The technical author working on training courses should eventually arrive at the final stage of evaluation. They will have designed their “happy sheets”, conducted their tests. They’ll have observed the transference of learning and determined “Does it Matter?” The only thing left to do after that is to calculate the return on investment.
Here’s a simple guide as to how:
There are some few learning events where calculating a return on investment is not possible, these are usually courses you are legally obliged to run (such as Food Hygiene in a restaurant, or money laundering awareness in a bank). If your course is of a similar nature you can at least calculate the cost of NOT running the course and the value of fines, etc. that you have saved the business.
For almost all other programs, you should have business objectives for delivering the learning. These objectives should be centred on cost-benefits. So if you’re looking to improve your sales force -the measure you are looking for is the value of the increased sales. If you want to reduce the call time of customer service agents, the measure is around the additional number of calls handled per agent and worked against salary costs.
To make an effective calculation of return on investment, these measures must be identified BEFORE the program is developed. Otherwise, why are you running the learning event in the first place? If there’s no definable benefit to the business bottom line, then there can be no return on investment.
Once you have your measures developed, you need to benchmark them prior to commencing training. After all if you don’t know where you started, you can’t tell if your learning has improved that position.
After the event has finished and the skill set is fully transferred to the work environment (note: this is usually not instantaneous – you will need to provide support to facilitate this) you need to grab your measures and compare the new situation with the old.
The difference between the two gives you the “return” from the workplace. So if your sales people were making $1 million a month prior to training and are now making $1.1 million, your return is $100,000 a month or $1.2 million a year.
However this is not the return on investment. The return on investment calculation requires you to subtract the total cost of training from this figure. (This should include, vendor costs, venue costs, the wage costs of the learners, and any other associated costs).
So using the same example as above; if your course cost $200,000 to deliver – the return on investment is $1 million. But if it cost $1.5 million to deliver, you lost money. Even if your sales figures have grown, they haven’t grown enough to pay for the course itself.
ROI calculations are the most important part of evaluating your learning strategies, particularly if you are planning to run a course multiple times. Training without returns, is not a good long-term plan.
Source by Nick Kellingley