Myth: The return on investment in training cannot be measured

Reality: It depends on how you choose to view and measure it …

 

The challenges around calculating the ultimate benefit of management training – return on investment – are nothing new but are likely to be coming into sharper focus over the next few years as organisations face the challenges of improving productivity and the economic challenges of Brexit.

A recent report¹ suggests that 72% of CEO’s believe the next three years will be more critical for their industry than the last 50 years and that over 50% report significant skills gaps in key business functions.

Yet it’s not uncommon to hear that business leaders find it difficult to know where to start when measuring the returns to be had from management training.

However those who can set clear and simple objectives and evidence measures can generate and measure excellent returns on investment. These can have long term positive financial impact.

So here’s an Impellus guide to calculating the return on investment of your management and leadership training.

 

How to assess the value of management training

Business leaders and HR directors can assess the financial impact, value and benefits of  management training from qualitative evidence (this can be gathered by simply walking around the workplace) as well as other metrics accessible from quantitative records.

 

Here’s where to look to discover how the return on your management training investment is manifesting itself:

 

1.      Managers

Some behaviours which should be more prominently displayed by managers who have undergone leadership skills training:

  • Flexibility and agility when change management strategies are introduced within the organisation
  • Confidence to take the business and their team forward
  • Eagerness to apply new skills in the workplace to achieve targets
  • Strong relationships and empathy with their line reports and the passion for their teams to deliver on KPI’s
  • Readiness to conduct performance appraisals and set individual’s objectives in line with the organisation’s mission, values and goals
  • Enthusiasm for their line reports to undertake personal development training and willingness to introduce succession planning
  • Understanding of conflict situations that may occur within their teams and assertion to quickly resolve any that may arise
  • Readiness when it comes to new organisational/inter-departmental challenges
  • It could be argued that all managers should display these behaviours but few will consistently without formal training.

 

2.      Teamwork

Team members headed up by a manager who has been trained in leadership skills should be more likely to show a willingness to develop themselves or display improved working initiative.  Observation of these teams often reveals:

  • A harmonious and/or fun working atmosphere
  • High employee satisfaction scores in the annual employee/pulse survey
  • Excellent communication skills between one another and with other colleagues throughout the organisation
  • An increase in efficiency and productivity ratings compared with those prior to training
  • Higher than the organisation’s average customer satisfaction ratings, if they are a client facing team
  • Eagerness to get involved and support in organisational challenges, CSR/charitable fundraising, etc.

 

3.      HR

In the HR department, the effectiveness of training can be measured in statistical forms, as follows:

  • Absenteeism among engaged, ‘trained’ teams is most likely to be less than among those that are not motivated by their manager
  • Employee retention rates rise where training and personal development is experienced by staff, so this should be visible in the relevant teams
  • Succession planning and internal promotion is an attractive motivator to those who develop their skills and knowledge – the advancement of ‘trained’ employees should be easy to track compared to their colleagues who have not been given the same training opportunities
  • Over time the two metrics above (increased employee retention and internal promotion) will be reflected in a drop in the resource and cost involved in recruitment – a significant saving for the organisation.

 

There’s a huge opportunity for organisations to unleash the power of their people and deliver the financial benefits that come with that. There will be many signs as to the effectiveness of the investment in training; business leaders just need to look for them behaviourally and qualitatively before understanding the impact on the balance sheet.

¹ Unlocking Potential by www.towardsmaturity.org, 2016-2017 Learning Benchmark Report – over 600 participants provided detailed information for this study.

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