Have you ever wondered why IT bootcamps are so expensive? Our fearless leader and CEO, Eric Wise, one of the original bootcamp creators for Java and .NET coding, explains all the costs involved for labor, content, and resources needed to build and deploy business-to-consumer bootcamps in this week’s blog.
Accelerated employee training bootcamps for IT skills development represent one of the most affordable solutions to the IT talent shortage that most organizations face. Although these programs offer a faster, less expensive alternative to higher education, the average price is still roughly $13,584 per student.
Due to a gap in alternatives, some organizations have started teaming up with business-to-consumer bootcamp providers to solve internal IT talent issues. It’s important for corporate leaders to understand enough about the costs involved to avoid unnecessary expenditures. As one of the original bootcamp creators for Java and .NET coding, I can tell you from experience — the amount of labor, content, and resources needed to build and deploy one of these programs can add up fast.
To help you make smart financial decisions without jeopardizing the quality of your training program or the employee experience, I’m lifting the curtain on all of the cost factors involved in developing a consumer-facing bootcamp program. Use this insight before adapting an employee training solution for your organization to ensure that your investment pays dividends in advanced IT skills and capabilities.
Enrollment
$1,000 – $3,000 per enrolled student
For bootcamp programs to be successful, they need to attract enough learners to support the cost of deployment, which makes enrollment a particularly important factor to consider. The costs associated with enrollment can vary between providers and will depend on two things:
Competitive Forces
Generally speaking, the more regional competition a bootcamp provider has, the higher their operating costs will be. Between marketing and sales functions to gain program traction, and battling other providers for the internal talent needed to execute programs, it’s a pay-to-play industry. By default, those higher operating costs eventually trickle down to the cost of service.
Process
There are two basic approaches to enrollment for bootcamp-style IT training programs:
- Selective Enrollment ($$) Some providers believe in a selective, multi-step enrollment process, including interviews, aptitude assessments, and pre-work courses. Each step adds cost to the bottom line in the form of labor, content creation, tracking systems, etc. While the initial cost is higher, so are the program outcomes due to careful learner placement.
- Open Door ($) Other bootcamp providers have more of an “open door” enrollment process that accepts anyone able and willing to pay. Participation numbers may be higher due to this type of program’s accessibility, but without a process in place to vet qualified candidates, the program outcomes may be less impressive.
Instruction
$1,500 to $4,000 per student
When it comes to employee training programs, instruction represents the largest expense by far. Several factors play into the cost of instruction and, coincidentally, the caliber or value of the program investment:
Classroom instructors ($$$)
$90,000 – $150,000 per classroom instructor (annually).
The classroom instructor is the “lead” educator, which means they are primarily responsible for delivering content, mentoring learners, and assessing progress. These professionals have at least 5+ years of instruction experience in addition to first-hand industry experience, plus a laundry list of soft skills (e.g., active listening, information delivery, empathy, etc.). A classroom instructor’s salary can vary significantly based on experience level, skill sets, and geography.
Support instructors ($$)
$75,000 – 130,000 per support instructor (annually).
Support instructors assist classroom instructors during off-hours or with overflow work when things get busy, similar to a teacher’s aid in traditional education. While support instructors are valuable assets to a bootcamp provider’s educational team, they do not have the industry or teaching experience needed to lead a classroom on their own.
Lower quality bootcamps will often try to cut costs by hiring recent bootcamp graduates as classroom instructors. For this reason, it is imperative that organizations look into the experience level and quality of a provider’s instructor staff before opting into an IT training program.
Part-Time Instructors ($$)
$35 to $60 per hour
Some program schedules are part-time only, meaning classes are held after hours or on the weekends. In such cases, many instructors work full-time jobs, and moonlight as teachers in their off-time, which makes their cost considerably lower than a full-time instructor. Once again, the hourly rate for a part-time instructor will depend on skill level, experience, and geography.
Instructor Resources ($)
$55 per hour for part-time instruction resources.
$70 per hour for full-time instruction resources.
Class size will influence whether or not an IT training program needs additional instructor resources, such as a part-time or support instructor, to manage the workload. Smaller classes can get away with less instructional staff. As the class size grows larger, more instructors will be necessary to ensure the best student experience. Generally speaking, we recommend an additional instructor resource for every 14 learners. Using this as a benchmark in addition to the average hourly rates for instructor resources, the estimated cost breakdown based on class size looks similar to this:
| # Students | Length(Hours) | Instruction Costs | Cost / Student | ||
| Full-Time | Part-Time | Full-Time | Part-Time | ||
| 14 | 400 | $28,000 | $22,000 | $2,000 | $1,571 |
| 20 | 400 | $56,000 | $44,000 | $2,800 | $2,200 |
| 14 | 480 | $33,600 | $26,400 | $2,400 | $1,886 |
| 20 | 480 | $67,200 | $52,800 | $3,360 | $2,640 |
| 14 | 560 | $39,200 | $30,800 | $2,800 | $2,200 |
| 20 | 560 | $78,400 | $61,600 | $3,920 | $3,080 |
Additional Cost Factors
Program Length
Predictably, the longer the program runs, the higher the cost will be per student. However, I recommend caution when attempting to reduce costs here. Cutting the length of the program to lower costs could jeopardize the learning experience and the quality of job-ready skills produced by the program.
