Improve ROI by 200%
Implementing a training program requires a good understanding of the areas you need to focus on. You want to ensure workplace safety and you want to make sure employees have a good understanding of your company and their role.
For a significant return on investment though, you want to provide something more. This something more is skills training, including soft skills which have been shown to improve ROI by 256%. This return is seen in increased productivity and increased employee retention.
Why Soft Skills?
Soft skills training includes areas such as:
- Time Management
- Financial Literacy
- Legal Literacy
With an ever-changing workforce where the technical skills are shifting for different roles, these soft skills have just as much demand in the workforce than the technical skills. In many places the soft skills are more valuable than the technical.
These are skills that will make employees more proficient in their roles. They are transferrable skills which will provide a good pool of promotable candidates when roles open up.
Providing soft skills training also shows employees they are valued, meaning they will be more likely to stick around.
What is the Goal of Training?
Before you start a training program, you need to have goals in mind if you want to understand how to focus training to improve ROI. These goals could be increased sales, improved customer satisfaction, reduced waste, etc.
Determine the goals and put measurements in place to see how your training program is affecting these goals. Compare these measurements to the expectations of those involved in the changes to get a good idea of how effective your training is.
Measurements of the effectiveness of training can include:
- Increased Profits
- Increased Productivity
- Improved Efficiency
- Employee Retention
Employee retention is a good measurement of training efficiency because employees who feel valued and prepared for their jobs are more likely to stick around.
What is Your Training Return on Investment?
The formula for calculating ROI is
Profit from training program – training costs/ program costs
This will give you the dollar amount returned for every dollar spent. You can also calculate long-term ROI by
Total investment/ annual savings
With training, to improve ROI, you need the program to meet two criteria.
- Are employees gaining new skills or knowledge that increase efficiency or reduce costs in the workplace?
- Can you measure the cost of training against the benefits to individuals and the company?
There are a couple different areas you should consider when measuring this and determining your training ROI.
For a training program to be effective, employees need to feel it is valuable to them. This means you need to know how employees feel about the training they receive.
Ask employees if the training is worthwhile. Ask if they would recommend the training to others. Find out how useful the material was to them.
Not only do employees need to find the information valuable, but they also need to truly learn something from the training program. Quizzes after training is complete is a great way to measure the ROI of your program.
You can test their knowledge before and after the training to get a good indication of what training they need and what they learned.
Employee Use of New Skills
Even if employees find the training information valuable, and they showed an understanding of the material, it will do no good if they don’t start putting new skills to use. If you are going to take the time to measure training metrics, you need to include a follow-up on how employees are using the information they receive.
This includes measuring their behavior in the workplace to see how training has affected their daily activities. These follow-up measurements can be done through supervisor assessments, peer evaluations, or employee self-evaluations.
For a good understanding of training effectiveness, you need to take outside factors into consideration. Changing economic conditions or changes to the industry can affect business outcomes with or without training, and these things need to be factored into your training metrics.
One change that can drastically affect your training program is the shift in necessary core skills. For employees who want to remain in the same role, the core skills necessary will change by 40% in the next five years. This means 50% of employees will need reskill training to meet new needs, and this will affect how you measure training success.
Tangible versus Intangible Results
Training can provide both tangible and intangible results to help improve ROI. Tangible results include increased sales or improved productivity that can be measured easily.
Intangible results include areas such as customer engagement or loyalty and increased teamwork which are more difficult to measure to see results. Both types of results can be measured though to give you insight into your training effectiveness.
Customize Your Training for Improved ROI
Each company will have different goals, which means different training needs to meet those goals. That is why an online training management system like Infinit-I Workforce Solutions is a valuable tool to improve training ROI.
You can provide customized training to meet individual or department needs, and employees can complete it at their convenience, so your training program doesn’t disrupt productivity. The Infinit-I platform allows you to track all training progress so you can measure the success of your training program.
Our online training platform is easy to set up and use. You can access our library of microlearning training videos or add your own training material to meet your company needs. Schedule a demo to see for yourself how easy the Infinit-I Workforce Solutions platform is to navigate.