Training Plan and Design by Abhisek Gupta

Training Plan and Design

This assignment is unlike any course is based on a practical example and quantification of end to end
training plan and design. Here hypothetically we have considered an organization of 500 and divided
the entire workforce into three parts. By using that number the Induction, Training Calendar,
Competency Mapping and Career Development plan calculation is done. Moreover a complete ROI
calculation and extensive description is also mentioned here.

The calculation and the structures are already discussed in the last lecture.

1. Part 1: Induction/Orientation Training

Q1. Goals of Orientation Programs

A. Celebration
Make workers and co-workers see hiring and orientation as an opportunity to acquire new talent
and increase productivity so they can become more of a winning team.
Excite new hires about their new job/team and excite the team about the new hire.
B. Speeding Time to Productivity
Give them the information they need and help eliminate barriers so you can speed up their time
to productivity and have a positive ROI occur earlier.
Reassure new hires that they made a good decision by allowing them to begin meaningful work
as early as possible.
C. Anticipating & Answering Their Questions -
Provide avenues to anticipate and answer questions that new hires might have.
D. Becoming Part of the Team
Identify motivators/ challenges/ “de-motivators” and dream job factors of the new hire so
managers and the team can manage to them.
Get family and other workers involved in the orientation and retention of a new hire.
Give us a competitive advantage over our competitors by treating new hires differently so they
can spread the word on how we ‘celebrate” new hires.

Plan for Induction/Orientation: Considering around 10 new joinee/month

Step 1: On the Date of Joining conducting the Orientation session.

Step 2: Schedule other organizational level training bi weekly and include the new joiner on the session.
Step 3: Introduction to the team and OJT/Peer based training.

Please check Format for the complete Training schedule plan.

Format : Sample Induction Plan for the New joinee

Date Time Details Trainer Assignment

HR/Trainer Q & A Session
1stDay of Introduction to HR and
2 Hours Followed by handing
Joining Organization
over the
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manual/guidelines
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HR and HOD Assign a Peer/Buddy

1stDay of Introduction to the team and
1 Hour who will help to
Joining project
understand
1stor 2nd HR/Trainer Q & A Session
Admin –ISO and CMM
Week of 2 Hours
Awareness Training
DOJ Small Assignment
1stor 2nd HR/Trainer Q & A Session
Week of 2 Hour s Finance Procedure
DOJ
1stor 2nd HR/Trainer with HOD Case Study
Introduction with all
Week of 3 Hours
departmental process/Project
DOJ
1stor 2nd HR/Trainer Q & A Session
Week of 4 Hours Customer/Product overview Case Study
DOJ
1stor 2nd Overview of Scrum another HR/Trainer Q & A Session
Week of 2 HoursProject Management
DOJ Methodology
1stor 2nd 3 Days HR/Trainer Role Play and
Week of Per day 2 Soft Skill Training Assignment
DOJ hours
1stor 2 nd
HR/Trainer NA
Week of NA Evaluation
DOJ

Therefore considering 10 new joiner/month and 5 biweekly total hours required as following

First Level of Training: 10*2 = 20 Hours. Yearly 20*12 = 240 Hours

Second Level of Training: 20 hours/Employee and 5 employees/session, therefore 20*10= 200 hours
and 200/5 = 40 sessions/hour. Yearly 20*12 = 2400 Hours

*Total = 60 hours in a month and per day avg 2.72 hours.

2 Part 2: Training Plan and TNI

The plan is prepared considering the workforce of 600 for a period of 1 year and segregating the
workforce into three categories

Level 1: Junior Level – 250 Employees

Level 2: Midlevel – 300 Employees
Level 3: Senior Level – 50 Employees

Q2. Four Steps to Conducting A Needs Assessment:

Step 1. Perform A “Gap” Analysis.

The first step is to check the actual performance of our organizations and our people against existing
standards, or to set new standards.

There are two parts to this:

• Current situation: We must determine the current state of skills, knowledge, and abilities of our
current and/or future employees. This analysis also should examine our organizational goals,
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climate, and internal and external constraints.

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• Desired or necessary situation: We must identify the desired or necessary conditions for
organizational and personal success. This analysis focuses on the necessary job tasks/standards,
as well as the skills, knowledge, and abilities needed to accomplish these successfully. It is
important that we identify the critical tasks necessary, and not just observe our current practices.
We also must distinguish our actual needs from our perceived needs, our wants.

