Learning curve cost: when staff learn on the job

Key takeaways

Learning curve cost is the extra time and the extra errors a task takes while someone is still learning to do it. When a business asks existing staff to pick up an unfamiliar function, it pays this cost in full, often for a task that will be done too rarely for the learning to pay back.

• A task done monthly takes far longer to master than one done daily.
• 40 hours of self-teaching at £23.20 an hour costs about £930 before any output.
• Early work on the curve carries the highest error rate.
• Learn in-house what you will repeat often; buy in what you will not.

What is learning curve cost?

Learning curve cost is the difference between what a task costs when done by a beginner and what it costs when done by someone experienced. The learning curve describes how time per task falls with repetition. The cost is the area under that curve: all the slow, uncertain early attempts.

• The hidden costs of doing everything in-house
• Generalist vs specialist: who should do the work?

How much does learning on the job cost?

Learning on the job costs the hours spent learning plus the lower quality of early output. If an employee on £35,000, costing about £23.20 per worked hour, spends 40 hours working out how to run email campaigns, that is about £930 before a single campaign is sent. If they then run one campaign a month, the skill never becomes fast.

• The true cost of an employee in the UK
• The cost of training a new employee

Why does frequency matter so much?

Frequency matters because skills fade without use. A task done daily is mastered in weeks. A task done quarterly is relearned each time. In-house generalists tend to hold many low-frequency tasks, which means they are permanently near the bottom of several learning curves.

• Wearing too many hats at work: the cost to a small team

When is it worth learning in-house?

It is worth learning in-house when the task is frequent, close to your core work, and likely to be needed for years. It is also worth it when understanding the task makes you a better buyer of it later.

• Learn in-house: frequent, core, long-lived tasks.
• Buy in: rare, specialist or fast-changing tasks.
• Learn the basics, buy the delivery: tasks you must be able to judge.

• When not to outsource

How do you shorten the curve?

Shorten the curve by giving the learner structure. A written procedure, a worked example and someone to review the first attempts remove most of the trial and error. Where nobody in-house can review, the curve is at its longest.

• The cost of undocumented processes

How do you estimate the cost before assigning the task?

Estimate three numbers: hours to become competent, extra hours per task while learning, and the cost of likely early mistakes. Multiply the hours by the person's loaded cost. Then divide the total by the number of times the task will be done in the next two years. That gives a learning cost per use, which you can set beside a specialist's price for the same output.

A task done 200 times spreads the learning thinly. A task done 8 times never recovers it.

Which tasks are most often learned the hard way?

The same handful of tasks appear in most small businesses, taken on by willing staff with no training.

• Building or editing the website.
• Setting up and running paid advertising.
• Configuring a CRM or accounting package.
• Payroll changes at the start of a tax year.
• Designing marketing materials.

• DIY website hidden costs: what a builder really costs

What is the cost to the person learning?

There is a human cost alongside the financial one. Being responsible for something you do not fully understand is stressful, especially when errors are visible to customers or colleagues. People in this position often work extra unpaid hours to compensate. Giving them structure, a reviewer or a specialist to call is as much about keeping good staff as about saving money.

What does this look like in practice?

A pattern we see with websites: an office administrator is asked to update the site, spends two days learning the editor, publishes a page that breaks on mobile, and is not asked again for six months. Next time the two days are repeated.

• See client work
• BPO Solutions for UK businesses

Learning curve checklist

Ask these before assigning an unfamiliar task.

• How often will this task be done?
• How long until the person is competent?
• What do mistakes cost while they learn?
• Who can review their early work?
• What would an expert charge for the same output?

• The hidden cost audit: score your business in an hour

Next step

Tell us which new functions your team has had to pick up this year. We will help you decide which are worth learning in a 30-minute call.