Measuring Your Training Return on Investment (ROI)

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How do you know our training is working? How do you know your investment is given positive returns? How do you know you are getting value for your dollar? Quite frankly if you are asking yourself these questions you are more than likely not getting a return on your training investment.
Why? Because if you are conducting training as some knee jerk reaction to a survey, or incident like a workplace accident, or some other typical workplace nuance then you are just throwing your profits down the drain.
Knee jerk reaction training is just a quick fix management feel good action to get over a company 'speed bump' towards continuous expansion driven by shareholders seeking maximum return on their investment.
The irony is that ploughing money in this type of training is effectively reducing shareholder value.
We should never engage in training unless we are going to have a measured return.
We do not invest in capital equipment, acquisitions, product research without conducting significant analysis on the returns that investment will have.
Why should training, or more broadly, investment in people be any different? Following a few simple guidelines a company can ensure their training is a measured success, or not.
1.
A strategic plan, with any accompanying operational plan, needs to be instituted in order to give your training direction.
What training needs to be implemented in the company to achieve our strategic direction? 2.
Align your critical success factors with key deliverables in operational, financial, support, and human resources areas.
Your critical success factors are your 'dashboard' indicating your progression towards your strategic goals.
3.
Institute identified behaviors which are critical to the success of achieving the identified strategic goals.
The culture and associated behaviors are the underlying principle of achieving your desired strategic outcomes.
Behaviors will drive and reinforce the culture to achieve success.
It is the essence of your success that you identify and reinforce that which is time honored and forward thinking.
Be this leadership, commitment, innovation, looking after your mate, communication, integrity, or honesty etc.
Identify those that employees can relate to then reinforce them, drive them, model them, and champion them.
4.
Measure, review, and revise your planning.
Finally once all these are in place set in place your measurement criteria.
Forget the happy sheets handed out at the end of each training session; they are just a quick fix for the facilitator to get excited about.
Before commencing a training program there needs to be a distinct reason for the training and a plan for the collection of the data used to evaluate the training.
This could simply be an increase in sales, increased production, decreased overtime, or absenteeism to name a few.
Followed simply by a simple trend line analysis and changes to the trend line at the point of training is the basic measure.
Overlay this with the cost of the training (facilitation costs, attendees time, etc) and a basic ROI can be developed.
More detailed measures of success in your training programs will be contribution to EBIT change, measuring the return on your Human Resources, and productivity improvements.
But above all; are you achieving your strategic goals, and have your critical success factors been achieved.
If these have not been successful then your training ROI has not been achieved and you need to review and revise.
If your training is not showing a positive ROI somewhere in the company's financial statements you are wasting your money.
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