Return on Investment (ROI)

ROI is an abbreviation for return on investment. It is a monetary indicator that shows the financial impact of your program. With ROI, you can skip lower-level evaluations of training impact like learner satisfaction and get right to the bottom line: what did we get out of this training for what we spent? ROI for training is purely a financial metric. It explains the program's benefits in relation to its costs. You can learn the value of your program to the organization in a single number.

Measurement Procedures

Once your training is in place, collect as much hard data on the training's impact as possible. Technically, you only need data on the ROI measures you're interested in, but there are three types of metrics that can help you with your calculations:

• Learning efficiency: Determine whether or not learning occurred. This is frequently accomplished through a simple assessment of learner satisfaction. At the end of the training, give learners a Likert scale and ask them to rate the extent to which they gained new knowledge or skills. You should also think about doing an assessment before and after the training.
• Following up after training: Job repercussions Send out a follow-up questionnaire to see if learners used their skills on the job. This is usually possible between 30 and 90 days after training. This allows you to see how quickly learners were able to apply their new skills—and how much they improved.
• The outcomes of business: This is the point at which the rubber meets the road. Directly observing participant behavior is the best way to measure business results from training. Collect sales records for your learners, for example, and look for a difference in their numbers before and after training. Other methods for gathering data on business outcomes include directly asking participants about outcomes in follow-up questionnaires or interviews.

Convert your findings into monetary values

Don't just wing it. Have a solid foundation for your estimate. At every stage, you should be able to provide evidence to back up your claims. Here are a few tried-and-true methods for determining the monetary value of your results:

• Use the standard values of your company: Your company almost certainly has standard values in place, such as the typical value of a sale, the typical cost to replace an employee, and so on. Calculate the monetary impact of your program using these values.
• Examine previous costs: If your company lacks standard business results values, historical data is the next best thing. In the past, how much has it typically cost to resolve a customer complaint? How much does it cost to replace a company employee who leaves? When you look at company analytics, you can usually get a good approximation.
• Consult an expert: If none of these steps are feasible, consider hiring an expert to assist you in estimating the monetary value of your outcomes. Work with someone credible who has authority in the field you're working in. Take the time to educate them on your project and the desired business outcomes.

Now it's your turn, and We Can Help

Calculating the ROI of training may appear difficult, but it can be surprisingly simple. When you demonstrate a solid return, your leadership will begin to regard your training program as a valuable asset! Plan ahead of time for the desired outcomes, collect as much data as possible to demonstrate the impact of the training, and use a credible standard to convert your results into a monetary value. Our Measuring and Maximizing ROI training program and program can be of great help to you