Step 2. Identify Priorities and Importance.

The first step should have produced a large list of needs for training and development, career
development, organization development, and/or other interventions. Now we must examine these in
view of their importance to our organizational goals, realities, and constraints. We must determine if
the identified needs are real, if they are worth addressing, and specify their importance and urgency in
view of our organizational needs and requirements

Step 3. Identify Causes of Performance Problems and/or Opportunities.

Now that we have prioritized and focused on critical organizational and personal needs, we will next
identify specific problem areas and opportunities in our organization. We must know
what our performance requirements are, if appropriate solutions are to be applied. We should ask two
questions for every identified need:

• Are our people doing their jobs effectively?

• Do they know how to do their jobs?

Step 4. Identify Possible Solutions and Growth Opportunities.

If people are doing their jobs effectively, perhaps we should leave well enough alone. (“If it ain’t broke,
don’t fix it.”) However, some training and/or other interventions might be called for if sufficient
importance is attached to moving our people and their performance into new directions. But if our
people ARE NOT doing their jobs effectively:

• Training may be the solution, IF there is a knowledge problem.

• Organization development activities may provide solutions when the problem is not based on a lack
of knowledge and is primarily associated with systematic change. These interventions might include
strategic planning, organization restructuring, performance management and/or effective team building.

Q3. Examples of Training Drivers

• Customer satisfaction surveys
• Business performance statistics and reports.
• Financial reports and ratios.
• Competitor analysis and comparison, eg SWOT analysis.
• Management feedback on employee needs, including from appraisals.
• Training audits, staff assessment centers.
• Staff feedback on training needs.
• Director-driven policy and strategic priorities.
• Legislative pressures.
• Relevant qualification and certification programmes.
• Use the results and indicators from the chosen driver(s) to produce prioritized training needs
per staff type, which will logically enable staff and management to achieve improvements
required required by the organization.
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Competency Mapping and Skill Matrix

Competency-Based Performance Management

Traditional performance management systems consist of a cycle of

(1) Objective setting or performance contracting at the beginning of a period,

(2) Management during the period, then
(3) Performance “appraisal” on results achieved against starting objectives, with and
(4) Reward (or sanction) at the end of the period.

Competency-based performance management systems differ in three important ways:

• Goal setting for development of competencies which predict results

• Emphasis on “coaching” assistance to employees in developing competencies during the
performance period; and
• Explicit measurement and reward for competency development, as well as business results
achieved, at the end of the period. Usually business results and competency improvement are
weighted e.g. 65% results, 35%development to produce a score which determines merit pay.

Format : Sample Competency/Skill Matrix (Note : this is a sample actual can differ)

Name of Competencies/Skill Level 1 Level 2 Level 3

Time Management Yes Yes

Stress Management Yes Yes

Cultural Diversity Yes Yes

Constructive Criticism/Consequences Yes Yes

Problem solving Yes Yes

Client Service Yes Yes

Goal Setting/Performance Reviews Yes Yes

Engagement Yes Yes

Mentoring Yes Yes

Job expectation/Coordination including Yes Yes

authority and responsibility

Teamwork/Positive work Yes Yes

environment/Positive Rewards

Project Management Yes Yes

Providing Feedback/Counseling Yes Yes

Effective coaching –
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Yes
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Conflict resolution Yes

Team Management Yes

Performance Management Workshop Yes

Team Building Yes

Therefore the total time calculation would be considering each competency 1 hour and in each
session max 20 employees can be included

Level No of No of Total Actual no of Per month

Employees Skills/Competencies Hours Session- Session
Hour/Year (Avg)

1 250 8 =2000 =100 =9

2 300 13 =3900 =195 =17

3 50 10 =500 =25 =2

** Total 28(26.66) session-hour in a month, average 1.2 hours/day classroom training

Some Typical Ways of Learning

• Apprenticeships
• Career Counseling
• Coaching
• Continuing Professional Development
• Course/Classroom
• Job Assignments
• Job Rotations
• Management Development Programs
• Mentoring
• On-Line Training
• On-the-Job Training
• Peer-Based Methods
• Supervisory Training & Development
• Programme/Leadership Training
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Smple Training Calendar

Format: Sample Annual Training calendar considering the training requirement from * and **
This requires 4hours/day from the trainer/organization

