Roi Metrics For Training And Development Programs

Roi Metrics For Training And Development Programs
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In the wake of a global pandemic, many organizations and employees have experienced various challenges at their workplaces. Adapting to this changing work environment is one of the biggest challenges. While many challenges have characterized the Covid-19 era, positive developments have been occurring within businesses paving the way for transformation. New values have been adopted, workplace priorities have changed, and the status quo is also challenged. A changing labor market, skills gaps, and remote and hybrid work environments will make it more critical for organizations to prepare employees for the future.  Thus, it is imperative for organizations to invest in training and development programs so that their employees will succeed in their current roles and prepare for future ones.

As per The American Society for Training and Development report, apart from the difference in ROI margins compared to their competitors, organizations keen to invest in training and development programs also have a 218% higher revenue per employee. Since companies can witness greater profitability by upskilling and reskilling employees at a faster pace, organizations must make employee training and development- a necessity.

Indeed, training and development programs can help employees develop in their current roles or prepare them for new ones. On the other hand, every company would like to know about the ROI of such programs they create. It is difficult to determine ROI metrics for training and development. Is it possible to put a dollar value on employees with enhanced skills, better knowledge, and greater confidence?

In this article, we’ll discuss the diverse ways to calculate the ROI metric of training and development programs. But before we begin, let’s talk about the importance of training and development programs.

Why Training And Development Programs Are Important In The Post-pandemic Era?

In this post-pandemic world, most employees are interested in enhancing their skills and expect their employer to provide robust learning and development programs. In another research by TeamStage, around 86% of millennials say that they wouldn’t have quit their previous jobs if the company had provided them with skill training sessions. The research also states that more than 59% of respondents believe training and development are crucial factors to consider before applying for a specific position and job satisfaction in general. Providing training and career development options will help organizations hire and retain their best-fit employees, elevating employee experience, job satisfaction, increasing morale, enhancing employee productivity, and boosting business ROI. According to the findings of Ottawa University, employees who are actively involved and dedicated to their company will experience 41 percent lower absenteeism and 17 percent higher productivity.

What Is The ROI Of Employee Training And Development?

The ROI of training and development programs can simply be defined as its return on investment. It is an assessment of how well you are meeting your desired objectives after such career development programs. ROI is typically used to measure the cost of intervention versus its return, accounting for its training benefits relative to the money invested. ROI gets to the bottom line, measuring business results resulting from training. In short, measuring the ROI of employee training and development programs focuses on answering the following questions:

  • Are employees learning new knowledge and skills that will help them to boost their work efficacy and help companies to save costs?

  • Is it possible to measure the cost of the training and development programs against the benefits to both the employees and the companies?

  • Is your career development program meeting the expectations of your employees?

Why ROI Of Training And Development Programs Matters In The Corporate World?

Undoubtedly, continuous learning is important for every business, regardless of its size. But it is also imperative to make sure that you are getting the benefit from your employee development investment. It is important to measure the results of all initiatives. In the ever-evolving corporate world, measuring the impact and value of employee training has been a challenge due to subjective measurements. Training is hard to measure, which is one of the reasons for the problem. It's impossible to measure the ROI of employee training in a standardized way. A return on investment (ROI) can be used to explain the exact cost of a training program, compare one program against another, and help establish a training program within an organization. Assessing the effectiveness of training and its contribution to organizational success is not a simple process.

Several factors need to be considered, including the goal, employees' current knowledge, feedback, and performance results. It is also important to understand that training is not a one-time event. Learning and mastering the skills needed for growth is a continuous process that employees must go through. A November/December 2020 Training Industry Report gives us the most recent information on average training costs per employee, taking into account the effects of the pandemic and demonstrating a decline across the board. The rate of training per employee across all industries in 2020 was approximately $1,678 for organizations with 100-999 employees, $581 for organizations with 1,000-9,999 employees, and $924 for organizations with 10,000 or more employees. Thus, it is important for organizations to analyze if these expenses are a wise investment for them.

Assessing ROI Metrics of Training and Development Programs

Measuring the ROI metrics of training and development programs will be difficult. But these benchmarks can help you measure employee training effectiveness. Here are some of the best and most critical ways to measure the ROI metrics of your career development programs

  1. Greater Employee Productivity In terms of training and development, productivity should be the one most easily tied to better revenue margins: more productivity equals more output; which means your employees will complete complex projects faster (before the deadline) and more efficiently. If you use this to obtain more projects, demand higher expenditures, or continue training your employees with the extra time, that’s a perfect return on investment for your organization. Read more: How to accelerate employee productivity in a post-pandemic world?

  2. Improved Organization Reputation When an organization hires employees with greater professional skills, better work proficiency, and consistency, it will be easy for the team to finish projects smoothly. When the projects are done, clients will be happy and would prefer to work with you in the future. Happy clients often recommend your company name to other clients. This will help you get more business.

  3. Minimize Employee Turnover When employees experience encounters at the workplace and don't receive fragmented and delayed support, it often forces them to leave their organization. In most cases, employees often experience friction, incompatible skills, and a lack of communication. An efficient and robust employee training and development program will help the company resolve all these problems. When employees get the right and advanced tools will help to achieve their professional goals in a better and more effective way. This will help companies to save a good amount of money. Relevant Article: Top 10 tips to reduce employee turnover rate


We hope that this blog has succeeded in giving insight into the importance of measuring the ROI of employee training and development programs. ROI estimations might not be relevant for the vast majority of training courses. However, it can be a useful way to help a company analyze and understand if their initiatives are meeting their business goals.

Learn more about robust employee training programs.

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