How to measure the impact of Training Interventions (ROI)
I often get asked by my clients, “…how will we know if our training intervention was a success?” or “how do we measure training ROI?”, and these questions have caused me a great deal of anxiety for many years. Sure, we can create a programme that is aesthetically pleasing whilst still providing the learner with enough interactions to keep them engaged, but how do we measure whether a change in behaviour has actually taken place post/ as a result of the training intervention?
What quantifiable measures can we possibly use to prove that a change has occurred, and more importantly, how do we prove a financial return on investment (training ROI), to the business?
Why do we train?
In my opinion, businesses train their employees in order to make them more efficient in and effective at their jobs. In doing so, businesses are able to deliver more – in the same period of time – with the same amount of resources. When this happens, businesses essentially become more profitable. Therefore, if we conclude that training makes businesses more profitable, surely, we should look at training as having monetary value.
For the purpose of this article, I am going to use the example of a call centre. However, the same principle applies to all industries and segments within a business (you may just have to dig a little deeper in order to find data specific to your context).
Creating Measurable Goals
Let’s assume that our call centre needs to improve the call turn-around times of their employees. In other words, each agent needs to be able to take more calls in the same amount of work hours. This is the measurable goal and strategic intent of the training programme.
We, as in instructional designers, need to ask what (in the real world) our call centre agents need to know and do differently in order to improve their call handling times. This could include familiarisation with their telephony system, a deeper understanding of dealing with customer queries, and perhaps even customer service excellence skills.
Businesses train their employees in order to make them more efficient in and effective at their jobs.
Once these gaps in knowledge have been identified, the client must identify what the average number of calls being made by their employees is, per specific time period. Let’s say that the average amount of calls handled in a 21-day period is 1200 calls per agent. Brilliant, here we have our first metric.
If the gaps were identified correctly, and the skills shortages were addressed within our training programme, then surely this entails that the number of calls handled, on average, per agent should increase. Let’s say the average increases to 1350 calls per agent, per 21-day work cycle – our second metric. However, although these numbers seem great, it still does not prove a monetary training ROI, to the business.
In that case, let’s take some desk costs into account (these are costs per individual within a specific department, and within a specific role and includes everything from the department’s salary expenses, rent, utilities and stationery, to even the cost of keeping the coffee machine running). Let’s assume the desk cost per individual within the call centre is R 10 000.00 per month – this is our third metric.
We can now take the original average of calls handled (1200) and divide it by the average desk cost per employee (R10 000.00) – in this instance, this equates to R8.00. This is the cost to the business for each call that an employee makes, pre-training intervention. If we take the improved average of calls (1350) and divide it by the average desk cost per employee, the number equates to R7.40. It used to cost the organisation R8.00 per call before the agents were trained, and it now costs them R7.40 per call – after the agents received training. The cost per call has essentially reduced by R0.60, which in turn makes the business more profitable by R0.60 per call. You should now be able to see that our training programme will have had a measurable impact on the organisation’s bottom line.
A call centre example may seem easy as the output of measure is a call, but every employee gets measured against some or another deliverable. Once these deliverables are established, we can easily drill down into the measures used to assess an individual, against that deliverable.
In summary: Proving training ROI is not as impossible as we are made to believe.
All one needs to do is:
- Define a proper business goal
- Identify and address the knowledge gaps, with a solution that supports the goal
- Gather supporting data pre-and post-training intervention
- Crunch the numbers
Author: Armand Nel