There’s no doubt that employee training is a worthwhile investment. A 2013 study by the American Society of Training and Development found that top-performing companies provided nearly twice the training of other companies; on average, companies offered employees about 30 hours of training each year, with the highest performers averaging almost 58 hours of training annually.
So what are the benefits of all of that time spent in the classroom or at the computer terminal? Supporters list many benefits, but among the most commonly reported include:
- Increased productivity. Well-trained employees are 23 percent more productive overall than undertrained employees, because they spend less time “figuring things out” or correcting mistakes.
- Better products.
- Less turnover disruption. When all employees in a particular department have the same training, the departure of one key person leaving isn’t devastating.
- More effective recruiting of top talent.
- Safer workplaces.
These are just a few of the benefits of investing in employee training, and clearly, the investment is worthwhile. But how do you improve your training program — and why should you increase your training investment this year?
Calculating ROI
Sometimes, your training needs are obvious: You’ve invested in new tools or equipment and need individuals knowledgeable in their operation, or you’ve identified gaps in staff knowledge that need to be filled. But even experienced, knowledgeable employees can always improve, and identifying the best training programs for them isn’t always such an easy job.
Not to mention, training can be costly. While self-directed or online training help keep training costs in check, they still require an investment of both time and money. Therefore, it’s important to gauge the ROI of any training program.
When determining the value of a training program, consider several points:
- The cost of the program. Depending on your needs, you may need to develop your own training program, or you can work with a global business solutions firm to customize existing products to fulfill your needs. In either case, you need to consider the costs of the personnel needed to develop the program, any costs associated with gathering content, and the costs for any technology necessary to develop and/or deliver the training.
- Time costs. Training takes personnel away from their regular duties anywhere from a few hours to a few weeks. Calculate the costs of these absences, and their potential effect on productivity, while considering that a short absence now can reap greater returns later.
- Technology costs. Not only is it important to consider the technology costs in developing a training program, but also the technology costs of delivering that program. This is particularly relevant in online training, which may require an investment in certain infrastructure and tools to work properly.
- One major appeal of online training is that it eliminates the need for employees to travel. If travel is required, though, you must consider this expense in your calculations.
As with any ROI calculation, though, you need to consider these costs in light of what you hope to gain — and when it comes to training, there are significant gains.
Selecting a Training Program
Once you’ve determined your training needs, and set a budget, you’ll need to select a training program. Even if cost is a major factor, don’t shop based on budget alone. The cheapest solution may not be the best solution, and if you have to re-train employees, you haven’t saved anything at all.
All of your training efforts should be strategic; that is, they should be tied to specific goals and have measurable results. Begin by conducting a needs assessment of sorts. Gauge your current performance against your goals, and in areas where there are shortfalls, dig deeper to identify causes. Lack of training isn’t always the reason that your company fails to hit its targets, so taking the time to investigate the reasons for lower-than-expected performance can identify other areas that need to be fixed, or the areas where employees need to be trained.
A feedback and evaluation system is also vital to the success of any training program. Seeking feedback from trainees about the value of training programs, and their perception of strengths and weaknesses, can help identify areas for future training. However, such evaluation should not be just a one-time event. Ongoing evaluation of the results of training will provide insights into the success of a program, and the need for future training.
Some experts claim that you cannot overinvest in training, and that every penny and every minute spent on training can benefit your business. However, when you take time to calculate potential ROI on a training program, it’s almost certain that you will see a positive return, in 2016 and beyond.
