Innovative Model to Calculate Return on Training Investment
I have Attached Innovative Model to Calculate Return on Training Investment
Most Companies Lack Adequate Diet of ROTI
Research indicates that the ‘transfer of learning’ from management and executive training programmes to the workplace hovers in
the pitiful range of 10-30%. Even so, the amount of resources in time and money invested in such training continues to grow. This
begs the question: are organisations addressing the issue of Return on Training Investment (ROTI) adequately? If not, why not?
Why are training investments not assessed for accountability and returns, as other investments? This question is particularly
timely for organisations in India. The market for management and executive training in India is primed for explosive growth,
propelled by the arrival of topranked institutions such as Harvard, Duke, and Wharton. Indian organisations will soon be blitzed
with marketing efforts from these top-ranked providers of executive training, and we can expect to see increasing numbers of
Indian managers and executives receiving premium-priced training from these and other institutes. The key question: Will
organisations attempt to address the issue of ROTI from these programmes? Most probably, they will not, offering the stock
argument that ROTI is a complex and nebulous idea, and that they don’t have the capability to do so. This argument has only
limited merit; even if organisations don’t have the capability to measure ROTI comprehensively, some of the steps involved could
be assessed, providing insights into the value of training programmes.
ROTI: STEPS INVOLVED
It is important to recognise that the end goal of a typical training programme is not simply learning, but rather, the application of
learning in the workplace. To understand why some managers successfully “act” on their learning after attending a programme
and why others don’t, organisations must appreciate that a training programme is part of a process, rather than a discrete event.
This process includes at least two steps before the training programme: Recognition (recognition of the need for training),
Matching (matching the right managers to the right programme), and at least three steps after the training programme:
Application (application of the learning in the workplace), Impact (assessment of the impact made by the application of the
learning), and Return (measurement of ROI based on impact to the organisation, taking into consideration all relevant costs.) The
pre-programme steps are not necessarily complex and can typically be achieved by currently available expertise in most
organisations through their HR or other relevant departments. The post-programme steps of ROTI are more involved. First, they
require managers to return from training programmes with clear “action plans” that include a schedule for applying one or more
aspects of the learning. Second, organisations need to ensure that they have access to the expertise needed to help assess
application of the learning in the workplace, and evaluate its impact so that ROTI can be addressed. For organisations that have
never addressed ROTI, enforcing all the steps could be difficult initially. However, at the very least, both pre-programme steps can
be enforced, and the first post-programme step can be checked. Most important, data collected on the first two pre-programme
steps can be tied to managers’ successful (or not so successful) application of learning in the workplace, and help shed light on
why the application of learning may vary across managers. These efforts can lay the foundation to ultimately address ROTI, and
ensure training—like other investments—is also subjected to scrutiny, and is assessed for accountability and returns.