From a managerial point of view, knowing the value-add or costs of any operation in business is vital.

However, when it comes to the issue of training, it is very rare to see pound signs unless they are associated with the costs of providing it.

The fact is, that to objectively measure the benefits of training you need to know what's different as a result of it happening. Without detailed pre & post-training evaluations - where both are also pragmatically related to business objectives - calculating the return on investment (ROI) is difficult, often rather subjective and not something many trainers are particularly happy with.

Probably the best way for managers to think about training is to divide it into 'Must have' and 'Might be good to have'.

'Must have' training includes things that are necessary for the employee taking it to perform their duties without breaching regulatory or legal compliance. 'Must have' also includes any training that is necessary for the employee to achieve a minimal level of acceptable functioning. So, basic induction, equipment operation, health, safety & any other regulatory compliance training falls under the banner of 'must have'.

'Might be good to have' includes just about everything else.

Splitting training into these two areas overcomes one of the main problems in establishing the true ROI or costs. 'Must have' training can be seen principally in terms of the cost or risks of non-compliance. 'Might be good to have' training can be evaluated in terms of its effectiveness in improving productivity or reducing costs. In short, 'might be good to have' training is only worth doing where there is a clear business benefit & this should ideally be expressed in £'s.

'Must have' training applied to learning to drive a car includes lots of factors. Excluding one of them - like 'how to stop' - is probably not a good idea. However, if, for example, the individual is expected to drive a vehicle with an automatic gearbox, then learning to use the clutch & a manual gearbox become 'Might be good to have'.

These 'Might be good to have' factors could give a return on investment if the individual could additionally drive other vehicles with a resultant productivity increase. If there is no benefit to the business, (s)he should not be trained.

Once training has been split into these two categories, it becomes clear that the only way to put a value on 'must have' training is theoretical. You could, for example, look at the hypothetical costs of non-compliance, of accidents or the salary of an employee unable to perform to a minimal standard.

'Must have' training is a necessity; an unavoidable overhead. The difficulty is that, beyond the obvious, few organisations really have a clear handle on where the 'Must have's' end and the 'Might be good to have's' begin. Training is all too often offered as a solution when the problem is ill-defined or it actually suggests some other solution.

Some years ago, we were approached by a manager in a multi-national which had one of its main production sites in the UK. The manager wanted us to provide what she described as 'motivational training' to a group of people on a production line.

Further questioning revealed that the underlying issue was that the staff on this line were short-term contractors, on lower pay than people on other lines and not likely to be offered further work once their contracts expired. No training was likely to bring a significant ROI in that case. (see the Info page on 'Managing Human Performance Issues' for more on judging where training is and is not appropriate)

In other situations, where training is actually appropriate, it frequently goes something like this:

Manager: "We have a problem with customer care"

Trainer: "No problem, we have a customer care course I can use off the shelf"

Clearly, we're exaggerating to make the point. But without knowing the specific problems and exactly how the proposed training will solve them, it's little different to the 'motivational training' example, above.

So, problems need to be stated clearly & considered in terms of lost business, lost productivity or other costs to the business. Benefits need to be quantified. For a new initiative, it should be related to a given business objective and clearly show what gains are expected. Ideally, these should be written down in pounds sterling and not be just impressions of what the present situation happens to be.

From these statements, training can be devised or selected to address them. This is commonly where the next pitfall arises and it is often observed in anything related to 'soft skills'.

Where training objectives are written at all, they are rarely stated in terms of standard, performance & condition. That is; What will the student be able to do that they can't do now? (Performance); To what standard will they be able to do it? (e.g. with 70% accuracy) and under what conditions will they be able to do it? (e.g. under exam conditions, using the product manual etc.)

Trainers often use 'aims' or poorly specified 'learning outcomes'. It's common to see just the performance part of 'objectives' used. Words like 'understand' creep in as a poor substitute for a performance item - and of course, true 'understanding' can't be directly measured.

Where objectives are broken down into observables, with the three component parts, they can be measured, a clear relationship to the business issue should be obvious and any improvement as a result of the training can be quantified.

Given sufficient time, the necessary research background and free access to business data, much (probably most) training can be broken down in this way.

However, some might argue that there can be intangible things improved by training. Often the 'intangibles' argument is used inappropriately - where tangible costs or benefits could have been identified.

Even with such things as customer perception or staff morale, it is feasible to do before and after measures and these can be related to business objectives. Putting a figure on them is more difficult but there is research on measuring & valuing intangibles which can be used to (arguably) lend a more objective air. (e.g. Karl Erik Sveiby, Baruch Lev)

Improvements in innovation and similar areas really are intangibles and to paraphrase Einstein, not everything that counts can be counted. However, its usually worth counting what you can.

T4B- Who are we?

• People with experience of actually working in industry
• People with a pragmatic approach to learning
• People with broad development & software solution knowledge
• People with around 20 years experience of teaching adult learners
• People dedicated to leveraging best value from Multimedia production for business and Corporate Video