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How to calculate training ROI

Published on Saturday, 02 May 2015
Fiona Yung
Executive Director, Tricor Executive Resources

If people are a company's greatest assets, then training should be viewed as an important investment and not just an additional expense. In a company where training is provided, you will want to know if it was worth the time and money spent on it.

Training can, and should, improve the performance and profitability of an organisation; but we also need to measure its effectiveness.

In a training evaluation model, there are four basic levels - reaction, learning, behaviour, and results. Reaction measures how the participants responded to the training - what they thought about the topic, trainer, presentation, materials and venue.

Learning measures their new or improved skills, enhanced knowledge and attitudes, and what they have learned, or have not learned - which can be improved in future training sessions.

Behaviour measures how the trainees apply what they have learnt to their jobs. But if behaviour does not change, it does not necessarily mean a trainee has not learnt from the training, as conditions or timing may not have been favourable.

Lastly, you can analyse the results from the various outcomes of the training. These can include increasing staff retention, increasing sales, improving productivity, enhancing morale, reducing waste, increasing customer satisfaction, and reducing staff and customer complaints.

Return on investment is calculated to justify further investment in training or to measure the extent to which the training achieved a desired return. However, certain aspects cannot be measured, such as whether the participants' personal development objectives were achieved.

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