Are the time, money, and resources you pour into driver training worth it? Or are you working up a sweat to get mediocre results? When implemented correctly, a driver training program will pay for itself and then some. Everyone should be achieving these results, so we’re going to show you how to calculate your return on investment (ROI) for your driver training program.
ROI stands for return on investment. It’s a fancy way of saying what do you get back for the resources you put into something.
If you spend $3,000 remodeling your home’s kitchen and increase your home’s value by $10,000, you just had a positive return on investment. Similarly, if you spend $40,000 on driver training per year and save yourself $1mil in cost of loss, you’ve achieved a massive return on investment.
We’re not just making up that number, either. That is a reasonable ROI to expect from your driver training program if you’re a large company. Smaller companies should expect an ROI of at least $30,000 per year. The key to calculating your exact ROI is to find two figures:
The difference between those two figures is your driver training return on investment.
To determine your driver training ROI, you first need to determine your cost of loss. In other words, what does an accident cost your company?
There are dozens of factors to consider. An accident involves lost time, fees, repairs to vehicles, and much more.
Here are some of the costs associated with an accident:
As you can see, the list of costs related to an accident is long. It can cost a company more than $17,000 just for a minor collision. However, as OSHA reports, accidents that result in an injury cost many companies upwards of $75,000.
Those figures are a good starting point, but depending on your market/vertical, a collision could cost you even more. You need to figure out what your average accident costs you specifically.
So, first thing’s first, set up your process for tracking this information. Go back in your records and do your best to compile the costs of several accidents of a variety of types and severity. Track it for any future accidents.
Find your average cost of loss for your most common accidents and then compare that to the cost of driver training.
The cost of driver training varies depending on several factors. Some companies choose to create their own. Others choose to invest in some sort of off-the-shelf driver training program. Each option has its own associated costs that you must assess against your cost of loss.
If you want to implement your own training program, you will need to pay for someone’s time to:
As you can see, the costs of implementing your own training can add up. Smaller companies may choose to hire a single person to handle these responsibilities. While that might be cheaper than even one accident, how many accidents will you prevent? Will this person succeed in their role?
There are no guaranteed outcomes with creating your own driver training. However, if you’re confident in your team’s ability to deliver high-quality content, it’s possible to achieve a positive ROI.
If your average cost of a collision is $20,000, for example, and you pay someone $75,000 annually to create and implement driver training, you would need to prevent 4 accidents per year to achieve a positive return on investment.
Some companies have achieved these results on their own, but it takes hard work, dedication, and persistence.
Many companies choose to invest in professionally-made driver training. They do so for three major reasons:
So, what does professionally-made training cost?
The most obvious cost is the program’s price tag. Many driver training programs are subscription-based. Others are a one-time fee. The price varies depending on the provider.
Additionally, while investing in professionally-made driver training saves you time compared to making your own, there are still some amount of hours involved in research and implementation. It may take about ten hours of your time or an employee’s time to implement professionally-made driver training.
So, how much does outsourcing driver training cost?
For example, a product like The Fleet Safety Course costs a company with 40 drivers $250/month total (or $3,000 per year). Then, you need to spend a small amount of time implementing it. The $3,000/year plus your time gets you:
With that number, you’re able to calculate your ROI.
Going back to our cost of accidents, let’s say your company’s average collision costs you $20,000. Then, let’s say your company has an average of 7 collisions per year. Therefore, your cost of loss for the year is $140,000.
A product like The Fleet Safety Course reduces your accidents by 20% or more. You can expect to have an average of 5.5 collisions per year rather than 7. At $20,000 per accident, your savings is $30,000 per year.
Compare that to the $3,000 investment plus your time, and you just achieved a massive ROI for your company.
Driver training should be saving you money. Period. If your current program is more trouble than it’s worth financially, it’s time to find a new solution.
There are many factors to consider when choosing the right option for your company. We’ve talked about it before in past articles. See some below:
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