eLearning Developer

So how much does it cost to hire an outside eLearning company? It depends. There are many different kinds of eLearning companies. There are large content development companies that have substantial staffing and associated overhead to cover, a panoply of “one-man-band” eLearning companies run out of garages around the world, and mid-range “boutique” companies that offer competitive pricing due to low overhead, but that have adequate resources and experience to tackle a wide range of projects. The hourly rates a company may charge is largely dictated based on several key factors:

• Fixed Bid vs. Hourly Costs
• Large brick and mortar vs. Virtual companies
• US-based vs. India or “off-shore”

Fixed Bid vs. Hourly Costs

Many companies will not disclose the actual time and tasks that make up an eLearning development project (fixed bid). While a fixed bid ensures that the vendor cannot go over budget, a conflict is created whereby the vendor’s goal is to keep costs and scope as low as possible, even though the client may discover down the line that it wishes to increase the project complexity. The answer to evolving client needs is often “That’s out of scope so it will cost you more”. This can be frustrating. Whenever possible, work with vendors that offer development programs based on actual work effort. Estimates should be given based on a solid understanding of client expectations, and every effort should be made to come in on time and budget.

Large brick and mortar vs. Virtual companies

There are several large US-based eLearning companies that charge higher hourly or fixed bid project rates because they have a large full-time staff overhead to cover. If a company is not working at 100% capacity, they have to charge hire hourly rates to cover their ongoing costs. For example, even though they may have costs of $40 per hour for an instructional designer, this designer may not be working at 100% efficiency on paid projects. Therefore, the firm may have to charge and extra 15% or more on this person’s time. On the other hand, many one-man-band or small companies essentially hire freelance talent to work on projects on an as-needed basis. While they may charge lower rates, their quality and ability to meet deadlines is suspect.

US-based vs. India or “off-shore”

Many off-shore companies will claim rates of $18-$25 dollars US for eLearning development. Many India-based eLearning development companies are actually quite talented, but low hourly rates do not tell the whole story. While the hourly rates may be low, the actual project costs can end up being much larger as a result of several factors:

• It is not uncommon for any firm that has a signficant time and cultural difference from you to take 3-4 times the number of hours to produce the work you desire. This is not an India-specific issue, but a global fact of doing business.
• Significant time, cultural, and language differences should not be under estimated. These factors remain considerable impedances to eLearning project management including time, cost, and quality.

When comparing eLearning companies, check their portfolio of work and confirm with satisfied clients that the project came in on-time, on-budget, and with minimal frustration.

The time required to author your eLearning courseware can vary greatly, depending upon several factors such as:

• Rapid eLearning vs. Custom
• High-impact vs. simple graphics
• Custom Interactivity vs. Templates

Rapid eLearning vs. Custom

Rapid eLearning (e.g. simply converting PowerPoint files into SCORM packages using a tool like Articulate, Camtasia, Captivate, or some similar tool)  can be completed comparatively faster than creating highly custom courses natively in Flash.

High-impact vs. simple graphics

Inserting static photos and clip art into your instruction is comparatively faster than creating custom 2 and 3D Flash illustrations and animations.

Custom Interactivity vs. Templates

Creating simple activities (drag/drop, multiple choice, etc.) is comparatively faster than creating custom branching eLearning scenarios, for example.

High-level Instructional Design Tasks

Let’s look at a high-level listing of instructional design tasks based on the following scenario:

You have converted your existing employee on-boarding course into final approved storyboards that are ready for production. The storyboard includes narration to be recorded by a professional voice talent. You wish to have key bullet points and images synchronized to fade in and out in synchronization with the audio and you wish to have the course created natively in Flash (although Captivate would take about as long). You also wish to have some form of basic interactivity every 5 minutes or so to retain learner interest, and you wish to have two custom branching scenarios. The course will conclude with a graded quiz.

The total labor for the above is 220 hours. Note that these hours are based upon using a highly skilled and experienced team comprised of eLearning development experts who have created dozens of hours of courses already. Internal training departments that are new to this process will find that times take significantly longer as they overcome significant learning curves.

• eLearning Project Manager
• Courseware Author (Flash, Captivate, etc.)
• Programmer
• Instructional Designer
• Quality Control/Editor

For more information regarding the tasks and times associated with eLearning Instructional Design (storyboarding, script writing, learning objectives, etc.), please see the related article on this website.