Calculating Your Employee Training ROI
Return on investment tells you the percentage return you have made over a specified period as a result of investing in a training program. On the assumption that benefits will continue to accrue some time after the training, then the period that you specify is critical to the ROI figure you will obtain.
You may like to specify a period that fits in well with your organization’s planning cycle – perhaps a year or two years. On the other hand, you may wish to calculate the period to correspond to the lifetime of the benefit, in which case you will need to know how long the average trainee stays in a position in which they can continue to apply the knowledge and skills being taught.
It is relatively simple to calculate return on investment:
% ROI = (benefits / costs) x 100
Payback period
Another way at looking at ROI, is to calculate how many months it will take before the benefits of the training match the costs and the training pays for itself. This is called the payback period:
payback period = costs / monthly benefits
Payback period is a powerful measure. If the figure is relatively low – perhaps only a few months – then it makes much more sense to increase training investment. As a measure, it also has the advantage of not requiring an arbitrary benefit period to be specified.
Bottom line - employee training should be treated as any other business activity. It’s ROI should be measured so that you can allocate appropriate resources and understand the impact it can make on the future success of your company.
Posted in Plantscaping, Employee Training | Comments (0)
Related Posts:
