In-House Trainer vs. Outsourced Instructional Designer - Which is Right for Your Business?

Here’s the scenario: You’ve been considering hiring an instructional design studio to make some training for your company. But you start seeing prices like $20k for a single eLearning course or $150/hour for a single person.

You start to consider: At these prices, should I just hire an instructional designer in-house?

Despite the initial sticker-shock of studio pricing, it can be surprisingly economical to outsource training development, even more so than outsourcing other jobs. L&D work is particularly good work for outsourcing. But that doesn’t mean it’s always the right path.

The answer depends not only on raw price but also on company size, training volume, and possibly existing budgets.

But there are a number of factors to consider when weighing whether to outsource ID work or hire internally. Stick with me through the math here – let’s see what makes the most sense for your company!

We’re going to consider a handful of important variables when deciding between hiring an in-house trainer vs. outsourced instructional designer:

• Full-time, in-house salary vs. one-off studio pricing

• Time to productivity & risk

• Down time

• Training demand & company size

• Budget Allocations

Let's dive in!

FULL-TIME, IN-HOUSE SALARY VS. ONE-OFF STUDIO PRICING

This is the core financial comparison you’re probably thinking about right now: do I pay studio prices for a single project, or do I pay someone’s salary to build as much training as we need in-house?

The most important thing to remember here is that paying a salary isn’t as simple as calculating their base salary against studio pricing. Instead, you have to calculate total compensation.

According to the U.S. Bureau of Labor Statistics, benefits alone cost an average of 30% of an employee’s total compensation. So, for an entry-level or Senior ID:

• $60,000 base comp = $78,000 total comp

• $80,000 base comp = $104,000 total comp

• $100,000 base comp = $130,000 total comp

And this doesn’t factor in the hidden costs the company incurs when hiring in-house:

• Lost productivity due to meetings, chats with coworkers, company parties and social events, etc.

• Equipment prices and software licenses

• Management time

• PTO, sick pay, maternity leave, and other leave

• Payroll taxes

• Other employees needed to help manage the company as it grows: IT, HR, etc.

And let’s not forget the cost of hiring a full-time employee in the first place.

SHRM estimates average hiring costs are around $4,700 per role, just for direct recruiting costs.

And even this doesn’t really cover it – replacing and hiring employees can cost 3-4x the salary of the role depending on the complexity.

This is because it includes recruiter time, interview hours, onboarding training, reduced productivity, management distraction, and mistakes during ramp-up. And for roles like L&D employees that are both creative and technical in nature, ramp-up can often be higher than other employee types.

That means, if you’re hiring for a $60,000 role, you may spend $180,000 or more to fill that role.

TIME TO PRODUCTIVITY & RISK

Time to productivity is one of the biggest factors companies underestimate.

A new employee can take 3 months to an entire year to reach full productivity when ramping up into a new role. While a good onboarding program can shave time off this ramp-up, in my experience, many companies have short or non-existent onboarding programs – hence one of the most common reasons they consider hiring ID roles at all!

This ramp-up period means that a company pays total compensation without getting the full output for an employee for up to a year.

An experienced studio, on the other hand, begins producing deliverables immediately. They don’t require onboarding training, don’t need to learn much about the business, don’t need to have a lot of nuance in the politics or functioning of the business. They don’t need to learn to run the LMS or pull reports or do weekly team tasks. They simply learn what they need for the success of the project and hit the ground running.

The trade-off here, of course, is in the long-term game. With a full-time hire, you eventually get an employee with more strategic knowledge of the business. This is fantastic for investing in an employee who will one day step into a management role but not relevant for an outsourced studio.

Of course, time to productivity is only one kind of risk. Another big one is hiring risk.

If you hire a studio that doesn’t perform, you end the contract and part ways. Problem solved.

However, when a full-time employee underperforms, it costs much more. Not only do you have lost productivity, but the employee now requires performance management, possible HR involvement, morale issues for the rest of the team, and eventual replacement costs.

I can speak to this issue personally. I’ve worked on a team with an underperforming peer. The issue in our case was either keep a teammate who does 20% of the work or cut them but risk their backfill not being approved.

The result was a lot of frustration and rework. My manager and I often redid this employee’s projects almost entirely. So, any project took nearly double the amount of time – literally.

Compare this to the time we hired a contractor who underperformed. After a few weeks, we simply ended the contract. I still had to redo his work, but we were no longer paying for that person’s incompetence.

