TRAINING'S ROI
The Human Capital ROI Nine-Step Worksheet allows companies to estimate accurately the monetary returns both before and after most skill, training, or education programs.
It addresses three serious issues that until now have compromised accurate financial training measurement:
1. Training Effectiveness versus Other Business Variables: Did the results come from the training program or some other business factor?
2. Training Transfer: Unless you have a way to calculate the "average" training transfer back on-the-job, you will inflate the training's ROI.
3. Depreciation of Training: Even the best training programs do not permanently improve a business. You need to depreciate a training program's benefit over time.
This worksheet was designed by an interdisciplinary team consisting of: Kevin Hollenbeck, Senior Economist, The W.E. Upjohn Institute for Employment Research; Robert M Naiman, CPA, J.D., Boyd Owens, manufacturing manager at RBC Bearings; and Ed Gordon, Imperial's President.
Practical Considerations
To use the Human Capital ROI Worksheet, data on profit margins, gross revenue and other operational data must be obtained. This assumes the cooperation of other business units within an organization. They may include the accounting, engineering, and marketing departments as well as general management.
The ROI worksheet is a file to be used in an Excel spreadsheet. It can be downloaded free of charge in two forms from this site. The example worksheet takes data from a Kaizen training program to illustrate how the ROI is calculated. The blank worksheet allows you to enter your own training data to make ROI calculations.
To aid the design team in our continuing research on ROI measurement of training or education programs, a registration form is the first step in obtaining the ROI software.
Imperial Consulting Corporation offers a Human Capital Executive Coaching Program that will show you how to:
- Identify performance opportunities clearly linked to new learning by employees
- Use our ROI software
- Calculate the ROI of potential training alternatives
- Capitalize training costs rather than expense training.
The coaching program has been developed to help organizations successfully roll out the Scoreboard. As a first step we suggest a one-day Executive Briefing on Imperial's Human Capital Scoreboard to help you introduce this process to your organization.
To find out more about these performance/productivity programs, click on Contact Us
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