How much do trainers earn? How much does a training session cost - an analysis of per diem rates for trainers

The idea to write a detailed explanation of the topic came to me when I was preparing for an HR roundtable discussion. For this, I prepared a survey "Training Market from an HR Perspective - Experiences 2023 and Expected Trends 2024" to have a starting point for the discussion. Prior to the programme, I had a discussion with my partners, where Judit Pécsi, the HR Director of UNION, said that she too has to sell the "business" why a particular training costs what it does.

It was this sentence and the results of the survey (not very encouraging for trainers) that prompted me to write this article. I hope to use the analysis to put a set of arguments in the hands of HR practitioners. Another motivation is to help trainers determine their own monetary value, either to clients or to larger training companies.

What is the difference between a training per diem and a trainer per diem?

Before I get into the analysis, I would like to clarify two concepts that are probably obvious to most HR professionals, but still confused in common usage. These are training and trainer per diem. Often these two concepts are one and the same. This is the case when we talk about "freelance" or in-house trainers, as the amount paid by the client remains entirely with the trainer.

Taking a slight detour from the subject, I would like to point out that in my terminology, a "freelance" trainer and a company-owned trainer are not the same. Both types of trainer are not affiliated with large companies because they have the willingness (albeit to varying degrees) to take risks and the confidence to believe that they can go out on their own and sell their work on their own. But what's the difference?! For me, the "freelance" wording refers to my colleagues who work mainly independently, but are often loosely linked to larger training companies as subcontractors. They are usually self-employed. In contrast, there are several of us who own our own company (Ltd.) and together with other senior trainers we form a "network", which allows us to manage large projects with ease. This "network" is not put on display, but it is based on the same logic as the Flow Group established in its institutionalised form. In other words, we have 15 years of experience, a wide range of competences and we are there for each other, both as professional and human support.

Getting back to the original topic,when a company hires a larger training company, the training and the per diem of the trainer are split in two. Which is completely understandable, as the training company has extra costs, such as:

- office maintenance, even with the addition of a training room,

- salary of back office colleagues (finance, possibly tender writer),

- marketing costs, etc.

The question is what are the realistic ratios between the daily rates for trainers and training.I used to work as a subcontractor myself, so I don't have any definite figures, but when I submitted a big tender last year in 2023, trainers around me were asking for 120-150,000 Ft per day, but there were some who mentioned that they would eventually take it for 100,000 Ft because that's what they get at other companies. And in percentage terms, I know that trainer per diem is about 25-40% of training per diem. So for the analysis I will use the median of 33.33%. For me, somewhere around 60% would be a realistic rate (cost dependent), because getting clients is key, true, but the lion's share of the work is still done by the trainer.

I would also like to point out that a trainer working for a large training company, a "freelancer" and a trainer with his own company can be professionally just as qualified and highly skilled if they have the same seniority. The main difference between them is a willingness to take risks and a desire for freedom/autonomy.

Analysis

The survey covered a wide range of topics: e.g. most popular training, training preparation, follow-up, feedback on results, length of programmes, number of training days ordered in a year. What is relevant for this article is the average daily rate paid by the 25 companies that completed the survey for 2023 and the projected rate for 2024. 75% of them were multinationals and 50% were companies with a turnover of 1-10 billion HUF. The published figures did not fill me with great optimism, but they were in line with my own experience. After all, it was easier to sell training for over 300,000 HUF in 2014 than in 2024.

Background for analysis:

- Below I will use the salaries of an HR Manager and an HR Business Partner as a basis for calculating the trainer per diems, the reason being that many of us were in these positions before we became trainers, or, if we wanted to go back to the corporate side, this would probably be the direction. Instead of HR BP, it would seem logical to use a senior internal trainer position as the basis for the calculation, but Hays' Salary Guide does not have their salary data.

- As an independent trainer, we could offer 10-12 days of training per month in a good capacity, but on the one hand we are on vacation, and on the other hand very few of us can sell that many on average, as the demand from companies is much lower in January and December, and July-August. So, if you look at the whole year and project it back to 1 month, the reality is more like 8 days. That is, in about 12x8=96 training days we should earn the amount of money we would earn as an employee in an HR position in a year.

- A training day has a serious preparation and follow-up work, which includes: client matching, putting together the program, preparing for the training, invitation letter, FAR administration, communication with the hotel, sending out the training materials, checking with the client on the results.

- By business related administration, I mean invoicing, remittances, preparing tax returns, liaising with accountant. I also exclude time spent on purchasing training equipment.

Please keep in mind the logic behind the analysis, as there will be assumptions from both directions and factors that I cannot include in the calculation. All of these will "distort" the overall picture a bit, but I don't think it is possible to summarise the issue more accurately than that.

Factors that cloud the picture for a specific calculation:

- Not all companies have a cafeteria or 13th month salary or year-end performance bonus. However, in HR Manager positions, there is usually unlimited car usage associated with the position, which is difficult to quantify exactly.

Spanix:

- For trainers, I average 2 days vacation per month, which is 24 days per year. This is less than a senior trainer would be entitled to in employment, but it is approximately realistic.

- There is paid sick leave on the company side. Not for a trainer.

- The average monthly net base salary for an HR Manager/Middle HR Business Partner is lower than the taxable income of a trainer, but a trainer may have significant travel expenses for rural locations. Furthermore, in the case of a LLC, if you declare yourself on minimum wage and take the profits as dividends, the pension you will receive is a fraction of that of an employee declaring on a higher wage.

- It is not a mathematical question, but neither can the analysis quantify the inestimable value of freedom. However, there is a trade-off for working weekends.

