Training and Development: The Return on Investment

SHARE   |   Tuesday, 01 March 2016   |   By Isang Lekhutile

Learning is becoming an increasingly important function for all companies to develop and maintain the individual and organisation skills needed to create a competitive advantage, increase efficiencies and improve bottom–line results. As a result, the HR Practitioner and other learning executives are increasingly being called upon to play a more strategic role in organisations. But the question remains - how should the corporate learning function respond to the strategic business needs of growth, transformation and productivity. As most learning professionals have seen over the last decade, return-on-investment matters to senior executives, but only when learning professionals can prove how the initiative or training programme links to the business goals of the organisation. As Jim Kirkpatrick has written in T + D articles over the years, learning professionals  should know what kind of data they need to convince executives of a programme’s worth, prepare the data effectively, and passionately present it. Learning is the major investment to build the capacity to drive the business forward. The learning function should lead, not respond. Learning like any other function in the businesses needs to improve their productivity on an ongoing basis.

The last economic recession has put ‘value’ at the forefront of a training programme’s survival. With company departments living on limited budgets and fighting for limited resources, top-level support for programmes is vital to the success of all endeavours. Gathering comprehensive data to create a chain of evidence is the best way to demonstrate training value to stakeholders, but what data is the right data? Learning professionals can use the ADDIE (analysis, design, development, implementation, and evaluation) model to uncover an initiative’s return on expectations. Training is one of the chief methods of maintaining and improving intellectual capital, so the quality of an organisation’s training affects its value. The only way to truly know what is important is to document expectations of the programme and then measure those expectations at the completion of the event. This is the Return on Investment we talk about. The calculation of return-on-investment (ROI) in the workplace learning and development field started more than a decade ago. ROI has become a mainstream process like Six Sigma and project management. The ROI methodology is step-by-step process tool for evaluating any programme, project or initiative within any organisation (Phillips, J. J. and Phillips, P. P. (2005). ROI at Work: Best Practice Case Studies from the Real World).

Employees with access to training and development programmes have the advantage over employees in other companies who are left to seek out training opportunities on their own. The investment in training that a company makes shows the employees they are valued. The training creates a supportive workplace. Employees may gain access to training they wouldn't have otherwise known about or sought out themselves. Employees who feel appreciated and challenged through training opportunities may feel more satisfaction toward their jobs. Training helps your business run better and trained employees will be better equipped to handle customer inquiries, make a sale or use computer systems. Today's young workers want more than a pay cheque and they are geared toward seeking employment that allows them to learn new skills. Organisations are more likely to attract and keep good employees if you can offer development opportunities. Training promotes job satisfaction and nurturing employees to develop more rounded skill sets will help them contribute to the company. The more engaged and involved they are in working for your success, the better your rewards.

In conclusion, training presents a prime opportunity to expand the knowledge base of all employees, but many employers find the development opportunities expensive. Employees also miss out on work time while attending training sessions, which may delay the completion of projects. Despite the potential drawbacks, training and development provides both the company as a whole and the individual employees with benefits that make the cost and time a worthwhile investment.