Employee Development Costs in CTC: How Do You Approach This in Your Organization?

Dear All,

I solicit your views on the following topic: Employee Development Cost as part of CTC.

Regards,
Mou

Hi Mou,

Yes, for some companies, training and development costs do form a part of CTC. Companies basically define the annual budget they have to spend on employee developmental programs and training. Depending on the hierarchical level of the employee, the training cost is added to CTC.

Regards, Hitesh

Hi,

Employee training costs can be included in CTC under the following conditions:

1. If the training is on technology and is conducted by an exclusive trainer or a vendor that incurs costs for the organization.

2. If the organization provides training on products or services that are developed and implemented by the organization itself, which can be utilized by any other organization if the employee moves out.

3. If the training is not directly related to work, such as soft skills training or any behavioral training, especially if the employee is willing to consider it.

Regards,
Vijayakumar

Hi all,

If the training, as per the training policy, is mandatory to cover each and every employee for certain days of training, then where does the intent of the employee to participate or not to participate come in? As far as special training programs are concerned, I do not know if any organization allows its employees to participate in such programs that penalize them, as the cost is added to his/her CTC.

I am not fully convinced even if a training like soft skills is included in CTC. Is it not helping the organization in the form of improved productivity levels if an employee hones his/her skills?

Anybody care to comment, please?

Regards,
Srinivaskvmk

Hi,

I do agree with Srinivas. Whatever I have mentioned pertaining to a single employee to improve his personal skills might be added to his CTC. That is the reason I have only added it with employees.

Regards,
Vijayakumar

I guess by adding up so many things to CTC, it will be artificially inflated. No one can ever get what is taken home. CTC would become a cheat to the company.

Hi,

I am of the view that the training cost should form part of employment cost or recruitment cost if it is incurred at the induction stage. This is the cost expended to ready the employee to perform. The training cost during the course of employment can be grouped under Training & Development Costs. Even though both the costs are incurred towards employees, they are not conventionally forming part of personnel cost. CTC (in common parlance) is normally viewed as the costs incurred for salary, perquisites, amenities (canteen, uniform, etc.), and contributions to social & retiral funds. Trust I have given a clear picture of CTC.

Training cost is a part of CTC. It is quite ridiculous to hear. In fact, IT companies are framing policies as they wish without any humanity or morals. Even employees keep on working without any hesitation as they get a handful salary. It will pave the way to unrest among employees in the future if it continues.

Training is part of HRD. Whereas HR comes with development, its effect will be for both the employee and employer. A trained employee is going to render their service with gained new knowledge. So where does the question come to add the expenses of training in CTC?

Another question - If training cost is added in CTC but training is not provided, what will happen?

CTC implies the cost to the company per employee on the salary part, i.e., Basic, HRA, other allowances, and Bonus.

Adding gratuity in CTC is also cheating employees as gratuity is applicable after completion of five years only. So how can gratuity be added in CTC at the time of joining?

I foresee some kind of revolution in another two decades if this kind of deceitful practice continues.

SM SULTAN