To determine the salaries of HR professionals, I used the average salaries from the "Hays Hungary Salary Guide 2023", which is based on information from more than 2,000 employers and employees in 14 industries.

I would like to derive the calculations through two examples: 1.) First, I will analyse how much a trainer with 15 years of experience and high seniority would earn if he/she were working for a company as HR Manager and what the daily rate for a trainer would be. I also write about the reasons why training per diems have decreased rather than increased in recent years.) I will then show, using the example of a trainer with a slightly lower seniority (8-10 years of experience), what the difference in per diem is between a company working with a freelance trainer and a larger training company (training vs. per diem) and what the advantages and disadvantages are for each of the different partnerships.

1. Trainer per diem compared to an HR Manager's salary

At first glance, the HR Manager comparison may seem like a grandiose one, but there are actually many of us who have come from such a position or would be likely to apply for it. From my own immediate environment, I could immediately list 6-8 trainers of such seniority with their own companies. (We don't work together by accident, if we can help it.) And I think HR managers should be happy about that, as it can be reassuring to them that such professionals are doing the development of their colleagues.

I hope the numbers in the two tables below are clear. It may be odd wording to use the term "Per Diem" in the HR Manager table, I just thought it was clearer what I was comparing what to.

Let's see, in light of the above amount, and based on the number of training days realistically held in a good quality, what a daily fee would be if the trainer has his own company.

The training per diem of 333,000 HUF is obtained by multiplying the HR Manager's "per diem" by the number of working days (21.17) and dividing the resulting amount by the 8 training days.

Looking at the 2023-2024 data, a fraction of trainers received this amount. And of course, on the one hand we have no information on how senior those trainers were, and on the other hand we have no information on whether they worked through a training company or independently.

(A small digression: many of us work not only as trainers but also as organisational development consultants, so a little additional information: to earn the 125,873 Ft per diem with work that does not require preparation and no follow-up work, a realistic per diem would be 204,979 Ft. - I have not included the derivation of this in the article, but the only difference to the above calculation is that I have divided the multiplication of the first two elements (8 by 5) by 13 days.

Reduction in rents

Before I move on to the next calculation, I want to go into a little bit of what might be the reason that day rates have decreased in many cases over the past year, rather than increased.

- The KATA tax form has brought the rates down because there is more left over for the trainer,

and unfortunately after its demise the market has not yet settled back down.

- More trainers, more competition.

- Trainers turned teachers have lower income expectations.

- Training is not as "fancy" as it was around 2010. It was considered more special and exclusive because it was available to relatively few company employees.

- There is less demand due to special taxes on industries and the economic crisis.

- Companies are more cost-conscious (online auctions can really drive down the daily rate).

All of the above reasons explain the price trend, but I would like to ask HR professionals that if they really respect their professional partners and want their colleagues to develop with the help of outstanding professionals, they should represent to the business areas that a daily rate of 330,000 HUF is not an out-of-this-world amount, as it does not only pay for the work of that day.

Who should I work with as an HR person?

I've shown above what I think (I'm certainly somewhat biased) would be a realistic daily rate for a company to hire a senior trainer with their own company. But before we go any further, let's look at the pros and cons for companies of working with them:

Advantage: a) Excellent attention. b) High flexibility and adaptability.

c) Good references. d) Strong expertise. e) More favourable price (compared to training companies).

Disadvantage: a) Less licensing eligibility. b) Weaker technical background.

c) Stronger dependency (client is stuck with the trainer)

The other two options are to hire freelance trainers or larger training companies. After the mathematical derivation, I will also discuss the advantages and disadvantages of this from the point of view of the different actors.

2. Using freelance trainers or working with larger training companies? Separation of training and per diem for trainers

Second, let's look at the per diem of a mid-senior trainer in light of the salary of a medior HR Business Partner.

(The numbers below are just cornerstones. Each trainer should consider for themselves what their salary requirements would be if they went to work on the corporate side, and should calculate their own trainer's per diem in light of that. This analysis is just a starting point)

The monthly tasks of a medior freelance trainer are 95% the same as those of a senior with his own company. The only difference I have made is that I have increased the preparation time by half a day because of the smaller routine. Since half a day of leave is less due to age, the number of sum days has not changed, and thus the final formula is the same as the previous calculation.

On the other hand, if a trainer works regularly for one or more larger training companies (no employment relationship is established), his sales tasks are eliminated and some work (e.g. FAR administration, venue coordination) is taken over by the company. This allows him to keep more days, and the amount of preparation and follow-up work is somewhat reduced. This gives the following figures.

The numbers may lead one to ask why companies should work with training companies, or why freelance trainers are categorised under training companies. I would therefore like to make a few more arguments for the justification of training companies.

[page Advantages and disadvantages of working with a larger training company from the trainer's or client's perspective]

From the point of view of a customer (company):

Advantages: a) More trainers have more comprehensive knowledge. b) Professional background.

c) References. d) Quality assurance. e) Access to funding.

Disadvantage: a) Higher daily fee. b) Less flexible. c) Communication more

more people, so more easily distorted.

C

As seen through the eyes of a trainer:

Product: a) Most trainers don't like to sell, and big companies can

b) Belonging to a community. c) Not in all cases, but often
many.

the trainer company provides professional knowledge.

Drawbacks: a) Lower per diem. (Many companies only

100-120.000 Ft to the trainer.) b) Not only the client, but also the client

expectations of the client. c) It is more difficult for the trainer to

it is more difficult for the trainer to deal with conflicts, because he is not only representing himself.

As I have explained above, there are arguments for and against all types of cooperation. I hope that this article has helped HR people to have a complex overview of the options available to them, and for trainers to position themselves properly in the market.