Not Measuring ROI for Training? Then Don't Bother With the Investment
Companies invest a significant amount of money and time on training and development programs and yet fail to adequately measure it's effectiveness. This article discusses the benefits of measuring ROI on training and development initiatives.
Training and Development is a process that every organization has to setup to streamline the expectations of the management and the output expected from the employees. To conduct the program a significant amount of monetary investment and human resources is made by the company to conduct the training sessions. Also, depending on the new strategies that are planned by the management, newer training and development programs have to be developed and planned. It is essential that every company has a good training and development program so that the right output is delivered by the employees to the management.
Background of Training & Development
There are various organizations in the field of training and development. ASTD is one of the most well-known and respected companies and have been there for the past 70 years. It helps companies determine the training courses and the training process that needs to be set by the company to meet its own benchmarks. The training program ensures that the quality and performance criteria are met by individuals. It also helps employees understand the new processes or goals that have been set by the management and ensure that the objectives are met by them. The aim of training and development programs is to gauge the ability of the employees and assess their performance on a periodic basis. Return of Investment (ROI) can be measured once the programs have been conducted over a certain period of time.
What is ROI in Training & Development
ASTD has been involved in this field for the past 70 years and were the pioneers to come up with the ROI in training and development. According to the system put in place by Donald Kirkpatrick the training programs are evaluated at four levels, i.e., reaction, learning, behavior and results.
Reaction Evaluation: This is the initial feedback that is obtained from the training batch where they assess the course and highlight the problems they faced.Learning Evaluation: This is done by assessing the training batch through tests and other similar evaluations to understand measure the training program has helped them.Behavior Evaluation: This is a very broad evaluation that is made on the basis of the implementation of the training by each trainee and assessing whether his performance has improvedResults Evaluation: This a holistic evaluation of the whole program, and assessing whether it has resulted in any positives for the team, department, management, company, etc.How is ROI measured?
The evaluation of the training and development program is important and is a good way for the company to get feedback from its own employees. Nevertheless, just as implementing the training program is time-consuming and takes significant investment from the company, the evaluation at the end of the program takes long. Hence, measurement of ROI in training and development is not done by most companies. The general reasons that can be enlisted are as follows:
The evaluation requires more resources and time from the training department, and especially in a large organization with continuous training batches it gets cumbersome to evaluate the program after every batch. The fear that the evaluation will be counter-productive makes it all the more unattractive for the training department. Fortunately, there is a scientific method to evaluate ROI, it is a ratio of the net cost to the company to the initial cost incurred in implementing the program.
The Benefits of Measuring ROI
The measurement of ROI is a very effective way for the company to understand the investment it needs to make to get quality output from its own employees. The measurement also helps evaluate effectiveness of the various strategies that are being implemented to create the training program. The evaluation of ROI helps to understand the resources that need to be allocated for the programs and hence, the amount of time spent in implementing the program. To measure the benefits for ROI, it is important to calculate the cost benefit that has been realized through the new trainees. The ROI measurement will help assess the performance of the training department and chart the course for better training programs in future. The most important aspect of measuring ROI is that it creates a sense of accountability and responsibility in the training department and the trainees and encourages them to perform to the best of their abilities.
Ravinder Tulsiani - Certified Training & Development Professional
To develop a training and development program according to the needs to the company, it needs the inputs from a person with experience in the training and development field. Ravinder Tulsiani has worked at multiple designations in his career and has had experience with a diverse set of industries. He has consulted companies at various levels and helps them develop a good sales strategy, service, and increase the brand recognition of the company. He plays the role of a troubleshooter and bridges the gap between the management and the investors of the company. His expertise in the training and development field is reflected in the programs that he helps design for his clientele, which include large industries and smaller companies too.
Hence, measuring ROI in training and development is very essential to assess the performance of the training program and the training department. It also helps the company evaluate performance of its employees at various levels and in the end helps the company realize the actual cost it has to incur to obtain the desired output with profitability.
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ABOUT THE AUTHOR
Ravinder Tulsiani is a Senior Learning and Development Professional at Training EDGE. He is a strategic planner who creates cultural transformation in your business with a focus on educating and motivating the workforce to achieve business objectives. For details, visit: http://www.training-edge.ca