Quantifying Training Results And Impact: A Guide On Training ROI
Training plays a significant role in companies these days. Organizations indeed spend much money on training, so their ROI has to be justified. Now, the focus is on the results of training. But how do you gauge the ROI of large-scale training programs?
The ROI Of Training: Measuring Training Results To Gauge Impact
ROI is very important to a company. It tells them what the results of the training program were. The Return On Investment of training is the net profit of training (the benefits minus the costs of training) divided by the costs of training. This is how the ROI is calculated. It is multiplied by 100 to get a percentage. The company must know how much it benefits from the training. So, what are the costs of sales for the company in terms of how much it spends on selling a product? When an employee is not able to perform due to lack of training, replacing them is a major cost to the company. All these estimates help a company know what the impact of training should be.
Training can't be linked to an ROI every time; this should be known by every company. For example, the intricacy of the training program decides whether its impact can be measured or not. A company can't measure the impact of a 2-year leadership program. These can be the results of training:
1. Drop In Customer Complaints
When you start initiating training in the organization, you should be ready to decide the outcome of the training and what all the stakeholders agree to. The training should be done according to this final result. It's a quantity, a number, like the percentage by which customer complaints are dropped after customer service agents are trained.
2. Increase In Sales
As far as sales records are concerned, you can also check them before and after imparting training. There are also many ways in which training can be measured. It's also about the effectiveness of learning. The participants can be asked to rate the training on a Likert scale. They can also be given tests to assess whether they have learned anything from the training. This test can be sent to them 30 to 90 days after completing their training. Such test results are helpful for the company to know whether the participants have improved in performance.
The results of the training can also be measured by checking the impact of other factors. The employees can also be asked to grade the various factors affecting their performance. Whatever the percentage grading the training, it tells a company how much employees' performance has improved due to it.
Philips's Model Of Training Evaluation
Philips's model of training evaluation is also important for measuring the effects of training. This model has five levels, which are as follows:
Level 1: Reaction
The first level is Reaction, which stands for how employees liked the training. At this level, employees can complete surveys asking how much they liked the trainer and how the content was.
Level 2: Learning
The second level is Learning, which can be gauged through the participation of employees. This can be checked through the attendance in training, whether all the employees were present or not. This level also checks whether training had the desired impact on employees and whether they learned some new skills. So, they could also be sent a survey to check whether they learned something or not.
Level 3: Application
Level three is Application which checks whether the learners have imbibed some new skills. For this, companies have to gather qualitative data, including whether the employees' work quality has improved. If it has not, it's time to change the training or make it better. Here, the company needs to analyze the reasons why training has failed.
Level 4: Impact
The fourth level is Impact, which checks whether the training had the desired impact. If any impact has occurred, which of it is due to training? There can also be some organizational factors that act as an obstacle to training being effective.
Level 5: ROI
The final level is the ROI. It measures the cost of training and the results on the business. For example, how much sales increased and how much was spent on the training. Dividing benefits by costs gives the ROI. This is how the effectiveness of training can be measured.
Obstacles To Measuring Training Results
There are many reasons due to why training ROI can't be measured:
- No collection of data
When data can't be gathered from different sources, it can cause problems for the company. The data also has to be transformed into monetary value, like how it helped in cost reduction. - There are impacts of training that can't be measured
These factors include market conditions and the culture of the organization. You can't corroborate the results of these factors with training.
