LMS pricing guide: cost of hiring and training a new employee

LMS pricing guide: cost of hiring and training a new employee
Learning management systems obtain their profits for the value of improving workforce quality. Let’s explore it further before making any conclusions regarding the LMS pricing.

You can find various LMS plans present in the market. Some of them provide a monthly subscription, others charge depending on the number of active users, and some for the actions you perform via the software. There are also free options with limited support and a lot of paid extensions. All of them have their benefits and flaws, which we’ll explore further.

Various LMS software pricing depends on their features, installation and support quality, and pricing approach. There are large, feature-rich services that have accordingly high prices and can be appropriate for large corporations. Others provide a smaller set of features but are more affordable and easier to install and manage, which makes them more beneficial for smaller enterprises and those who don’t want to bother themselves.

Various pricing approaches can also determine the total LMS cost: some of them require purchasing one of several subscription plans, others charge depending on your user number, and others ask you to contact them and negotiate for the end price.

So, the cost of a learning management system can be very different depending on all these factors. To understand what you need, it’s good to calculate the approximate costs of onboarding and training employees in your company. These numbers will show you what to expect from the learning management. Let’s start with them!

Cost of onboarding and training new employees

The average cost of onboarding a new employee, including their search, hire, and training, can vary heavily, from as little as $1,000 to more than $15,000. Instead of guessing what the final cost will be based on the “average temperature,” let’s see the factors that influence this cost.
  • The country of employment
    is an important factor in our calculation. Local prices, salaries, and life expectations determine how much you should spend to attract a local employee.
  • The vacancy salary
    is another important variable, showing how much you need to spend to attract people to your job. It defines the cost to onboard a new employee, as it always depends on how much you’ll pay for them monthly.
  • Vacancy advertisement cost
    includes everything you should pay to job boards, advertising campaigns, and other services you plan to use for promoting your job proposal.
  • Management system subscription costs
    are all payments to hiring, talent, and learning management systems that you’ve decided as necessary for your onboarding. We’ll dedicate the rest of the article to comparing various plans for such systems.
  • Turnover rate
    correlates with the onboarding cost positively: the more employees you lose each months, the more you must spend to restore your positions.
  • HR managers salary 
    calculated for the time of the average employee hiring time shows how costly is each vacancy for your company, so pay attention to this, too.
  • Additional expenses
    connected with employment may be connected with hosting various career-related events and helping talents with relocation, if you have such services.
So, the answer to the question of how much does it cost to onboard an employee depends on many factors, and to understand the final price, you should calculate them all together. Start from the considering your job position salary and see the average hiring time and turnover rate to approximate how much you should spend. Then, to clarify this, define from which country you want to hire an employee, whether it’s your home country or not, and add advertising prices and subscription costs. After that, you’ll obtain the final onboarding cost.

The cost of training new employees depends on the level of organization of training facilities in your company, and it is usually much cheaper than hiring new ones. In addition, while we all try to find the best candidates possible at once, further training is inevitable if you want them to become an integral and instrumental part of your company. Qualification increases, workflow adjustments, and knowledge exchange are important processes to maintain your company’s competitiveness and innovativeness.

So, let’s compare the hiring employees and training existing ones.

The cost of training employees vs. hiring new

Employees training includes only training costs, and thus, it is much less compared to the whole onboarding process, which usually includes some training as well. While new talents may come with developed skills, you should still adapt them to your company and show specific workflows that are present in your workplace, so learning management is necessary.

The cost of training employees vs. hiring new
According to the Association for Talent Development data for 2022, the average cost to train a new employee is $1,290, and this number grows slowly and steadily each year. The cost consists of the monthly subscription to an LMS and the sum of all educational materials costs. It’s usually several times lower than the onboarding cost, and you can lower it even more by choosing affordable LMSs, organizing mentorship between colleagues, and selecting educational materials properly.

