Transforming the Training Dept from a Cost Center to an Investment Partner
Last week we discussed how training programs that establish a clear evaluation strategy have the best opportunity to demonstrate a return on their investment (ROI). To recap, we identified 3 critical steps for establishing a plan that connects the success of a training initiative to a demonstrable ROI:
Step 1: Calibrate the evaluation
Step 2: Isolate the effects of the training
Step 3: Effective communication helps overcome roadblocks
If you are not proactively evaluating a training program, it will be nearly impossible to measure its effectiveness and link outcomes to organizational value after the fact. Let’s look at a simple example of an organization that wants to increase meeting efficiency and determine how each level of evaluation can drive success using the ROI model.
Planning for ROI
The finance team at a large multinational company has determined that the company is spending $100,000 per month on meetings. The team is concerned that some of these meetings may be excessive and unproductive. The executive team has tasked the L&D team with launching a series of training workshops to reduce ineffective meetings.
Any successful evaluation of a training program starts before the training begins. Never underestimate the importance of defining the program’s objectives. This will ultimately become your roadmap to determining business impact and ROI. Let’s take a look at examples of possible objectives the L&D team could assign to each level of evaluation of these workshops:
Level 1: Reaction Objectives
- Program receives a favorable rating of 85% from participants.
- Content relevant to job
- Training content can be applied immediately following workshop
Level 2: Learning Objectives
During the workshop, participants will:
- Develop a meeting profile
- Develop a standard meeting agenda
- Be intentional about who is invited to meetings
Level 3: Application Objectives
Upon returning to job, participants will:
- Develop a detailed agenda outline
- Establish meeting ground rules at the beginning of all meetings
- Follow up on meeting action items within three days of all meetings
Level 4: Business Impact Objectives
Three months after training program, there will be a reduction in costs due to time in meetings as measured by:
- Reduced number of meetings
- Reduced number of people in meetings
- Reduced length of meetings
Level 5: ROI Objective
- Achieve an ROI of 25%
Aligning Objectives to Evaluation
Now that possible objectives have been identified for each level, the next step is to determine the level they want to evaluate the workshops at. It may be tempting to want to measure every training program at level 5. But that’s not always necessary. Why? It all depends on the business objectives that are driving the need for training in the first place. The main questions related to any attempts at ROI are:
- What are we trying to measure?
- What is the purpose?
- Why does it matter?
The answers to these questions will help guide the team’s decision on the appropriate level for measuring the program. It’s critical that the L&D team communicate this level of expectation with the executive team so that all involved understand what a successful outcome looks like.
In our scenario, the L&D team has reviewed the objectives from the finance team and has decided to evaluate their workshops at Level 5. They believe the training program can achieve an ROI of 25%. The graphic below shows the funnel of training needs and evaluation at each level of a workshop series designed to improve meeting effectiveness.
Once planning was complete, the L&D team implemented the Meeting Effectiveness Training Program in a system-wide manner. Over a 4 week period, the entire organization had completed the two day workshop program.
The finance team looked at spending 3 months after the training workshops and found the cost of meetings had decreased by $25,000 per month. Using a gathering input method to isolate the benefits, the training manager attributed $20,000 to a direct outcome of the training ($5,000 was from influences outside the program). The fully-funded cost of the training was $15,000. With this information, the ROI of the Meeting Effectiveness Training Workshops can be determined:
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