As indispensable as they have turned out to be in recent years, training programs are expensive affairs. Upskilling the workforce takes a lot of time, effort, and money. From arranging experienced /qualified instructors and certified subject matter experts, and developing course content to paying for video-conferencing facilities and other equipment, any training program comes with a lot of expenses.
However, organizations are showing no signs of slowing down when it comes to spending on L&D initiatives. A new survey conducted by the Society of Human Resources found that 67% of companies have increased their L&D budget. One thing is for sure – in the post-pandemic world, training expenses are not going down anytime soon. Many experts have advised employers to view training costs as an investment rather than an unavoidable expenditure.
However, viewing the L&D function as an investment is not without its own set of challenges. Whenever the subject of investment comes in, the investor will seek profitability or tangible positive results. Employers are more ready than ever before to spend more on upskilling programs. But they also demand to see a measurable and positive impact on the employee’s productivity as well as business growth.
How to Maximize Return On Investment from Training Programs?
Set Training Objectives Straight
According to Paul Kerns, Senior Partner of UK-based consultancy Personnel Works, the first step towards ensuring effective training is to know the current and the desired performance metrics by heart. For instance – how can you know if that sales effectiveness program worked or not if you don’t have an established baseline of sales performance scores and customer service ratings?
Categorize Your Training Priorities
Paul Kerns summarizes that training can be classified into 3 types – ‘Must Have’, ‘Added Value’ and ‘Nice To Have’.
Must-Have Training is basically core-skill training. Core skills are non-negotiable qualities employees must possess to do their job. Product knowledge is an example of such a ‘must have’ skill. Knowledge of how to operate equipment is another. ‘Must have’ training also includes those demanded by law or governmental regulations such as health and safety training.
Generally, ‘Must Have’ training would not bring about a sense of business improvement as it is the bare minimum required for a business to stay afloat. However these skills are necessary if you want the company to survive, so brushing up on them is always advisable.
This is where talks of ROI or impact comes in. The only value that matters is if it has quantifiable results such as an increase in positive customer reviews, improvement in sales figures, or a decrease in work-related errors. The only question should be asked – is the training helping in any way to meet the bottom line objective of the business such as the growth of profits, improvement of employee performance, etc? Or has it made things easier for the business such as bringing about a reduction in costs?
‘Nice To Have’ Training
This category of training does not really add any value to your business as such. However, it can indirectly contribute to positive results such as employee loyalty and engagement or help you boost the employer’s reputation. Courses that focus on developing team spirit or creating a more empathetic leadership fall in this category.
Based on your business goals, you should allocate funds for each type of training. For example, if your organization is launching new products or introducing a new service, or expanding in another country it will make sense to invest primarily in ‘Must Have ’ training.
Utilize Training as a Business Strategy
Usually most employers view employee training as a remedial tool to address weaknesses/shortcomings in their team. However training have to be leverage as a business strategy just like marketing if you want to see L&D efforts translate to quantifiable results. Whether you are aiming growth of profit or improvement of brand reputation, training should always be aligned to business goals.
Invite Input from Employees
This is where employee surveys come in handy. Ask your employees what difficulties they face while performing day-to-day activities, and where they think they should improve. However, make sure that these surveys are conducted in a discreet manner without compromising the privacy of the employee.
Identify Skill Gaps
To make the most out of training programs identify the existing skill deficits in your workforce. Then you will have a good idea which set of skills you have to focus on developing.
Monitor Before & After Performance
The best indicator of training effectiveness is whether it meets performance metrics. Before the course started did you have more lukewarm to negative customer feedbacks? Is there a gradual reduction of negative reviews or a growth of positive ones? Or is your team completing tasks effectively within a shorter span of time? You have to keep an eye on the before and after scenario to determine if the training has made any difference.
Keep a track on the Learner’s Journey
A handful of highly driven employees will be genuinely invested in the training. But let’s not mince words, the vast majority of your workforce won’t be. Lack of engagement can become your #1 obstacle to getting the ROI you wanted. If your employees doesn’t take training seriously, how will they improve?
However it’s not possible to manually track how many hours each worker has invested in the training. It might pay to invest in a top-notch LMS (Learning Management System) so that you can keep a track on how much progress each employee made in the training. You will get in-depth view of important metrics of number of courses completed, assessments taken, and time spent to complete the courses etc.