How to calculate the ROI of your training?

Approximate reading time: 4m 51s

Calculating training ROI is not an easy task. A practical approach is needed, and the actions to implement it should begin even before the training starts.

1. Start asking questions before the training has even begun.

In most cases, in the process of creating training courses, at least one person is involved who provides guidance on what should be included in the content. This is necessary, but their presence and participation is not enough. Your responsibility as a training specialist is to include future learners in the process as well. Research shows clear evidence in this regard – adults are not interested in training unless they are convinced it will be useful to them.

The initial survey is your opportunity to capture not only the thoughts, but also the minds and hearts of the people who will be trained. Pay attention to their expectations and find out what motivates them, then use the information gathered in the training.

To determine whether a training course is useful or not, you can use the following methods:

1. Participant evaluation: You can ask training participants to rate the training using a survey or an online form. They can provide feedback on whether the training helped them develop new skills or improve existing ones.

2. Tests and assessments: You can measure the effectiveness of the training by conducting tests before and after the training. These tests can measure the knowledge and skills that were acquired during the training. This allows you to compare the results and see whether the training led to improvements.

3. Measuring results: You can measure the results of the training by analyzing employees' performance before and after the training. If employees achieve better results after the training, this can be evidence of the training's effectiveness.

4. Measuring ROI: You can measure the training ROI to see whether it was effective. If the ROI is positive, this can be evidence of the training's effectiveness.

Ultimately, a training course is useful if it improves employees' knowledge, skills, and performance and helps them achieve the organization's goals. It is important to have a clear idea of the training objectives and a way to measure its effectiveness.

2. Measure the engagement and actions of training participants.

People say many things – they say they exercise, that they are patient with their children, that they pay attention during training… But the facts show otherwise.

You should measure the engagement that learners demonstrate, not the engagement they claim to feel. Observe and analyze their behavior and results, compare them, and share them with the trainers. That way, you will be able to see which learners are truly engaged in the training, as well as the relative value generated by each of its parts. To make this easier, you can use automated reports that describe in detail the actions of each learner.

One of the most commonly used methods for measuring engagement is the Kirkpatrick Model of Engagement. This model has four steps:

1. Step 1: Reaction evaluation - This step assesses employees' reaction to the training. This may include evaluating employee satisfaction as well as their interest in the training. This type of evaluation can be carried out through surveys given to employees after the training is completed.

2. Step 2: Learning evaluation - This step assesses the skills and knowledge acquired during the training. This may include tests or other assessments that measure the impact of the training on employees.

3. Step 3: Application evaluation - This step assesses the extent to which employees apply their new skills and knowledge in the workplace. This may include workplace observations, evaluation of employee performance before and after the training, as well as interviews with management.

4. Step 4: Results evaluation - This step assesses the actual results of the training. This may include measuring ROI, employee productivity, and other key performance indicators.

In this way, the Kirkpatrick Model of Engagement allows us to measure employee engagement in training by assessing their interest, the skills and knowledge acquired, their application in the workplace, and the results of the training.

Assessing employee engagement can be useful for evaluating the effectiveness of training and identifying areas where employee engagement needs to be improved.

For example, if the reaction evaluation shows that employees are not very satisfied with the training, it may be necessary to reconsider the methods of delivering information or choose a more suitable time for conducting the training.

It is important to note that the Kirkpatrick Model of Engagement is not the only way to measure employee engagement. There are many other methods and tools that can be used to assess engagement, such as using social networks for learning and collaboration, introducing systems for rewarding employees for participating in training, or using e-learning tools that allow employees to track their progress and receive individual feedback.

Regardless of the methodology you use, it is important to focus on employee engagement in the training. This will help you create more effective training and improve the efficiency and productivity of your organization.

3. Ask questions to receive feedback from employees about the quality of the training

When you ask direct questions, make sure they are the right questions.

Do not ask learners whether they liked the room and whether the trainer was entertaining. Those are certainly tempting questions, but they do not measure the value of your training.

What questions should you ask?

• Present a scenario and ask training participants to give suggestions on what the possible outcome of the situation might be. Ask them to evaluate their suggestions.

• Ask a multiple-choice question in which each answer is technically correct. Ask the learners which answer they think is the most correct, then have them explain why they chose that answer. This will stimulate discussion and active thinking and will avoid „rote learning“.

• Ask training participants to perform one of their standard work duties – for example, write an email to a client. Then review all the versions and give the group the task of suggesting improvements.

• At the end of the training, ask learners to make a commitment – what tactical change would they make when they return to their desks? According to research, making a public commitment influences behavior. Keep the answers and send them to the learners one month after the training.

• Continue training people after the training has ended. The most important moments are the ones that happen right then. Follow the learners' performance closely, but do it personally and in line with their experience.

And finally: How is training ROI calculated?

Training ROI (return on investment) can be calculated by determining the difference between the profit the company achieved after the training and the costs incurred for the training. Then this difference is divided by the training costs and multiplied by 100 to obtain the percentage return on investment.

ROI calculation formula:
ROI = (Profit - Training costs) / Training costs x 100

To determine the profit achieved after the training, you can use the following methods:

• Measure the increase in sales or revenue after the training. If the company's sales or revenue increased after the training, this can be attributed to the effectiveness of the training.

• Calculate cost savings. If the training helped reduce the company's costs (for example, by reducing defects in production), these savings can be included in the profit.

• Calculate the improvement in employee productivity. If the training led to more efficient employee work, this can be reflected in improved productivity and possibly higher profits.

Once you determine the profit, you can calculate ROI by measuring the difference between the profit and the training costs, dividing it by the training costs, and multiplying by 100 to get the percentage return on investment.

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Finally, ask the learners which things they think they learned that are important and how many of them they use in practice. This is the point from which you can begin calculating the ROI of your training.