ASSESSING THE ROI

OF TRAINING
A Presentation by Group IV

Training is expensive. Without

training it is more expensive
Nehru
 SYNOPSIS

Introduction
Measuring the success of training
Forecasting and measuring cost
Forecasting and measuring benefits
Calculating return on investment
Making ROI work
MEASURING THE SUCCESS
OF TRAINING

Why evaluate training ?

To validate training as a business tool
To justify the costs incurred in training
To help improve the design of training
To help in selecting training methods
 INTRODUCTION

ROI ( Return on Investment) is a measure

of the monetary benefits obtained by an
organisation over a specified time period in
return for a given investment in a training
programme
CRITERIA FOR MEASURING
TRAINING SUCCESS
Numbers
Direct cost
Indirect cost
Efficiency
Performance to schedule
Income received
CRITERIA FOR MEASURING
TRAINING SUCCESS

The extent to which trainees mix

Reactions
Learning
Behavior change
Performance change
 FORECASTING AND
MEASURING COSTS
Design and development costs
Promotional costs
Administrational costs
Faculty costs
Materials
Facilities
Students
Evaluation costs
 FORECASTING AND
MEASURING BENEFITS
Labor savings
Reduced duplication of work
Less time spent for corrections
Faster access to information
Productivity increases
Improved methodologies, reduced efforts
Faster work due to higher skill levels
Higher motivational levels
 FORECASTING AND
MEASURING BENEFITS
Other cost savings –
Reduced breakdowns and maintenance costs
Reduction in staff turn over resulting in to,
lower recruitment and training costs
Reduction in bad debts
Other income generation-
Higher success rate leading to increased sales
Sales referrals made by non sales staff
New product ideas leading to successful
product launches
 CALCULATION OF ROI
% ROI = (Benefits /Costs ) X 100
ROI tells the % return made over a specified
period as a result of investing in a training
programme.
Pay back period = Costs/Monthly benefits
Another way of looking at ROI is to assess the
period required to accrue benefits of training
vis a vis investments in training
TRAINING PARADOX

Train people to the point where

you may lose them, and then you
won’t lose them.
THANK YOU