How to measure the ROI of training? It is perhaps the most vital question for HR specialists. Return on Investment (ROI) is a helpful method of estimating whether a specific training course or program offered an incentive for the money injected therein. This article investigates five simple ways to measure the ROI of a training course.
- Use a Training ROI Calculator
The primary method of estimating the ROI of a training program is to use a training ROI calculator. It is a significant way of calculating the ratio of the total cost of the training program comparative to the absolute advantages of a training program. It works best for highly structured jobs where the money-related benefits are not difficult to confine.
Here is the standard ROI equation.
ROI% = (final value – initial value) / initial value × 100
- Use Supervisor Assessments
Where Training ROI calculators work incredibly for measurable net advantages, Supervisor Assessments look into specific areas, for example,
- Customer Service
- Task completion
- Skill enhancement
The senior manager will use perceptions to make informed decisions about the center manager’s presentation in those areas. One observation will occur before the training and one after. Pre-training evaluation and post-training appraisals can measure realistic ROI.
- Create an Impact Study
The third simple way of measuring ROI is to create an impact study. A ‘business impact’ is a change achieved by the training. It could be Sales, Market Share, Customer Feedback, Staff Maintenance, and more.
Impact study follows a set procedure.
- Assessment Planning
- Data Collection
- Data Analysis
- Utilize the Phillips ROI Methodology
In 1980, Jack Phillips published a 10 stage training assessment methodology called the Phillips ROI Methodology. His work depended on early work by Don Kirkpatrick “Four Levels of Training Evaluation”.
The Kirkpatrick Model includes four levels.
- Use a Training Effectiveness Measurement Platform
The fifth and ostensibly easiest method to measure the ROI of training is to utilize the effectiveness measurement platform. This devoted survey mechanizes a significant part of the work needed to conduct ROI, such as:
- Automatically emailing members with input reviews and feedback surveys
- Collecting and possessing the results
- Automating the testing cycle to measure learning
- Assisting with the observation of workplaces
- Generating reports based on members’ response