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Channel Matters Blog > March 2011 > The ROA and ROI of Training

The ROA and ROI of Training

by William Vanderbilt
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As signs of an economic recovery start to emerge in the U.S, some companies are beginning to make careful investments in high priority areas of business.  In hopes that they can get a head start on the competition they are investing in their people. And why not? In many organizations, people are the most valuable asset; their collective knowledge, experience, skills and behaviors are often what sets the best companies ahead of the rest.  So what can you do to get the greatest return on your (workforce) asset (ROA) or your investment (ROI)?

To really improve the value of the asset called "the workforce", more than just a training event is typcally required.  In fact, organizations aren't really interested in training, they are interested in results.  Training of staff is merely believed to be a means to achieve improved business results.  There is good reason to leverage training for this purpose.  For all of history, training has produced results, just not always to the same degree of effectiveness.

If you are considering training, I suggest you think about it in terms of a means to improve business results.  The Kirkpatrick model is an established measurement system that you may want to use when you think about investing in your people:

  • Satisfaction: What was the reaction of students to the training?  Were they happy ?  Were they comfortable?  Did they laugh?  Did they enjoy the training?
  • Knowledge: Did the students learn what they were supposed to learn?  Are they smarter as a result of the training?  Did knowledge get transferred properly?
  • Application/Behavior: Do students act differently when they return to their job?  What behavioral changes were established as a result of the training?  Is the information from the training applied into the job?
  • Results: Does the company ultimately see improvements in metrics such as revenue, profitability, sales cycles, costs, inventory and more?

It's not always possible to make exact connections between a training program/process and each of these measurements, but they should be considered whenever developing and delivering training programs.

If you asked the people that pay for training what they think, they would probably say that it is all about the business results. None of the other levels of measurement in this system matter.  I agree to a point, but I think the other levels do matter.  I think people that enjoy training are more motivated and loyal.  I think people like to learn new ideas, skills and concepts. When they feel as though they are growing and gaining knowledge, I think people put more into their job.  And bluntly, I don't think there are likely to be incremental improvements in business results if behaviors aren't changed.  After all, we have to do something different if we want to see different outcomes.

In summary, I suggest you consider training programs and processes that satisfy students, make them smarter and cause them to behave differently.  If you do all that can be reasonably done to positively affect those three areas, you have probably done at least most of what you can do to drive business results through training.  Then, the only question left is could you produce a better return by investing in something other than your people?

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