Workload
These programs are referred to as bootcamps for a reason. We’re talking about intense training sessions that demand much from learners and instructors alike. Most full-time instructors can handle 3 to 4 classes per year before burnout sets in. While limiting workloads is vital to maintaining health and satisfaction, it also means that they will be paid for downtime, a cost factor that ultimately inflates the cost per student.
Operational & Overhead Costs
$1,500 per student.
Like any other business, there are a variety of operational and overhead costs associated with running an IT training program. To name a few:
- Accounting & Legal – Accounting costs can range from general bookkeeping to administering loan programs and payment plans while legal costs are largely influenced by contracts, compliance, and regulatory filings.
- Space & Equipment – Rent and equipment costs will change drastically depending on the size of the program and the number of concurrent classes in session. Keep in mind, especially in reference to physical space, these costs are also hyper-sensitive to geography.
- Operations & Management Staff – IT training programs are intricate and require a seasoned team of professionals to answer phones, manage instructors and learners, run day-to-day activities, monitor performance, and much more. The human capital required to execute a consistent and dependable program is no small feat (or investment).
Curriculum & Content
$250,000 – $1,000,000
There are several ways to deliver curriculum and content, including written material, slides, demos, labs, assessments, and video. The quality of a program’s curriculum and content has an impact not only on the student experience but also the ability to scale a program. A well-designed and maintained curriculum pays dividends to the program in several ways:
- It increases the odds that students will achieve the desired outcome (job-ready skills).
- It reduces the burden on instructors to deliver content synchronously (what we call the “sage on the stage” approach).
- It makes hiring and training new instructors easier by providing sufficient “rails” for them to follow.
Creation & Development
However, creating said content and curriculum is no small feat. For perspective, it took me about eight months to create slides, labs, and assessment materials for the original .NET full-stack bootcamp I founded back in 2013. This set me up to deliver a “sage on the stage” experience (lecture-style instruction) where I had the resources to actively present information every morning and mentor or answer questions every afternoon. All-in, the time and materials cost was around $250,000 for what amounted to limited scale content.
I refer to the initial content as limited-scale because, without rich content like video (which happens to be the most expensive content to create) or instructor guides and resources, it would have been impossible for another instructor to step in, pick up the lesson plan, and teach the program. When the program expanded, and we needed to hire additional instructors, I had to personally train each of them and hold regular meetings to ensure that they were using the course materials as intended. As a result, the cost burden was exponentially higher.
To reduce this cost, we put a year of our time and funds into creating premium content, such as video, and instructor guides. The investment improved the learning experience for both instructors and students and enhanced the program’s scalability. However, reducing the cost burden associated with hiring and training instructors meant spending more on additional support staff, such as video editors, instructional designers, copy editors, etc.
Overall, the price to recreate our curriculum and content development and delivery model clocked in at over $500,000. Well worth the investment, but certainly not a one-time expense. I have seen other, less efficient organizations spend over $1M on content creation.
Curriculum Maintenance
Annual updates and maintenance – 30% of the initial cost.
Technical training curriculum must be actively maintained and updated to keep up with rapid changes in technology. This is a significant cost that also gets worked into the program’s tuition. However, the amount is typically amortized over several years.
Career Services
$40,000 to $100,000 per year
$500 to $1,000 per student per year
Be aware of turnkey training programs that offer services you don’t need. For example, many bootcamp programs include career services as a core part of their solution, such as job search tools and resources, or even dedicated job placement personnel who actively seek career opportunities for learners. In a program that runs three or four classes per year, a single career support professional could add another $500 to $1,000 to the cost per student. As an employer, you clearly don’t want or need these services, but that doesn’t mean you aren’t paying for them.
Summing IT Up
To understand the full financial picture, let’s look at a typical mid-market bootcamp with one program that runs eight (8) 12-week classes per year. Assuming that 20 students are enrolled in the program, requiring four full-time instructors over a period of 3 years, the cost breakdown looks something like this:
| Length (Hours) | 480 | |
| Programs / Year | 8 | |
| Years | 3 | |
| Total Students | 480 | * 20 per program |
| Instruction Cost | $ 1,612,800 | |
| Curriculum Build Out | $ 500,000 | |
| Curriculum Maintenance | $ 300,000 | * 2 years at 30% of initial build |
| Career Services | $ 225,000 | * 3 years, $75,000 per year |
| Enrollment Costs | $ 720,000 | * $1,500 per student |
| Operations/Overhead | $ 720,000 | * $1,500 per student |
| Total Cost of Program | $ 4,077,800 | |
| Cost Per Student | $ 8,495.42 |
In a perfect world scenario (absent any instructor turnover, drop-outs, unexpected legal costs, partnership fees, or costs associated with running a loan or ISA program, etc.), we easily reached a cost per student of $8,500.
As a program provider in a competitive region, this leaves little room (if any) for profit, leading many providers to cut corners as a way to improve margins. In an industry with underdeveloped regulatory oversight (a discussion for another day), the potential is high for employers to unknowingly invest in a low-quality learning experience that fails to deliver consistent outcomes.
There’s a Better Way to Bootcamp…
Stage 3 Talent is the byproduct of my search for a better, more cost-effective way to rapidly train and upskill workforces for industry 4.0 and beyond. Rather than invest in a turn-key program with limited cost/control flexibility, we help corporations build their own internal training programs in less time, with lower start-up costs. More importantly, we ensure that education results in the job-ready skills your organization needs to stay relevant, competitive, and essential in its respective industry.
Find out how we reduced program costs by 47% for one client and lowered their cost-per-student by almost half. Download the Case Study Learn more about Eric Wise.