How to Measure Return on Investment (ROI) for Training Courses

How do you measure the results and value of training? There have been many studies to measure the amount people retain during a knowledge based training course and there was a myth that only 10% of training is transferred to the job! With beliefs like these being talked about in the workplace, no wonder training is the first to be ditched when times are tough. Its often seen as a ‘nice to have' and a way to show we value our staff development but perhaps its more of a ‘perk' to help retain employees and good P/r for organisations rather than valued for increasing employee effectiveness and therefore productivity.

Clarifying End Goal and Measurements of Successful Training

In my view all training and coaching should be mapped to the bottom line. Although this process of estimating increased productivity through training is not an exact science, it is a valuable exercise to go through as it clarifies the end goal that the organisation sets out to achieve through a specific training course. It will also set up a way of measuring the success of a training programme.

In order to measure ROI we need to ask a series of questions like;

What is it that we want our staff to do that they are not doing now as a result of this training?

So will their new behaviour set of a series of events within the organisation that eventually leads to increased turnover of decreased cost? (This can be mapped in a flow diagram with estimated effects clearly shown e.g. the % increases or decreases)

How can we measure the % of increase or decrease in our business processes?

What are our current measurements of performance? i.e. what level of effectiveness do we have prior to the training?

What is the monetary value if we achieve the increased effectiveness that we desire through training? (This is then the value of the Training Course)

The Purpose of All Training is the Change Behaviour

Types of training vary from providing new technical knowledge to employees to training employees in softer skills. However the purpose of all training must be to enable the employee to act in a different way. The measurement of training has to be at the behavioural level because it is only through individual changes in behaviour that we can make an impact on the financial state of the business.

Value of Good Leadership

Softer skills and especially leadership development are harder to measure because the effects are wide and varied. Good or Bad Leadership could almost be said to have an effect on every aspect of the financial status of the business with the CEO and Directors' behaviour and ability to lead cohesively, being the linchpin of success or failure of organisations.

Rebecca Watson is an associate of Brompton Associates and specialises in Organisational Development and Change. She has worked with a wide variety of organisations and leaders to empower them to deliver through high performing teams.