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Ten tips to measure training ROI

24th Sep 2012
Return on investment - that most tricky of things to quantify. Alan Garvey has a few pointers for the TZ community.

If you can't prove a return on your training programme – real learning that is adopted and applied -- then you run the risk of having it cut back or even losing it. You may think that measuring ROI is hard. However, if you follow these fast, hard rules, you'll be on your way to proving your learning programme has measurable impact.

  1. You don't need to go overboard in calculating ROI - You only need to prove beyond a reasonable doubt that your programme is cost justified.
  2. Shift your thinking from a quality mindset to an impact and results mindset - ROI is more than a calculation; it's a way of thinking. Learning professionals often focus on the quality of their training rather than the impact of the learning, assuming that quality leads to learning and learning leads to impact. While quality is important, it doesn't go nearly far enough in proving that training positively impacts the business.
  3. Calculate ROI continuously so you always know how much benefit your programme is generating - There are two ways to waste training dollars – train people who don't need it or train people who don't use it. Neither of these things has to happen in your programme if you have a grip on what is working and what is not.
  4. Build your case for ROI step by step - Getting to ROI is like building a court case. You make arguments and then present facts to support them. Ultimately, these arguments and facts result in an obvious conclusion - that your training programme generates more value than it costs.
  5. The more data points you have, the better - The people who matter when it comes to making your case are typically analytical - COO and CFO types - and will likely want an explanation as to how you reached your conclusion. Validate your findings with as much data, from as many different perspectives, as possible. That means the trainees' responses immediately after the course and a couple of months after, as well as their managers'.
  6. ROI isn't just about money - Analyse results that lead to ROI across the following four levels of learning measurement: quality, effectiveness, job impact and business results.
  7. Be as conservative as possible in your ROI calculations - Self-reported scores should be factored down to compensate for bias. Additionally, you should use the delivered job impact number reported in the follow-up survey rather than what was predicted immediately after the class. Often, students are very enthusiastic about the learning right after the completion of the course, which causes bias. The follow up survey results allow for a more true measure.
  8. Know the investment outlay - Since ROI by definition is a return on investment, it stands to reason that it can’t be calculated without knowing the investment itself. First, calculate the investment: class cost added to the salary of the learning for the days within class. Then, calculate the return: multiply the average salary by the percent students said their work improved due to training.
  9. Communicate the story behind the numbers - When you're discussing your programme with stakeholders, clearly state the goals of your programme as you first envisioned it, the challenges you faced and how you overcame them to make a difference for the business.
  10. Don't be discouraged by low ROI numbers - Low ROI can be improved. Taking a proactive stance and a comprehensive view of job support and other adoption practices will get your ROI numbers where they need to be and ensure the continuation and advancement of your learning programmes.

Alan Garvey is managing director, EMEA and Asia, of ESI International. ESI have just commissioned a new research study from which these tips were taken. To request a copy please email [email protected]

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