The Return on Your Investment admin September 5, 2010

The Return on Your Investment

A note to the business

Your business is there primarily to make money.

Of course, there are other reasons, but unless it makes money it simply wont stay in existence. That is the bottom line.

So we realise that any project you undertake must have a positive return on its investment. And this includes training.

Good training brings so many other benefits to its delegates and the people they work with, but it still absolutely has to measurably pay for itself.

Research on ROI on training

It is notoriously difficult to isolate the measurable impacts of training, so many other factors need to be filtered out. But there have been several large-scale studies that have attempted to do this

For example:

  • the Australian National Centre For Vocational Education Research found ‘the return on investment from training ranged from 30 per cent to 7000 per cent.’
  • the Australian Office of Training and Further Education (OTFE) found training to be the single biggest indicator of future productivity and profitability improvement – “Benefits to employers from an investment in training: literature review”, OTFE, Melbourne, 1998.
  • the London School of Economics found return on investment in HRM policies to be 8 times that of business strategy – Centre for Economic Performance, LSE, 1996-97 Annual Review, pp 5-7


Talking the F.D.’s language

So if the training programme is relevant and you do the ROI calculations properly, you should be able to build a strong business case. This is the language that will work on the F.D. and anyone in the organisation with a commercial awareness. It is crucial to do a proper cost-benefit analysis.

How do you measure ROI?

Some areas of the business are easier than others to isolate the impact of a training programme but it can still be difficult to separate out the different factors. Suffice to say, the more measurable the output of a given function, the easier it is to measure impact.

But we will help you build the case. We will work with you to help identify the measurable business results you want to see (kpi’s, end-of-year objectives, targets etc) and we will design the training programme specifically to reach these ends.

More work to come here

This is just a taster, we just wanted to let you know how important it is to us that you get a measurably positive Return On Investment. By putting this as one of our very first articles  we want to show how important it is to us that the training or coaching programme helps you achieve your business objectives.

Over the coming months, come back here and you can expect to see more articles on academic research and best practice on ROI measurement and how we can apply these to get you your business goals.

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