Data and benchmarking are essential to proving the importance and effectiveness of training and the impact it has on a business. Without data to support claims for training return on investment, you’re just another person with an opinion.
After all, not all training will have a clear impact on the business bottom line, but that doesn’t mean it’s not worthwhile. So how do you know what return on investment means to your business, and how do you measure it?
What does ROI mean?
Understanding what return on investment means seems pretty straightforward. If you get more out than you put in, the return on investment is good. But if it cost you more than you got back, in terms of time, money or resources, then the return was poor.
However, it is important to nail down what your business is expecting to get out of training. The objectives of a two hour Microsoft Excel training session will be very different to the expected outcomes of a four week Lean Six Sigma Black Belt course.
So, before you can start to benchmark, you need to decide what kind of return on investment you want. Those that are closely linked to business goals will be more effective.
- Are you expecting bottom line savings?
- Do you want to see improved productivity, quality of output, costs or time savings?
- Perhaps you want increased skills and knowledge, or a change in attitude?
- Are you seeking changes in behaviour and the application of learning?
What do I measure?
It’s something we’ve mentioned before, but we’ll say it again. To get accurate ROI figures, you need to measure key metrics before the training is carried out, so you can create an effective comparison. So, once you’ve confirmed how you are measuring ROI, you need to collect the relevant data to create a benchmark.
What you need to measure will vary on a case by case basis. If you want to see improved productivity you need to quantify how productive the delegate is to start with. If you are looking to make cost savings, identify total expenditure.
Most training will have several key objectives, and each will require benchmarking ahead of the training sessions or courses. Without identifying your goals, you will be unable to pinpoint areas to measure and proving return on investment will be near impossible.
What’s the plan?
Once you’ve had these discussions, it is essential to put a process in place so that it happens each time. Create a step-by-step outline for the process of data collection, benchmarking and measuring ROI. It should include the following:
- State the objectives of the training / learning
- Identify measures that align with objectives
- Identify any previously used metrics and determine their suitability
- Set the timing for the data collection
- Pre-training data collection
- Post-training data collection
- Allocate responsibilities for data collection and analysis
- Identify methods to isolate effects of the learning/training from other influences
- Carry out data collection
With this plan in place, you’re better equipped to determine which training is providing the best return on investment, and identify where the failures are if ROI is lower than expected.
Want to know more? Reach out to us on Twitter or LinkedIn and we’ll try to cover your questions in our next Bite-size Business video.
Leave A Comment