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Return on Investment in Training

What is ROI?. A measurement toolAn evaluation approachA way of thinking... ROI . As a Research MethodologyMeasuring what Matters'Methodologies:Analytical frameworkData collection and analysisReal and immediate utility. ROI The research base. Kirkpatrick

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Return on Investment in Training

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    1. Return on Investment in Training Vocational Education Research Forum 11 June 2004

    2. What is ROI? A measurement tool An evaluation approach A way of thinking…..

    3. ROI … As a Research Methodology… ‘Measuring what Matters’ Methodologies: Analytical framework Data collection and analysis Real and immediate utility

    4. ROI – The research base Kirkpatrick & Phillips (US) NCVER research Moy, McDonald, Blandy etc NZ research Business NZ / ITF Skills & Training Survey Workbase – Voices from Management Employers’ Perspectives

    5. ROI – Getting Value from Skill Expectations What are your expectations of desired performance? Measurement What will you measure to know if you are getting performance? Performance How will you facilitate performance?

    6. How to get the most value from skill Know what you are trying to improve, and where you are now (Performance Gap) Know the existing capabilities of your people in terms of the problem or challenge Be sure training addresses the problem or challenge Address non-skill issues Measure whether there is improvement – and use this information to ensure improvement

    7. Know what you’re after What are the features of the problem or challenge? How much is it costing you or how much could be gained? How might your business or organisation be different, if you achieved your goal? What is the timeframe for improvement? What are the causes of the problem or key elements in meeting the challenge? What are the skills and practice elements of those causes?

    8. Know your people Identify what skills and capabilities your staff and management currently have in relation to the problem or challenge Identify what skills, knowledge or understanding they need in order to address the problem or challenge

    9. Ensure training is focused Ideally tailored to the specific challenges facing the organisation, and the specific needs of your people Make sure the right people are trained… Ensure there are mechanisms for assessing what learning takes place.

    10. Address non-skill issues Make sure all other business processes and issues identified are addressed Pay particular attention to your HR management, remuneration, supervision processes Ensure that relevant supervisors and managers support the training programme and (if necessary) receive complementary training

    11. Measure improvement Use the measure identified as relating to the problem or challenge Identify any other, non-training, factors that may have contributed to changes Identify any unexpected consequences from the training (positive or negative)

    12. When to assess? Before training – to see if its worth doing During training – to see if its working After training – to decide if it worked

    13. Different ways to assess value Judgment, based on evidence Staff reaction, satisfaction and planned action Skill gain Application of skill Business Results (Adapted from Kirkpatrick & Phillips)

    14. Business Results Improved quality of products and services Increased productivity and efficiency Greater customer service and satisfaction Higher sales and profitability Better personnel performance and organisational culture

    15. Benefits to Employees Improved morale and self-confidence Ability to benefit from skills in personal life (e.g. literacy, budgeting) Career development More independence

    16. Calculating ROI Total Benefits – Total Costs ROI % = ------------------------------------- Total Costs

    17. ROI is a way of thinking and a ‘research’ methodology It focuses on getting value from skill It’s about expectation, measurement and performance

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