I remembered at one discussion in 2009 with a friend of mine in overseas about measuring the return on investment in training. Back then, I was still a junior manager and doesn’t really into this matter a lot.
His organization is at the conclusion that for every dollar his organization invests in training employees, the company receives $4.53 back. Amazing!!
Needless to say, the ROI number proved that training is important, and that learning investments not only are the right thing to do for their organization, but also make strong financial sense.
One of my key insight from their ROI work was that the effects of learning on business performance are cumulative over time.
In the simplified conceptual model summarized in the figure below, the overall effect of training on the business should be the area under the line for the company that trains minus the area of that for the company that does not provide training.
In their analysis, they found that employees who took more training were more valuable overall because they had more billable hours and higher billing rates, and also stayed with the organization longer.
Now the burden is, how to keep training investments aligned with business impact and redirecting workforce investment to areas of maximum effectiveness…that will be one heck of a job!
