ROI on TRAINING - INDIA

In India though HR is aware of the ROI process, implementation has always been a challenge.
ROI on Training is a technical HR subject. This has also been neglected in Business Schools.

Implementing the right ROI process, answers the following questions

• How can I add value to my organization?
• Can I make HR as a profit center?
• How can I implement ROI on training in my organization?
• How can training be measured?
• Can I attach a value to learning?
• How do I gain expertise in ROI calculation?
• Can I measure tangibles as well as intangibles

With reference to Indian Context following are the steps that need to be taken into account. Though Jack Philips Model is advisable

1. Pre-training analysis of participants. Where do the participants stand interms of their       understanding of the subject. Eg. If it is a Critical Thinking Training, what exactly is the HRlooking forward to in-terms of impact should be quantified.
2. Setting quantifiable objectives. Preferably objectives should not be more than three.
3. Identifying the costs/ Investments done for any training. Remember it is a big list. With minor  investments taken into consideration.
4. Analysing the costs. If it is worth that investment?
5. Data collection tools and questionnaires in place to assess the knowledge transfer.
6. Now comes the implementation.
7. Isolating the factors that may affect the post training impact.
8. Converting data into monetary value
9. Calculating ROI
10. ROI report.

Once this steps are followed it is all the more easy. Yes setting  quantifiable objectives is the KEY.  Once this is done correctly implementing ROI is all the more easy.

Challenges for implementing ROI processs

1.   Lack of awareness of ROI process

2.   Setting quantifiable objectives

3.   Management interviention

4.   Training not getting due importance

5.   Thinking shorterm

6.   HR may not be technically sound

ROI on training FAQs

Q. How will ROI benefit my organization?

Understanding the ROI processes a big eye opener as to how much we have deviated in setting training objectives in a training programme.

An ROI on Training implementation addresses the following

a.    To understand if the training is worth the investment

b.    Will be able to calculate ROI per training invested

c.    How can the training impact be measured

d.   To understand how each individual undergoing the training programme contributes to the revenue/ profits

e.    For budgeting

  Q. But are HR averse to  calculate ROI?

 Calulating ROI is a technical HR subject. ROI requires organization wide understanding. However,   once the detailed process of calculating ROI is understood it become easy

Q. Can I measure the financial implications?

Calculating ROI gives the training manager an opportunity to measure the financial value of a training programme. This helps the training manager to improve his or her credibility in the organization by being able to talk the language of line management in showing the tangible benefits of training.

Q. Is it difficult to calculate ROI?

It is not difficult, yes it is challenging. All you need to do is some form of a pre- and post measurement of performance, as well as determining all your costs as well as the financial benefits of training.

Q. Can ROI be calculated for soft skills training?

While it is certainly more difficult to calculate ROI for soft skills training than for technical or other training, it is indeed possible to calculate ROI for soft skills training. The challenge is to determine the cost items and benefits of training. The solution does not lie in the "skills", but in the outputs achieved in terms of the financial benefits as a result of the training. 

Q. Will I be able to calculate the ROI on sales training programmes?

Yes you will be easily able to do it once you follow the ROI process

Q. What kind of costs will I be able to calculate?

You will need to calculate all type of costs that go in a training programme. It is a myth that training means cost. In fact it is a great investment which reaps heavy benefits.

Q. Do  I need to know statistical concepts to understand ROI on training?

Basic statistics is required.  Concepts such as averages, standard deviation and correlations are necessary.  Also it is important to capture the correct data.

 

I am sure implementing ROI for one training (as a pilot) gives the immense confidence to implement it across the organization. For this HR needs to be technically sound....

HAPPY IMPLEMENTATION ...

Dr. Sonali Wagle