DOWN TIME

When you pay an employee’s salary, you pay for all their time spent that week. That means, if they work overtime, you still pay the same rate. But if they don’t work a full week for any reason – you still pay the same rate.

Let’s say you have an employee with health issues. That person visits a physical therapist 5 hours out of each week. Rather than 40 hours, you pay the same salary for 35 hours.

Let’s say there aren’t a lot of training demands for a couple months. Your internal employee can still catch up on maintenance work or clean up the LMS during this time, but you’re still paying the same rate despite little output or low project volume.

Most teams have a weekly meeting, which – let’s face it – may not be fully focused on business. There is often chatter about weekend plans, vacations, special events, and other goings-on in your employees’ personal lives. You still pay the same rate.

PTO happens. Your employee goes on vacation. You still pay the same rate.

See where I’m going with this? With a studio, you only pay for the work to be completed rather than non-productive time.

TRAINING DEMAND & COMPANY SIZE

Up till now, there’s a lot of evidence for hiring a studio instead of an in-house ID. Here’s where it becomes more nuanced.

The truth of it is, outsourcing is not always cheaper.

If training demand is constant, predictable, and high-volume, full-time staff can become more economical. Not only can a fully staffed training team handle a large volume of work, they also often build off each other’s templates, which can save a lot of time. If a company needs LMS administration, internal teams do that. When a company needs a report pulled, internal teams can do it. Their fixed salary can be spread across a high output of work.

And company size actually plays a role here, too.

Smaller companies tend to benefit the most from outsourcing. They typically have less consistent training needs and not enough work to staff a full-time training team or even possibly a single person. Avoiding the long-term payroll commitments is beneficial for them.

Medium and large companies, on the other hand, usually benefit from a hybrid approach. Most have a smaller internal team and outsource as needed when the workload becomes too high.

Take it from someone who has worked on constantly overloaded teams: Bringing someone in to handle a one-off course is often the only way the course will get done without having a mutiny on the team. I kid, of course, but trust me: don’t overload your teams with more work than they can handle. This is one of the fastest ways to incur high turnover, especially on training teams, which are chronically understaffed in the corporate world.

BUDGET ALLOCATIONS

Another avenue to consider is that studios on a contract can often get hired faster because of the budgeting bucket they fall into.

A full-time employee increases permanent headcount, impacts payroll long-term, incurs benefit costs, and often requires HR and executive approval.

A studio on a contract, however, often comes from a temporary project budget or a training, department, or vendor budget pool already set aside.

Because of this, a contract hire might be easier and faster to get approved than an internal hire. This is one of the reasons hiring a studio becomes very popular during hiring freezes, reorgs, or economic uncertainty – work still needs done, but hiring a studio isn’t a long-term commitment.

LET'S PUT IT ALL TOGETHER WITH AN EXAMPLE

Let’s use the example of a Senior Instructional Designer role in-house – simply because when hiring a studio, you should expect senior-level work. Let’s say the Senior ID role has a $97k salary, which is average in the U.S. according to Glassdoor as of 2025. We’ll compare that to hiring a studio at $20k per 15-minute eLearning course.

Firstly, for the in-house role, we have to consider their total compensation to account for additional salaried costs: benefits, software, PTO, equipment, 401k match, etc. So, for this example, that $97k is actually about $126k.

If the studio creates 5 courses for you over the course of a year, that would cost $100k. Compared to $126k for a full-time employee, you’ve actually saved money in raw numbers.

And of course, this assumes we’re in the Senior ID’s second year of work or beyond – as we discussed, they won’t be fully productive for potentially their entire first year. And, as we discussed, the Senior ID will have other things pulling their attention – meetings, LMS administration, reporting, their own training to complete, emails, team initiatives, etc. – whereas, a studio will be more focused and productive full-time.

Despite this, however, the Senior ID might be able to produce 8 or more eLearning courses in a single year, depending on complexity. 8 courses breaks down to nearly $16k per course. So if the volume at the company is high enough, the full-time employee makes more sense here.

SO, WHAT CAN WE CONCLUDE FROM THIS?

Mainly: Whether to invest in outsourcing training to a studio or a team of in-house trainers – or both – depends on your company’s needs.

Studios make sense a lot of the time, but once in-house volume becomes high enough to keep employees busy with little idle time, a full-time employee or two may make more sense. But once volume is this high, it’s easy to overload in-house employees, which is when a hybrid approach is likely the best course of action.

If you're in a season where outsourcing makes sense, Phoenix Learning Solutions exists exactly for that moment.