For example, with $5/user for CleverLMS and some expenses for learning materials, education expenses per user will unlikely exceed $100 even for small/medium enterprises.
Add to everything above the fact that you’ll obtain a loyal and competent talent who’ll usually be happy to work with you, especially if they are already motivated enough to stay with you and learn. In addition, they’ll be much more motivated and satisfied with their work if they have opportunities to grow and develop there, improving their skills.

Thus, it’s much better to train and improve the existing human capital and search for new people only if you actually need them. Sure, there are cases when you should fire an employee, or they are willing to go for various reasons. But in all other cases, it’s better to invest in their development.

All your company and each of them will thank you for that.

LMS Pricing Models

Let’s now proceed to various approaches adopted by different platforms. They depend on the company’s mission, vision, and target audience, and there are many pros and cons in each choice.

We believe, for example, that the user-based subscription is the best approach: it’s the most affordable, as you pay depending on your company’s size, for resources you actually need. As your company grows, you can accommodate growing LMS expenses easily with your increasing profits. Different vendors have different approaches, so let’s explore some of them.
A free model
is when the primary LMS app is totally free to use, but it’s usually associated with a lack of proper support (or only a paid one) and potential hidden costs, such as add-ons and modifications required for the proper functionality. They also often require at least initiatory programming skills and are hard to install in general.
License purchase
is a one-time purchase of the tool, which you may download on your desktop or smartphone or use directly on the web as long as you need it.
is the most frequent option for LMS SaaS pricing: a fixed monthly or yearly price for various plans, depending on available features, user numbers, and other options.
User-based subscription
is more smart subscription approach, so more and more LMSs are adopting it. While various subscription plans provide various numbers of users possible, here you can evaluate your user number precisely and pay directly for them.
Custom pricing
is when a company doesn’t provide you with a specific plan but rather offers you to contact them and negotiate. It enables flexibility, as you can choose your terms and propose them to the company, but it isn’t transparent, so it’s unclear at first how much you should pay and this can repel potential customers.
is the model when you pay for the number of system usages. While it seems to be fair, as you pay more for the more system time used, it often leads to overpayments and isn’t very cost-efficient for LMS software pricing.

CleverLMS pricing plans

Our tool’s pricing approach is intended to be as accessible as possible while preserving everything necessary for efficient learning and team management. That’s why we have three primary factors, defining our pricing approach.
Essential features
without anything excessive: everything that you need for proper onboarding and management of your employees and uplifting their skills. This way, we maintain our prices low while solving all corporate problems.
High customization and white-label mobile applications are what enable our customers to create their own educational platforms, such as Kärcher Academy. As we take all deployment and setting up to ourselves, it saves their time and money significantly.
Pricing per user approach
ensures that we’ll charge our customers only for the actual value we bring to them, and they will not overpay a single dollar for it.
CleverLMS costs up to $5 maximum for small packages under 100 users, so you can easily and transparently calculate the price of your corporate education. If your company is larger, the price per user will be lower. Also, we provide on-premise options for those who need their own educational tool and private cloud solutions for large corporations: in each case, the price will be negotiated as well.
LMS-platform CleverLMS
So, we work to reduce the cost of recruiting and training a new employee while facilitating this process as much as possible.

LMS pricing comparison

Let’s wrap the article up by building the learning management system cost comparison table. Where possible, we also provide a bit of examples of software using this model.
The industrial & manufacturing LMS pricing is built on features to manage the learning while maintaining the workflow. As such areas require high competency and work intensity, it’s much better if employees can learn as they work without detachment from the process. That’s why mobile learning is so relevant today, as it enables employees to learn during their work using smartphones and integrate all learning tasks with the work schedule.

Therefore, LMS system pricing depends on the approach to pricing and the features available in it. The more features are there, and the larger the user number, the larger the price you should pay for it. With a white-label mobile application and a fully customizable interface, CleverLMS is the best choice for industries where employees have no time to spend at the computer and should learn during the work process. Examples are preparing teams in manufacturing, retail, banking, and hospitality fields: teaching industrial safety, sales, couriers, and bank advisors. Task scheduler and tracking options enable the company to increase its productivity without any drawbacks regarding work efficiency during learning.


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