Many training professionals, including training managers, consultants and coaches, are in a state of denial about return on investment (ROI).
ROI, as it relates to any form of learning or development, is the analysis of how much the training cost and whether the organisation has received any benefit of equal or greater value. For some trainers and consultants the mere mention of ROI triggers a barrage of implausible arguments against the validity or relevance of any such an examination.
A classic example of the ostrich position that many trainers adopt whenever ROI crops up was beautifully illustrated with a report published last year by the NHS. This set out how the evaluation of leadership training within the health service should be carried out. Out of the 58 pages in the report just four paragraphs make any reference to costing training programmes, while only one sentence out of the whole missive makes any substantive reference to ROI (a PDF copy of the report can be downloaded at http://tinyurl.com/7u8nb).
When I discussed this issue with a group of trainers and developers some argued that this was perfectly acceptable. Indeed, they thought it was a complete waste of time undertaking any form of ROI in such circumstances because of the ‘soft variables’ that were present in such an under-taking. Of course they also held the view that financial issues were a minor factor in this area.
I wonder in what century these people live and work, or, indeed, if they operate in the same space time continuum as me? For their benefit and others, here is a crib on ROI in training:
- At the heart of any ROI is the determination of the training need that was undertaken at the very start of the process.
- This analysis should lead to a definition of what is going to change in the organisation as a result of the development.
- If you can’t give a clear and unambiguous answer to this question you really haven’t done a needs analysis and a subsequent calculation of ROI is impossible. But this is not because of any soft variables – simple incompetence achieves this.
The bottom line is this: training should make a financial contribution to the host organisation within which it operates, either helping to save money or make more of it.
Out of a total NHS annual budget of £49.8bn, a not inconsiderable sum will be spent on leadership training and development. It is not unreasonable to expect this expenditure to be measured against its financial benefits and not, in essence, ignored. Yet this is essentially, because of its virtual absence and explanation, what the report proposes. I hope no one would agree that this is wholly right or appropriate.
Those who do disagree with this assertion might want to consider how they would look a cancer patient in the face and explain to him or her how a training programme with no evidence of any financial worth trumps her potentially life saving prescription in the budget expenditure.
I know I couldn’t.
Garry Platt is a learning and development specialist