Measuring Return on Training Investment

29th August 2020

A successful training program is the product of careful resource planning, budget allocation, data collection, needs analysis, and a slew of other efforts that need to be invested. All of these efforts are accumulated and implemented in order to observe a substantial rise in employee and organisational performance. That said, it is essential to study the extent to which the change in performance justifies the time and resources invested. This is when the measurement of the return on training investment comes into picture.

Return on investment or ROI could be defined as a measurable increase in skills and abilities of the staff, an increase in the company’s annual revenue, an improvement in brand image, or simply a rise in the number of trained employees. While this may sound simple, measuring the return on investment of a training program can be tricky to gauge because each company can resort to a different technique of measurement. However, some of the common approaches that can be adopted to measure training ROI are as follows:

• Engagement: The degree to which the employees are engaged with the training sessions, are participating in the discussions, sharing their insights, and actively absorbing the information shared, it means that the trainees are highly interested in the program, and are willing to consume the new learnings. When the trainees are engaged, they will be likely to employ their learnings in their respective jobs. This can facilitate a growth in performance, and revenues.
   
• Observation: For certain types of training such as those focussed on helping trainees learn to use a new machine, their activities can be closely observed to ensure if they are following the protocols and using the machine correctly. In addition, indicators such as a reduction in time consumed or errors and accidents may signal a positive outcome. While conducting the observations, the employers can maintain a thorough report or checklist to keep a track of the employees’ progress. This can be later compared to measure the return on training investment.
   
• Assessment: Carefully designed assessments can be performed after the training programs to interpret the trainees’ progress. However, whilst this might be one of the simplest methods, an employee who scores very well in the assignments may not necessarily reflect the same in their respective job roles. That way, the actual return on training investment will not be computed correctly.

In addition to measuring the return on training investment, companies also need to strive to create training programs that will lead to positive return on investment. To ensure that the return on investment is positive and the learnings are successfully applied to the job roles, the following measures need to be contemplated:

• Feedback: The trainees will successfully transfer their learnings if they receive thorough feedback in terms of how to improve their abilities, transfer their knowledge, and apply their learnings. Receiving the right degree of feedback and guidance will permit them to modulate their performances accordingly, and hence lead to a positive return on training investment.
   
• Applicability: Coupled with relevant feedback, the trainees should be exposed to tasks and sessions wherein they are encouraged to engage in practical activities that allow them to actually apply their learnings. This is better than brandishing a set of theories at the learners, and expecting them to memorise their meanings. Sessions that support practical application will inevitably guide the learners towards better performance and a positive return on training investment.
   
• Relevance: Importantly, the content covered in the training programs must be closely aligned with the company’s objectives. Otherwise, the trainees may gather new insights, but they will not obtain the scope to apply their learnings. That said, the return on training investment will be negligible. For example, when performing sales training, the emphasis should be on conveying persuasive speaking skills, and other forms of communications skills.

To sum it up, training can only be beneficial if positive returns on training investments are secured. In order to procure such positive returns, the trainers need to be well equipped, and effective. Hence, trainer training programs aimed at shaping successful trainers, supervisors, and managers into successful trainers will ultimately benefit the organisation. Since investment on training can often include a hefty sum, training the trainers is essential to justify this investment, and to also benefit the organisation in the long run.