an article about the cost of professional training in the UK or figures from IT Job Watch that show IT trainers were paid an average of £403 a day between March and November 2019. You’ll find other figures for training ranging from £300 to £1,500+ per day, depending on where you look
Armed with insights into your strengths as a trainer, your financial goals, and an understanding of the wider marketplace, it’s time to quote with confidence.
One of the real game-changers is understanding that, if someone says they can’t afford your services, it’s not a reflection on you and your value. It doesn’t mean you’re aiming too high. It just means that the potential client doesn’t have the budget right now.
As challenging as it can be sometimes, value yourself. It’s amazing what will come from that.
Let me know how you get on
I’d love to hear how you feel about setting your corporate training rates and whether any of the above helps/resonates. Why not drop me a comment below or over on Facebook?