Over my years of experience in the training world, I have heard increasing interest in evaluating the return on investment (ROI) of training. Although there has been buzz about this topic, Canadian organizations often do not measure the impact of their training investments. A 2007 article cites a report released by the Canadian Council on Learning’s Work and Learning Knowledge Centre on this issue (Connecting the Dots: Linking Training Investments to Business Outcomes and the Economy). The article also quotes the report’s author Allen Bailey’s estimate that merely 60 to 70 Canadian companies conduct assessments on the ROI of workplace training.
In my opinion, there are several reasons why organizations do not evaluate training ROI:
- Training is often haphazardly planned instead of being structured on analyzing gaps in job performance, which is linked to business results.
What inadequacies in employee skills directly cause low productivity, inefficient operations, quality issues, or customer complaints?
It makes no sense to invest time and energy into measuring training ROI if clear performance objectives are not established up front.
- The training design and delivery approach may be ineffective in enabling learners to meet the desired learning objectives.
Do the training content and delivery address the specific areas for improvement identified in the gap analysis?
Is there an individual skills assessment of learners prior to training?
Are training modules customized to the learners’ varying skill levels?
For example, if an organization wants to improve their employees’ word processing skills, offering a two-hour informational session on the software’s features and functions is unlikely to achieve the intended results. The training must identify the specific performance outcomes. The course must be designed to give learners sufficient information, practice and support in order to effectively learn and apply their new skills.
Without appropriate training geared towards expected outcomes, measuring ROI is money down the drain.
- Many training ROI models are just too complicated to be incorporated into the time-crunched agendas of organizations today.
I believe it makes sense to change the emphasis from measuring training ROI to ensuring a positive training ROI. This subtle shift puts the emphasis up front, where it needs to be.
- The most efficient and effective way to get a positive return on training investment is to accurately determine the specific performance outcomes that drive business results. This is achieved by identifying the job competencies of employees that lead to exemplary performance. Job competencies should further be defined in sufficient detail to illustrate the expected achievement levels of employees.
- Skills profiles* (and performance appraisals) are the basis for identifying employee performance gaps. You must decide if the revealed performance gaps can be bridged by training. If so, these performance gaps become the foundation for training development and delivery.
- The real test of the value of the training depends on post-training employee performance. Equally important is the alignment of job performance with business goals. Training is effective if the knowledge gained and skills learned are transferred over to the workplace and applied to actual tasks on the job.
– As a result of the training, do employees demonstrate a marked improvement in their performance with lasting effects?
– Are employees achieving the level of competencies identified as critical to boost the organization’s output?
– Is there ongoing support in real time and continuing assessment (e.g., coaching, observation with immediate feedback, performance review, follow-up or higher-level training) to monitor and sustain the desired performance levels for the long haul?
The bottom line of positive ROI on training is simply this: The training should have significant, measurable impacts on an organization’s productivity and profitability over the long term.
*A skills profile is a useful tool that describes core and technical skills required for a specific occupation. As an example, TCG has worked with BioTalent Canada on a number of projects, conducting gap analyses and completing skills profiles for biotech occupations. Check out sample skills profiles with tasks checklists at www.biotalent.ca.