I would like to know how other companies are measuring the return on investment for training?
In 2009 we had an indepth discussion on this very topic and it makes for interresting reading. Have a look at forum above and enter ROI in the search box. This should assist in answering your question.
Measuring training success and return on investment
“The form of evaluation that we undertake is determined by the criteria we choose, or are told to use, to measure success”.
The ultimate reason for training employees should be to empower the employee while at the same time improving, productivity and profits.
This improvement should be measurable, so that an effective “Return on Investment” (ROI) can be determined.
The reason for training general employees and managers is so they will learn to do their jobs better or perhaps learn new skills or technologies that can be applied while at the same time achieving company training goals.
Sometimes workers and managers are trained to satisfy government requirements, SETA requirements, to ensure safety, or to prevent lawsuits or other forms of company losses.
In order to train staff a company must pay for the development of training material and the time spent by the trainers in the classroom.
This is either absorbed through an in-house training department, paid to outside training companies, or a combination of the two.
Obviously, if a company wants to determine their ROI for training, they must account for all the money spent, especially the hidden expenses.
At AMSI we like to consider the Return on Investment (ROI) based on the impact training will have on the individual learner and the resulting impact this will have on the company or group as a whole.
This approach if correctly applied will result in a return on capital invested
One way of measuring the success of training is the good old ‘bums on seats’ approach.
Although by no means a true measure of the effectiveness of training, learner numbers do reflect the fact that the training is addressing a need and that the design and methodology is meeting expectations.
In addition the direct costs must be considered together with the indirect costs.
In considering any proposed training companies should consider the ROI and should feel confident success can be measured on the following basis
The extent to which trainees mix and communicate: A justification often made for training, particularly group events, is that it provides an opportunity for students who work in different departments or regions to meet with each other, share experiences and make contacts.
Because this is a valued outcome of training, it needs to be considered when comparing training methods. Similarly, some training may be regarded as a perk, a benefit of some value, even if this is not directly related to learning.
Reactions: Reactions are what you measure with the ‘happy sheet’. Reactions are important because, if learners react negatively to courses, they are less likely to transfer what they learned to their work and more likely to give bad reports to their peers
Learning: Learning, in terms of new or improved skills, knowledge and attitudes, is the primary aim of a training event.
Learning can be measured objectively using a test or exam or some acceptable form of assessment.
If a learner has to achieve a certain level of learning to obtain the desired level of competency then the number of learners assessed as competent may be used as an evaluation measure.
Another important aspect of learning is the degree of retention and application – how much of the learning has stuck after the course is over and more importantly how much of what has been learned is applied.
Change in behaviour: If a student has learned something from a course, you hope that this will be reflected in their behaviour on the job. If a learner applies what they have learned appropriately, their work behaviour should meet the desired criteria.
Behaviour can be measured through observation or, in some cases, through some automated means.
To assess behaviour change requires that the measurements are taken before and after the training. Unfortunately this is not always the case.
Performance change: If, as a result of training, learners are using appropriate behaviours on the job, then you would expect that to have a positive impact on performance.
A wide variety of indicators can be employed to measure the impact of training on performance – numbers of complaints, sales made, output per hour and so on.
It is hard to be sure it was the training that made the difference without making comparisons to a control group – a group of employees who have not been through the training.
© Des Squire (Managing Member)
AMSI and ASSOCIATES cc
Thank you for this, it was before I joined but great to know that I can research past topics like this.
I really believe this is one of the most difficult things to measure because there are so mny things to take into consideration and it is so subjective.
In the end it is not only about the number of hours spent (I can sit in a workshop for an entire day thinking about the lovely lunch I'll be getting during the break) or the theoretical content of the course (many graduates have all the qualifications and understand the theory but are unable to apply this practically), it's rather about the skills that students are learning and their ability to apply this in the workplace.