Calculating Return on Investment (ROI) is no easy feat for most any project. And, measuring the ROI for your training programs is no exception.
Sometimes organizations will ask a trainer to calculate the ROI of a training initiative to justify a training budget. In this case, the benefit may need to be estimated if actual data is not available. Calculating ROI can also help training and development professionals recognize areas where they can streamline their efforts. This allows them to present a more cost-effective solution that is more likely to get stakeholder buy in.
Jack Phillips is founder and CEO of the ROI Institute, Inc., a research, benchmarking and consulting organization. Phillips developed the ROI Methodology™, a critical tool he has used for measuring and evaluating programs such as training, human resources, technology and quality programs and initiatives. Follow Jack on LinkedIn, Facebook, Twitter, Google+, or YouTube.
Learning professionals spend a considerable amount of time trying to convince management that the training ideas we have are worth doing. Whether it is that new conflict management training or switching to e-learning for the first time, we too often run up against blank stares or direct rejections. We know our ideas will make things better, but often have a hard time convincing others.
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For as long as Return on Investment, or ROI, has been a prevalent concept in business, it's also been a fixture of workplace learning and performance. But no longer a welcome one. What started as a concept that had value -- namely, the need for the work of trainers to be more linked to business performance -- has in many ways devolved into something more dangerous -- a cliché. Here's a look at the reasons why, and how training and learning in the workplace truly ought to be measured.
Although many learning professionals talk about the importance of conducting return on investment (ROI) analysis of training programs, few actually do it. Many reasons are given for not conducting this level of analysis. One reason is that time and resources are limited and learning professionals have many other programs to deliver. Fair enough. However, the question is not whether an ROI analysis should be conducted, but how time and resources can be freed up so it can be done.