The training and development spend of the organisation is a key piece of information that HR should have at its fingertips.
The debate about what percentage of profit should be spent has been widely reported on and argued about in the press.
The ideal ratio is likely to vary considerably depending on industry sector, business size and other variables, but one thing is clear: this ratio can be used as a measure for the commitment of the business to its people, and the development of capabilities and skills for the business.
The percentage of profit spent on training is a measure that business gurus talk about.
Companies like to quote it in their reports and accounts. However, the real measure of a company’s commitment to development is more complex than simply examining the percentage of money spent.
It ultimately comes down to whether the training and development has a measurable impact on the quality of your product, output or service to the customer.
To measure the impact of your training it is vital to establish exactly how you plan to set about measuring it.
Measurement criteria should be agreed, established, and seen as integral to the whole activity before it even begins.
And the measurement tools need to be specific to the goals of the training and how the business might benefit.
So if, for example, the company is conducting sales training, do the sales people sell more goods after the event than they did before?
If you train people to manage their teams better, measurement should make use of ‘before and after’ analysis alongside employee engagement statistics.
It is in HR’s interests to be able to demonstrate the difference it makes to the business with training and development initiatives instead of simply being able to demonstrate its cost.
And if you are achieving demonstrable results through your activity, it will inevitably lead to more receptivity from the business to your training and development initiatives – and potentially an increase in that ratio.