Trainers need to understand return on investment (ROI) to generate funding.
Training professionals have been responding in the wrong way to top executives for years and need to speak the language of finance, according to a leading expert in measurement and evaluation.
Jack Phillips, chairman of the US-based ROI Institute, told delegates at the HRD Conference in London last week that return on investment is the language that chief financial officers (CFOs) understand.
“ROI is about accountability of what we – learning and training professionals – are doing in the organisation,” he said. “It is a good term to use with CFOs as it is the language they understand. They are looking more closely at the value of investments and can be an ally to training departments if [it is clear these departments] understand ROI.”
Phillips, a former training and development manager at two Fortune 500 firms, said learning was so critical to an organisation’s progress that there was a real need to achieve a higher form of evaluation.
“An ROI analysis earns the respect of senior management and improves support for training and learning departments,” Phillips said.