To ensure an organisation is getting the most out of their employees, they must accurately evaluate how effective their training programmes are by assessing the Return on Investment (ROI).
ROI allows decision makers to see the potential benefits of an investment and to make informed business decisions. All functional areas of a business need to show how accountable they are in making bottom line contributions so Training and Development teams need to show how their training programmes are making a difference. A productive worker has an important role to play when it comes to an organisations success and managers are always looking for ways to make employees more efficient and productive. Good training is key to this and making sure organisations get the most out of the training they provide is essential.
As well as training though, there are also several other areas in the HR remit for which ROI measurement can be a useful tool:
- The correlation between staff training and employee turnover
- The savings that occur as a result of training by maintaining levels of output with less effort g. reduced duplication of effort, less time spent correcting mistakes and faster access to information.
- The increases in productivity that occur with increased output which is achieved using the same level of effort. Examples include improved methodologies reducing the effort required, higher levels of skill leading to faster work and higher levels of motivation leading to increased effort
- Cost savings in labour e.g.fewer machine breakdowns resulting in lower maintenance costs or lower staff turnover reflected in lower recruitment and training costs
- New income generated as a direct result of training e.g. a higher success rate in winning competitive pitches leading to increased sales, sales referrals made by non-sales staff and new product ideas leading to successful product launches.
In today’s cost conscious business environment, training professionals must demonstrate ROI or risk having their programmes cut. These days when every pound needs to be justified, it is critical to prove that training budgets are well spent.
Contact firstname.lastname@example.org and ask for a free copy of our New Evaluation Strategies to help you demonstrate the returns from your training.