Train strategically to close the gap

 

“Return on investment” is a phrase that is becoming more widespread in the learning and development environment, but still many trainers shy away from the question on how to achieve return on investment in training. The complexity related to learning and development of diverse human beings has led to a myth that the investment in training cannot be measured for tangible results.Therefore, trainers would rather focus on measurable outcomes such as assessing evidence to prove competency. The question we should ask, however, is HOW can we prove an increase in the effectiveness and efficiency of people as well as in the profitability of the business. This post is an attempt to shed some light on WHY it is difficult to measure training ROI when certain conditions are not met. It also suggests a different way of looking at the place and role of training in business: Instead of looking at training and development as a separate function, we propose that training and development should be considered as being dynamically part and wholly integrated into the business.

Why it is difficult to measure training ROI in the business?

The reason for this struggle in answering this question can be summed up in three points:

(1) It is difficult for a training department to respond to such a question if there is no clear standard or expectation for measurement;

(2) It is difficult to measure ROI in the business if training interventions haven’t been planned to close known gaps in knowledge, attitudes and behaviours, and

(3) It is impossible to measure ROI if changes in performance are not measured before and after training interventions.

What this means is that ROI in training must be planned to bridge performance gaps. In the form of an equation:

Profit = performance gap analysis + focused training to fill the deficiency

The solution lies in planning 

When training is considered as integral to the business, investing in training (and other developmental interventions) is planned as part of the business’s strategy to ensure employees are capable of improving the outputs and results of their department. The question is then, who takes responsibility for ensuring ROI in training, and who is ultimately accountable?

To put the question of responsibility in context, it is helpful to look at some myths that exist around the topic of ROI in training. A survey done in 2011 by the American Society for Training and Development (ASTD) pointed to four untruths commonly believed about ROI in training:

  • The effectiveness of training is difficult to gauge due to the complexity of the various processes involved in training and the dynamic nature of human interactions.
  • Business is not interested in measuring training ROI: If managers don’t ask for it, it is not necessary to measure ROI.
  • Training interventions are effective when learning and development staff is competent.
  • Trainers should not be held accountable for results; that is line management’s task.

These misguided beliefs point to a limited view of the place and role of training in business: training is not considered as being dynamically part of the strategic direction of the business. If L&D departments and line management, together with the individual learners, plan to close known gaps in knowledge, skills and attitudes, the value and effect of training on the business would be measurable.

Who is responsible? Each person in the relationship is responsible to make sure that training provides the expected results that would make a difference in the outputs and results of each employee in his or her department or unit. Accountability cannot be laid at the door of the L&D department only. Business needs to be involved:  Management needs to know the strengths and shortcomings of each staff member and together with the staff member and the learning and development department plan for training to close knowledge and skills gaps. 

Make your workplace skills plan and skills gap analysis work for you

In a way, the South African government has made it easier for organisations to provide useful and measurable training interventions through the SAQA Act, the Skills Development Act, the Skills Development Levy Act and the Broad-based Black Economic Empowerment Act. Skills gap analyses and workplace skills plans provide the opportunity for skills development facilitators in human resource departments and line management to plan for training that makes a difference to the unit’s results, and to get a tax refund on part of the skills development levy. This, however, does not benefit the business if the levy that is refunded is ploughed back into anything but the training budget. Too many companies either don’t submit their plans and annual reports and don’t claim their part of the mandatory fund, or they misappropriate these funds through other channels.

Ask the right questions

In order to calculate a return on investment on human development interventions, the following questions need to be asked:

  1. What are the specific results you would like to see? Specific results can be quantified, for instance: I want John to sell x number of units within a specified time. Or: I want Gail to halve overtime costs in her department. Results can also be intangible, such as: I want the morale in department X to improve. The question that needs to be answered is then: How would you gauge success?
  2. What do employees know and do well, and where are the gaps in knowledge or skill? What is their attitude towards learning and how much support does the organisation provide in employees’ development? The answer to these questions most often lies in a skills needs analysis and a gap analysis.
  3. Are there standards in place to monitor, measure and evaluate changes in performance or behaviour after training? Are individuals who have been on training allowed to apply their new knowledge and skills even if practising these skills mean that production might deteriorate for a while before it improves? Are there support systems in place that would provide a safety net for employees to practise in a safe-to-fail environment? This is perhaps the one area where many companies are at fault for not providing support to newly trained learners and ensuring that newly learned skills are continuously practised and implemented. Proper support and coaching, as well as monitoring and acknowledgement of improved behaviours are crucial elements that need to be in place in any organisation that wants to measure ROI in training interventions.

Taking a business approach to ROI

Return on investment in training requires business to take a business approach to training. Return on investment on training interventions is as much the responsibility of line management as it is the responsibility of the trainer, training provider or learning and development department. This requires business to consider learning and development of staff as integral to the business’s strategy.

As in any project, planning, monitoring, measuring and evaluation should take place continuously as part of the organisation’s focus on continuous learning. Monitoring allows management of results; Measuring allows for evaluation, and together, these management activities provide the structural basis for a calculation of the return on investment on people development.

Susan Williams
Susan Williams is an independent OD-ETD practitioner, business writer and OD facilitator who focuses on organisational culture, ethics and storytelling, leadership and communication development, and analytical and complex thinking skills development. She specialises in skills training, organisational storytelling and narrative facilitation

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