Duration Total Total Session Tentative Comment

Applicable Employee in Hours in Session- per Frequency
Name of Training
To Count Hours a Year Hour in year per
/Session a year Month
120 60
Introduction to HR
New Joiner 2 120 120 5
and Organization
New Joiner 120 24 24
Introduction to the 120
1 2
team and project
Admin – ISO and New Joiner 120 240 48 24
CMM Awareness 2 2
Training
New Joiner 120 240 48 24
Finance Procedure 2 2
Introduction with all New Joiner 120 360 72 24
departmental 3 2
process/Project
Customer/Product New Joiner 120 480 96 24
4 2
overview
Overview of Scrum New Joiner 120 240 48 24
and other Project
2 2
Management
Methodology
New Joiner 120 720 144 24
Soft Skill Training 6 2
Time Management Level 1 and 550 550 27.5 28
1 2
2
Stress Management Level 1 and 550 550 27.5 28
2 1 2

Cultural Diversity Level 1 and 550 1 550 27.5 28

2 2

Constructive Level 1 and 550 1 550 27.5 28

Criticism/ 2
2
Consequences

Problem solving Level 1 and 550 1 550 27.5 28

2 2

Client Service Level 1 and 550 1 550 27.5 28

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2 2
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Goal Level 1 and 550 1 550 27.5 28

setting/Performance 2
2
Reviews

Engagement Level 1 and 550 1 550 27.5 28

2 2

Mentoring Level 2 and 350 1 350 17.5 18

3 1.5

Job expectation Level 2 and 350 1 350 17.5 18

3 1.5

Teamwork/Positive Level 2 and 350 1 350 17.5 18

work environment 3 1.5

Project Management Level 2 and 350 1 350 17.5 18

3 1.5

Providing Level 2 and 350 1 350 17.5 18

Feedback/Counseling 3 1.5

Effective coaching – 50 1 50 2.5 3

Level 3 Per quarter
Conflict resolution Level 3 50 1 50 2.5 3
Per quarter
Team Management Level 3 50 1 50 2.5 3
Per quarter
Performance Level 3 50 1 50 2.5 3
Management
Per quarter
Workshop

Team Building Level 3 50 1 50 2.5 3

Per quarter

• Total 80.66 hours/month, 967 hours/year, 3.66 hours/day considering 22 working days in a
month.
• Pease note there are few values which is been rounded off
• Please note this is only considering the classroom training and workshops.
There can be other training modes as well like OJT, Online, Course and Peer based training.
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Q4. Recent Methods Used in Training

• Case Study:
• Exercise
• Application Project
• In Basket ( In Tray)
• Interactive Lecturette
• Business Games
• Simulation Game
• Sensitivity Training ( Group Dynamics)
• Programmed Instruction
• Role Playing
• Interactive Video ( IV) or Interactive Computer ( IC)
• Computer Aided Instruction ( CAI)

1.2 Training Record Capturing Sample

Format : Sample Training Monthly calendar this will be associated with the Employee Database
TRAINING CALENDAR FOR THE MONTH OF January
A) Internal Training
No. of
Total
S. Profile of the people
Activity Department Day Hrs Man Date Timings Venue
No. participants i.e.
Hours
Planned

Development Development
Leadership 09.01 12.00pm-
1 and Tech and Tech 14 1 1.5 21 C2
at work .2014 1.30pm
Support Support

Development Development
Leadership 14.01 12.00pm-
2 and Tech and Tech 8 1 1.5 12 C2
at work .2014 1.30pm
Support Support

Training
All All
Finance for 15.01 3.00pm-
3 Managers/ Managers/ 13 1 1 13 C2
Non .2014 4.00pm
HOD/Lead HOD/Lead
finance

Development Development
Leadership 16.01 12.00pm-
4 and Tech and Tech 22 1 1.5 33 C2
at work .2014 1.30pm
Support Support

Setup and Setup and

XML 17.01 5.00pm-
5 Product Product 9 1 1 9 C2
Training .2014 6.00pm
Management Management
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Evaluation of Training

Q5. Training can be Measured in a Variety of Ways Including

I - Prior to Training
• The number of people that say they need it during the needs assessment process.
• The number of people that sign up for it.

II - At the End of Training

• The number of people that attend the session.
• The number of people that paid to attend the session.
• Customer satisfaction (attendees) at end of training.
• Customer satisfaction at end of training when customers know the actual costs of the training.
• A measurable change in knowledge or skill at end of training.
• Ability to solve a “mock” problem at end of training.
• Willingness to try or intent to use the skill/ knowledge at end of training.

