This is a tough parameter regardless of the industry, but even more so in trying to find a one size fits all approach in the trades industries. Different jobs require different knowledge and different trades require different skills. With the information you provided, the best approach is going to be one of a percentage of total salary (truly my opinion only). You don't state how many employees you have, but based on your revenues and location, I can assume you have approximately 450 employees. If they each make an average of $70,000 per year for a total of $31,500,000, you would want to spend 3-5% of that amount on training and internal marketing, or $945,000-$1,575,000. Depending on your trade focus and desire to grow into new markets or trade offerings, you may spend more or less. If looking to expand your production offerings, you're going to want to be on the higher side in order to cross train, re-train, and new-hire train individuals through the various needs of the company in the field. I have often found it easier to train an already interested employee in a new trade who understands the company's goals, than it is to hire in a new person who already has the skills but may not be a fit for the company culture.
On a side note, if your company is heavily tech based in the field or in the office, your training costs for the positions dealing with this equipment and technology will be more in comparison to the rest of the positions. Time and ever-changing technology will require them to spend more money and labor in staying abreast of how to apply their tech knowledge and make those tech investments worthwhile to the company. I have seen more than one old school contractors not understand this bit of the changing industry, spend millions of dollars on tech equipment, only to not invest in the skillset of the guys operating it because training was "too expensive" or "cost too much labor". My point here is, be prepared to alter your training budget based on the training needs of the staff as well.
Best of luck out there!
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Trevor Toft
CFO
Ten Point Construction
Denison IA
(712) 263-5181
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Original Message:
Sent: 11-07-2022 11:06
From: Richard Gavin
Subject: Budgets for marketing and training
Looking for guidance for establishing annual budgets for Training and Marketing. We are a public bid contractor, approx $200m revenues.
Marketing for promoting company internally and externally. Website, social media, etc. Not so much business development.
Training including career development of employees. Training and career development programs, 1 F/T staff.
what percentage of revenues do you use or how to you determine budgets.
Thanks for input.
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Richard Gavin CPA, CCIFP
Chief Financial Officer
CAC Industries, Inc.
Long Island City NY
(718) 729-3600
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