Return on investment (ROI) is something that every organization strives to achieve. We all want to be confident that the dollars we spend on something are returning to us in some way—whether that is through the ability to complete tasks faster, draw more customers, enable more sales, or reduce costs.
Ultimately, the goal is to profit from the money spent.
This is not only the case for things like fancy equipment or automated systems. It is also true for intangible items, such as training and development. Companies want to know that the money they invest in developing their employees is going to have an impact on profit. But how exactly do you do that? How can you determine whether your training dollars are really achieving the results you had hoped for? Here are some best practices:
Start with the end in mind
Before investing in a training solution, ask this question: “What measureable aspect of the business do we want this training to impact?” Maybe it’s an increased number of sales per month, or a reduction in employee turnover, or an increased awareness of a company initiative. If you can’t clearly answer that question, you risk designing a solution that is not aligned with your business objectives. And even worse, you may not even know it’s not aligned since you don’t know what you set out to impact in the first place!
Define the metrics
The best way to assess ROI is through numbers. In order to do that, you need to know what metrics and measurements to look at in order to determine whether the training is having the desired impact. You may already have the metrics in place—you’re probably already looking at sales numbers and customer satisfaction. But if your training solution is focused on something that doesn’t already have a metric attached—such as building awareness—you’ll need to define it before you can measure it.
Establish a baseline, a goal, and a timeframe
To truly determine whether you have achieved the results you set out to achieve, you need all three of these components. Without a starting point and an end goal, you won’t know what gap you are trying to close. And establishing a timeframe for measurement can help establish trends over time, which can help to drive future decisions about training investment. As with defining the metrics, you may need to do some work to establish a baseline. But a little effort up front will enable you to assess your ROI with accuracy and certainty.
So the next time you are on the verge of launching a training solution, make sure you give some thought to how you will establish the ROI. And if you aren’t sure, push the pause button until you are. Otherwise you run the risk of implementing a fabulous solution that doesn’t get the credit it deserves.