It’s one of the toughest challenges facing learning and development managers – measuring the value of soft skills training.
Measuring the return on investment (RoI) on hard skills training is hard enough, but what about calculating the RoI on communications training and other softer skills? Tracking and measuring the effectiveness of this type of training is notoriously difficult and is a challenge many training and learning and development managers shy away from.
But the advantages of measuring RoI on softer skills go further than justifying training spend.
By taking the time to analyse how different training methods are impacting the business’ bottom line, it can give trainers insight into their own effectiveness and provide useful signposts to develop learning techniques and to work more efficiently.
The first step is to acknowledge that all skills – no matter how soft – have a clear purpose and will impact a business ina specific way.“All training is done to achieve some kind of benefit, even if it is as mundane as morale boosting,” says Andrew Mayo, director of Mayo Learning International. “The question is what benefits did it achieve and were these justified by the cost? If there is no measuring system for the benefits – such as morale – we will not be able to tell.”
Key performance indicators
So the best place to start is identifying key performance indicators (KPIs). But then what?
“Starting with the KPI, identify the key activities thathave to happen for successful achievement of the measure and for each activity, identify the competency requirements, especially those with most leverage over the outcome,” says Tony Dunk, principalof HR consultancy CDA’s training and development business.
For example, the KPI might be a customer retention measure, where one contributing activity is to reduce customer losses by dealing with complaints effectively, so a key soft skill is dealing with angry customers. In this case, Dunk says that we can measure the customer losses both before and after the ‘dealing with angry customers’ training, quantify the improvement, and set it against the cost of the training.
“Where it is difficult is to take a generic training programme on handling difficult customers, and answer the question ‘what is the RoI for the programme’ when it isn’t within the context of a specific KPI,” says Dunk.
“This is why training departments often find it difficult to establish RoI for their curricula, because their needs analysis often drives generic development across the organisation, without a real understanding of the financial need being addressed in specific areas of the business. That and the fact that they only tend to do it when the budget comes under scrutiny.”
Donald Taylor is strategic alliances director at management software company InfoBasis and chairman of the Learning Technologies conference. He says that when calculating the RoI on any training, results need to focus on core areas such as productivity, morale and staff turnover,whichare in line with business needs and are of clear value to the organisation.
“It’s crucial that alignment to business needs is done up front with training, so that when you are asked retrospectively whether there has been value added, you have clear answers,” he says.
According to Taylor, this means ensuring that training is aligned to an ongoing skills audit.“If you are on top of which skills each role requires and because roles are defined by business needs, it can illustrate how training bridges that gap,” he says.
Declan Mulkeen, marketing director at communication and cultural awareness training provider Communicaid, agrees that for soft skills training it is vital to understand that effective programmes will have an impact on end behaviour.
“Once it is clear what changes in behaviour you require and you have determined their potential impact on business performance, it is possible to translate them into tangible metrics, which can be measured financially,” he says.
Mulkeen cites the example of measuring the RoI on cultural awareness training given to employees before being sent on an international assignment. “Assignments are very expensivefor any organisation, with costs typically four to five times’ the annual salary of the employee.By providing pre-assignment training, you can reduce the failure rate. As you understand what you want to measure and possess a clear vision of the outcomes you require, it is then possible to establish RoI,“ he says.
However, Mulkeen does have aword of warning: on its own RoI cannot determine whether training has been truly successful.“Don’t forget delegate feedback, line manager and team 360–degree reviews as well as pre– and post–training assessments and examinations.Other measures of training should always be considered to evaluate whether it was a successful initiative,” he adds.
- Before measuring RoI, make sure the training solution is aligned with core business needs
- Use an ongoing skills audit to provide evidence of why training in specific areas is needed
- Be clear on objectives and identify key performance indicators (KPIs) to measure training against
- Estimate outcomes from the start – do not start a training programme unless the initial expectation of benefits improvement is justified by the cost.