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The Problem of measuring ROI for Training

They say that the first things that goes in a recession, or even cut during the good times, are either Training or R&D. Probably a major reason for this is that the ROI for training (Return on Investment) can be difficult to measure.
The ROI is classically defined as being:
Return on investment = Net income / Investment

Is it possible to measure the Return on Investment for IT Training?

ROI for Training

ROI for Training

Measurement

For IT Training, why not attempt to measure the ROI by asking the delegates themselves how much time will have been saved as a result of taking the course? This could be measured as a percentage of the use of that application per day.

If the training delivered has been well received then if the delegates are asked that question then the answer can be anything from 5% up to 80 % or more. So how to translate this into a figure?

Calculation

Say that delegate called Pat has estimated that a 10% time saving has been made.
The course cost £500 for the day’s training with 8 delegates.

Therefore; £500 / 8 = 62.50 training cost per delegate

30,000 / 365 (working days p.a.) = £82.20

Total cost is 62.50 + 82.20 = £144.70

Therefore the ROI could be measured as £3,000 (10% of £30K) / £144.70 = 20.7

Conclusions

By most measures, that is a pretty good investment.

Now remember that Pat only said a 10% improvement. Usually the percentage is a lot higher.

Furthermore, even if you have an employee using the application for only 45 minutes per day, the training still pays for itself with the employee hopefully having the enjoyment and benefit of the training whilst also feeling that their employer thinks that they are worth investing in.

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