You spend a lot of money training your employees. How do you get the best possible return on training investment?
First, determine what you spend on training to calculate your return on training investment. If you pay a vendor to provide training, use the invoices as a base. If you train in-house, use payroll hours for the time spent preparing and delivering the training. Add in the payroll employees spend training and the cost of materials used. Use these expenses to figure your return on training investment.
Next, determine the value of the benefit from training to calculate your return on training investment. Increased productivity, eliminated mistakes, increased sales, fewer returns, etc. are examples of measurements that determine the benefit. Effective management reports will help to figure the return on training investment.
Use this formula to calculate your return on training investment:
Return on Training Investment (ROI) % = Benefit-Expenses/Expenses) x 100
Your return on training investment depends on five factors:
- Cut training costs to boost the return on your training investment. Consider computer-based or online learning. Use on-the-job training to save on payroll. Record training to use more than once. Be creative to cut costs and improve return on training investment.
- Maximize your return on training investment by using relevant training. Focus on specific skills and knowledge your employees need. Nothing drives down return on training investment faster than wasting time teaching unneeded skills.
- Determine your training needs to get real value from your return on training investment. Analyze gaps in what your employees know and what they still need. Look at specific tasks.
- Measure the results to improve your return on training investment. Track factors like time spent correcting errors, customer satisfaction, sales, etc. over time and compare them with before the training. Use the difference to determine the cost benefit and your return on training investment.
- Use six sigma training effectively to improve your return on training investment. The 80/20 rule states that 20% of efforts produce 80% of results. Focus on training that has the biggest impact on your company’s results and your return on training investment will improve.
Good training not only helps your return on training investment but increases productivity, improves customer satisfaction, saves time and expenses, increase sales, and makes for happier employees. Follow these simple steps and you will get more from your return on training investment.
Categories: Methodologies