Return On Investment (ROI) Three Words that Strike Fear in Trainers: They Don't Have to if You Have the Right Skills

Training directors don't just train anymore.  They are now also required to document and communicate in business terms the return on investment (ROI) of the dollars spent by their organization on training.  This can be an intimidating task requiring skills that not every training director has.
 
Why is documenting ROI of training programs such a hot-button with executives?  Increasingly, executives are viewing training departments as a potential value driver, with the opportunity to directly impact the bottom line.  This puts added pressure on training directors to account for every dollar spent on training and to justify this investment by the financial benefits realized as a result of their programs and courses.
 
"Accountability is a matter of growing importance in our industry," says Ann Parkman, president and founding partner of CEP.  "Training departments are being held accountable for the performance of employees and the resulting financial impact on the organization.  It's up to the training director to be able to prove the ROI of training so that executives support future programs and can understand the value of training in business terms."
 
To develop a meaningful ROI for a program, Parkman says you must first have done the appropriate data collection on baseline performance measures.  This entails first conducting an analysis to determine the true measurable outcomes the program or course is intended to provide.   The results of the analysis are then used to determine the ROI - or measurable business impact - of the effort. 
 
"Analysis and ROI are now critical skills for training directors, and both are taught in our Training Director Workshop (TDW)," says Parkman.  "The workshop is ideal for helping directors learn the skills needed to turn their departments into a valued resource that produces measurable, bottom line results."
 
According to Parkman, what's different about TDW is that participants don't just gain an understanding of analysis and ROI.  At the workshop, you actually acquire the skills to successfully do both.  In addition, Parkman notes that participants use their organization's own programs and performance problems as they learn to apply new skills.
 
"Past attendees continuously remark on how their ability to calculate the ROI of their programs has dramatically improved the effectiveness of their training departments," adds Parkman.
 
"As executives look to training and performance improvement to increase shareholder value and profits, training and HR professionals are in key positions to develop programs that generate significant ROI and turn their organization's workforce into a true competitive advantage," concludes Parkman. 

Reprinted from Performance Edge, published by The Center for Effective Performance 

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