III - Delayed Impact

• Customer satisfaction at X weeks after the end of training.
• Customer satisfaction at X weeks after the training when customers knows the actual costs of
the training.
• Retention of Knowledge at X weeks after the end of training.
• Ability to solve a “mock” problem at X weeks after end of training.
• Willingness to try (or intent to use) the skill/ knowledge at X weeks after the end of the training.
•
IV - On the Job Behavior Change
• Trained individuals that self-report that they changed their behavior / used the skill or
knowledge on the job after the training (within X months).
• Trained individuals who’s managers report that they changed their behavior / used the skill or
knowledge on the job after the training (within X months).
• Trained individuals that actually are observed to change their behavior / use the skill or
knowledge on the job after the training (within X months).

V - On the Job Performance Change

• Trained individuals that self-report that their actual job performance changed as a result of their
changed behavior /skill (within X months).
• Trained individuals who’s manager’s report that their actual job performance changed as a
result of their changed behavior / skill (within X months).
• Trained individuals who’s manager’s report that their job performance changed (as a result of
their changed behavior /skill) either through improved performance appraisal scores or specific
notations about the training on the performance appraisal form (within X months).
• Trained individuals that have observable / measurable (improved sales, quality, speed etc.)
improvement in their actual job performance as a result of their changed behavior/ skill (within
X months).
• The performance of employees that are managed by (or are part of the same team with)
individuals that went through the training.
• Departmental performance in departments with X % of employees that went through training
ROI (Cost/Benefit ratio) of return on training dollar spent (compared to our
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Other Measures
• CEO / Top management knowledge of / approval of / or satisfaction with the training program.
• Rank of training seminar in forced ranking by managers of what factors (among miscellaneous
staff functions) contributed most to productivity/ profitability improvement.
• Number (or %) of referrals to the training by those who have previously attended the training.
• Additional number of people who were trained (cross trained) by those who have previously
attended the training. And their change in skill/ behavior/ performance.
• Popularity (attendance or ranking) of the program compared to others (for voluntary training
programs).

Assessment Centre:

• There are multiple software assessment tool and software available which can be used to
evaluate to improve the level of understanding and promote to the next level.
• This can be used as a tool for all sort of promotion, succession planning, capability building
and MDP.
• This would be a complete online evaluation methodology, other than that there are some open
source testing tools are also available.

Evaluation Matrix

The evaluation matrix has been prepared for a quarter (can be converted to annual evaluation), this is
for 10 no of employees. The same can be populated for the entire workforce.

Format: Sample Training Evaluation

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Name of Le Training 1 Training 1 Training 2 Training 2 Rating in Avg Score

the vel Score in the Score in the Assessment
Employee assessment assessment Centre

Emp1 1 Problem 8 Time 9 10 9.25

solving Management

Emp2 1 Problem 7 Time 7 6 6.5

solving Management

Emp3 1 Problem 6 Time 6 5 5.5

solving Management

Emp4 1 Problem 9 Time 5 5 6

solving Management

Emp5 2 Teamwork 9 Mentoring 8 10 9.25

Emp6 2 Teamwork 8 Mentoring 8 5 6.5

Emp7 2 Teamwork 7 Mentoring 6 3 4.75

Emp8 2 Teamwork 6 Mentoring 5 4 4.75

Emp9 3 Team 9 Conflict 10 9 9.25

Management resolution

Emp10 3 Team 5 Conflict 4 3 3.75

Management resolution

Training Content and Delivery Evaluation

• questionnaires, surveys, checklists

• interviews
• documentation
• review
• observation

• Scores are out of 10, the weightage between Assessment Centre and other scores are 50:50.
• Therefore Emp1 (level1), Emp5 (level2) and Emp9 (level3) are ready for the next level as per
the assessment.
• This has to be collaborated with the Performance Evaluation score as well.

Date :
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Q6. Training feedback form

General Reaction to the course

• Relevant
• Dull
• Structured
• Clear
• Too fast
• Too slow
• Too difficult
• Too easy

Topic wise rating

• How much did you enjoy the course?

• How well was the training useful to meet your requirements?
• How would you rate the training facilities?
• How efficiently was the course run?
• Understanding from practical (hands-on) experience?
• Ease of learning of curriculum?
• How well was the training related to your job?
• Quality of materials?
• How was the reading ease (if any)?
• How well was the matching of curriculum to software?
• Was the objective for this training clearly mentioned?
• How well was the information presented in a logical manner and understandable manner?

