5 Methods for Measuring the ROI of Training and Development Efforts
In the quest to quantify the impact of training programs, we turned to seasoned professionals for their proven strategies. From assessing knowledge retention to applying Kirkpatrick’s Model, here are the top five methods recommended by HR managers and CEOs to measure the ROI of training and development initiatives.
- Assess Knowledge Retention
- Document Employee Experiences
- Measure Time-to-Competence
- Monitor Attrition and Retention
- Apply Kirkpatrick’s Model
Assess Knowledge Retention
The most efficient method of measuring ROI is to test delegates’ knowledge several months afterward.
In an ideal world, you would create an experiment whereby delegates are randomly assigned to a training initiative or a control group, allowing you to see differences in improved performance. In practice, however, organizations aren’t trying to conduct academic research; they want to upskill their workforce. Consequently, testing the extent of their knowledge gained represents a reasonable proxy for ROI.
For training and development to work at all, knowledge must be transferred and retained, which is relatively easily tested with an assessment down the line. If knowledge is retained, then the potential for ROI is there. However, if everyone has forgotten what they learned, then you can safely write off the training initiative as ineffective.
Chloe Yarwood, HR Manager, Test Partnership
Document Employee Experiences
When measuring any return on investment, it’s easy to focus on numbers. They look neat and seem easy to comprehend.
But it’s crucial to remember that employees are people, experiencing things qualitatively more so than quantitatively. For training and development initiatives, get their lived experiences documented for a full value analysis. It’s so obvious that I felt stupid for all the times I simply forgot to ask my team members how they felt impacted by a program.
When I did poll them, I found they had striking insights on how and why a particular initiative helped or hurt their productivity and efficacy—revelations that weren’t always visible in the hard numbers.
Travis Hann, Partner, Pender & Howe
Measure Time-to-Competence
One effective method for measuring the ROI of training and development initiatives involves implementing a Time-to-Competence metric. This metric assesses how quickly employees apply newly acquired skills on the job, providing a tangible measure of the training’s impact on operational efficiency.
To calculate Time-to-Competence, establish a baseline by noting the time it takes for employees to achieve proficiency before training. Post-training, monitor the duration it takes for them to reach the desired competence level. A shorter Time-to-Competence indicates a more efficient transfer of knowledge and skills, directly correlating with increased productivity and cost savings.
This metric helps quantify the immediate impact of training and also underscores its influence on accelerating employees’ ability to contribute effectively to the organization.
Dhari Alabdulhadi, CTO and Founder, Ubuy Kuwait
Monitor Attrition and Retention
One of the easier ones tends to be looking at attrition and retention numbers after rolling out a larger L&D investment.
Capgemini, for example, rolled out a massive digital learning package at the start of COVID and saw their attrition numbers drop a remarkable degree due to the industry certifications their employees were able to get from a combination of Coursera, Pluralsight, and other online learning platforms that were part of their package. That kind of invested value always pays dividends on talent retention.
Dragos Badea, CEO, Yarooms
Apply Kirkpatrick’s Model
As a boss, it’s very important to know how much money we get from our training programs. We use Kirkpatrick’s Model, focusing on how trainees feel right after training.
We look at what they learn and the changes in behavior while working. Lastly, we analyze improvements that benefit our business directly. We add to this by using various methods, such as details on how well someone performs, questionnaires, and careful observation. For jobs without a clear structure, we use managerial evaluations.
Determining ROI involves looking at these positive and negative outcomes compared to the training costs. This comprehensive approach allows us to measure training success and make informed decisions about our future investments in workforce development.
Aldi Agaj, CEO, Alter Learning
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