ROI - measurable training results

Service Business

External article

Author: Marcin Pietraszek,

If you manage a company and you associate training only with costs - this is a mistake. Properly selected training can, and should become, a lucrative investment. What's more, the corporate benefits derived from it can be accurately measured.

ROI - or Return On Investment (return on investment) is an indicator that works well also in measuring the profitability of the training courses - it can be used to assess, for example, the amount of sales results that were achieved after the course in the sales department. However, is it worth using it for each conducted training?

"It would not make sense," says Dr. Małgorzata Mitoraj-Jaroszek, ROI Institute consultant in Poland. - We calculate ROI for those projects that are related to the company's strategy, with its main business goals, involving many employees of the company and, at the same time, for those that are important from the point of view of the management board. These are the key criteria. "

Therefore, appropriate preparation should be remembered above all when the undertaken development activities are to become key for specific aspects of the company.

The company comes first

It is worth remembering that a properly selected training is one that responds to the specific needs of the company. Therefore, before making a decision to conduct training, it is necessary to determine what should be improved and how we will measure the effectiveness of these activities. So it can be sales level, time, costs or quality. Such an analysis makes it possible to determine whether the training will actually improve certain aspects. If so, start by checking your employees' current performance. Only then can you begin to consider what specific training will bring the appropriate results and what needs it should respond to.

"It is very important that the management staff at every level is involved in the entire process, because the success of such a project will largely depend on them," emphasizes Małgorzata Mitoraj-Jaroszek.

After deciding whether to conduct the training, the next step should be to prepare a special schedule. It should include skills improvement goals, methods and tools for assessing their effectiveness, as well as people responsible for each stage with the assigned implementation time.

It is worth establishing methods of isolating the effects of training. It is about separating the changes that will be the result of the training from the changes resulting from other possible causes. Then it will be necessary to convert the effects of the training into financial indicators.

“The reality in companies is that most of the time things are done the other way around. Often times, training is organized first and then the question is how to measure its effects, ”says the ROI consultant. “If training and development are to support the achievement of the company's goals, it must be driven by business needs. Therefore, identifying the desired results should be the first step, ”she emphasizes.

ROI and legends

ROI is a tool around which a lot of myths and legends have arisen. The first such information says that the use of the indicator is possible only for hard training, while it is not feasible for soft training.

“The experience of the ROI Institute in the USA shows that it does not matter what the training topic is. If the business diagnosis or the company's strategy shows that training in leadership or coaching for managerial staff is needed, then the ROI can and should be measured ”, says Małgorzata Mitoraj-Jaroszek.

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Another popular opinion about ROI indicates the high cost of its application. However, the actual consideration of the return on investment study does not exceed 1-5% of the training value. In addition, costs can be minimized even more if the entire process of improving competences takes place inside the company and is conducted by its employees. An alternative is to commission the organization of training and the measurement of its return to specialists from an external company.

Training - what then?

If a decision is made to cooperate with an external company, it is worth choosing one that offers comprehensive services. Good specialists will analyze the company's training needs and at the same time propose tools for measuring effectiveness. The experience of professionals is important - the more effective training on your account, the better.

"When a company presents projects that have seen an increase in business metrics, the key question is the techniques for isolating training outcomes," notes the ROI consultant. “It seems equally important to check the coaches“ in action ”, that is, to conduct a training sample. If we are talking about large projects, it is worth doing a pilot and only after evaluating the effectiveness of the training, conduct further training, ”he suggests.

At this point, it is worth recalling that training is only an impulse to the entire process of improving qualifications. It is important that the participants can apply the new knowledge and tools in their daily work after completion. The success here largely depends on colleagues and superiors - it is the manager's responsibility to support and encourage the use of new messages. Only in this way, participation in the training will result in a real and measurable profit for the company.