How to measure the ROI of employee training

The cost of employee training and upskilling is a significant line item in almost every company’s budget. Businesses in the U.S. spent more than $70 billion in 2016 on employee training initiatives alone, not to mention the costs associated with taking employees away from their usual duties.

With budgets of up to $13 million for large companies, it’s important for employers to know they’re getting a good return on their investment. And as costs rise and the pressure to upskill increases, measuring the effectiveness of training will be more important than ever.

Who are employers teaching?
In its 2016 Training Industry Report, noted that employers’ expense per learner ranges from as low as $379 in large companies to $1,052.00 in small firms. On average, employees received 43.8 hours of training in 2016, with non-exempt workers receiving 40% of the training. Thirty percent went to exempt non-managers, followed by managers and then executives.

Measuring effectiveness
As with all initiatives, results matter. But for employee training, measuring impact and outcomes can be difficult. For some learning programs, results are clear and visible; an employee becomes able to use the necessary equipment, for example. For others, like customer care, results may be more subtle.

“An organization’s ability to measure the impact and subsequent value of learning activities has been a historical challenge for many reasons,” says JD Dillon, principal learning strategist for Axonify. “Traditional measurements can be subjective and may be limited to a specific moment — like the end of the training session. Surveys often don’t paint a complete picture or measure change over time.”

But no one single measurement can do it. Employers need to be ready to consistently gather data from multiple points to “paint the full picture of learning impact,” Dillon told HR Dive. He suggests that data include content consumption, current knowledge, behavior observation, employee feedback and performance results.

“By analyzing this data,” Dillon says, ”an organization can validate the sustained impact learning is having on the business and its employees. Rather than guess at the impact a training program had six months ago, you can verify the impact of training right now.”

There are, of course, some widely used evaluation models. According to John R. Mattox II, managing consultant at Gartner, these include Kirkpatrick’s Four Levels of Evaluation, Phillips ROI Methodology and Bersin’s Impact Measurement Framework.


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