The return on investment on training programs doesn’t always yield tangible and identifiable metrics, making it challenging to understand whether there’s value in training. Training requires time, budgeting, resource allocation, and other hidden costs. But the reason why organizations continue to invest in training is the knowledge that while the impact of training cannot be itemized on a financial report, the intangible value makes training worthwhile.
However, there are ways to measure the return on a training investment or return on learning (ROL) if the company is willing to collect data and apply scores to findings. Data-driven approaches can help an organization better understand how training helps achieve strategic business goals and affects the bottom line. Here are five approaches to consider:
Measuring productivity changes after completion of a training program requires historical data. Therefore, a company would have needed to collect and give numerical representations to performance and productivity pre-training. These may include metrics for attendance and output. The same KPIs should apply after the training to identify improvements. Changes in productivity metrics can then be compared to financial reports.
Measuring ROL on a micro-scale means following the progress of a specific training program for a particular goal. The micro approach may include assessment or testing to determine retention of the newly learned knowledge. Measurement scores and weightings can represent how the new skill impacts application and output.
The macro approach for calculating ROL needs to be supplemented with years of historical microdata. If the organization has been collecting ROL metrics on a micro-level for years, it will have an overall picture of the impact of training that covers a longer period. The macro approach is valuable to companies exploring major transitions, such as a digital transformation.
Increased engagement, feedback, and application lead to improved productivity. When comparing growth, leadership will also need to apply numerical scores and leverage historical data. Many companies conduct detailed assessments and interviews to document training experience, newly acquired skills, and knowledge. Learners must share how and if the training was beneficial. Other growth measurements worth analyzing include retention rates and whether training programs led to deeper loyalty and increased motivation.
Targeted skill development
Measuring ROL based on targeted skill development follows a similar approach to determining ROI. It will involve calculating the cost of the course, cost per learner, period of improved performance, and a numerical value of increased output. But most importantly, measuring targeted skill development follows the progress and effectiveness of systematic training.
Targeted skills are delivered in subsequent courses, allowing analysis following the completion of each course. One way to measure how targeted skills have developed is to assess whether there is a need for further training or the employee still relies on their supervisor to constantly coach and monitor them.
Measuring ROI and ROL will always be requirements for organizations to determine if their investments have value and business impact. For better insight, organizations need to start by assigning values to otherwise intangible benefits and continuously collect data.
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