Training Documentation

• How well did the manual (if any) explain each topic?
• Instructor Effectiveness
• How well did the instructor explain the topics covered?
• How well did the instructor answer the Questions?
• How well did the instructor know the subject matter?
• How helpful was the instructor?
• How well did the instructor deal with timeliness?
• How well was the instructor’s presentation skill?

Training Utilization

• This is a consolidated Training feedback sheet which comprises Training

Documentation/Content, Effectiveness, Trainer, Training Utilization and suggestions for
improvement.
• This data will be collected from the individual training feedback form, includes similar
component.
• This will help us to understand the consolidated training feedback and areas for improvement
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Cost Analysis/ROI

1.2.1 Cost analysis based on Recruitment and Promotion Data

• Training can be directly associated with the Recruitment cost reduction and internal
movement; this will also increase the motivation among the existing workforce.
• Therefore, instead of hiring at the level 2, we can hire at the level 1 and decrease the
cost
• To calculate this let’s assume some grading structure and the we can calculate this

Level 1A 1B 1C 2A 2B 2C

Avg Salary 2 3 4 5 6 7

Therefore if there are 10 new vacancies at level 2A, the employee from 1C can be promoted there and
as a replacement hiring can be done at level 1A.

• Cost for Hiring at level 2 A is 5*10 = 50 L

• Cost increase for movement from level 1C to 2A is 10*1 = 10 L
• Cost for hiring at level 1A is 2*10 = 20 L

Therefore total cost saving ((50-(10+20)) = 20 L, definitely we are not calculating the direct effect
on increased motivation and higher retention.

Cost Analysis based on Attrition Data

We can calculate the ROI from the attrition data as well. In real case scenario, hiring from the market
always ends up with higher salary payment and lower productivity.

Assessing the ROI of training benefits

If people really are your greatest asset, isn't it time to look at your training programmes as investments
in your organization’s human capital and not just as an expense? In this article, Clive Shepherd argues
the case for return on investment (ROI) as a primary tool for forecasting and evaluating the training and
explains the steps involved in conducting an ROI analysis.

Measuring the success of training

The evaluation of training, like motherhood and apple pie, is inherently a good thing. But, because short
term priorities always crowd out their longer term competitors, it's typically something we plan to do
better next year - after all, we've got away with it so far, so another year won't hurt!

And even if training evaluation is undertaken, it is usually at the easiest and lowest level - the
measurement of student reactions through happy sheets. Reactions are important and the happy sheets
serve a purpose, but will they be enough to back up your arguments when there is a need for a greater
investment in training, when major changes need to be made in direction, when there is stiffer
competition for resources, when times get tough?
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Q7. Why evaluate training?

Let's summarize the main arguments for better evaluation of training:
• To validate training as a business tool
• Training is one of many actions that an organization can take to improve its performance and
profitability. Only if training is properly evaluated can it be compared against these other
methods and expect, therefore, to be selected either in preference to or in combination with
other methods.
• To justify the costs incurred in training
• We all know that when money is tight, training budgets are amongst the first to be sacrificed.
Only by thorough, quantitative analysis can training departments make the case necessary to
resist these cuts.
• To help improve the design of training
• Training programmes should be continuously improved to provide better value and increased
benefits for an organisation. Without formal evaluation, the basis for changes can only be
subjective.
• To help in selecting training methods
• These days there are many alternative approaches available to training departments, including
a variety of classroom, on-job and self-study methods. Using comparative evaluation
techniques, organisations can make rational decisions about the methods to employ.
• Criteria for measuring training success

The form of evaluation that we undertake is determined by the criteria that we choose, or are told
to use, to measure success:
• Numbers: One way of measuring the success of training is the good old ‘bums on seats’.
Although by no means a true measure of the effectiveness of training, student numbers do
reflect the fact that the training is addressing a need and that the design and methodology is
meeting expectations.
• Direct cost: Direct costs are those costs that are incurred directly as a result of a training
programme – external design and development, consultancy fees, travel expenses and so on. If
the programme did not take place, these costs would not be incurred. Many organizations only
ever take direct costs into consideration when measuring training costs.
• Indirect cost: Indirect costs are costs that may or may not be directly associated with a training
event, but which would have been incurred anyway, whether or not the training took place.
Examples are salaries of in-house trainers and students and the costs of rooms and equipment.
Any analysis of the true costs of training will include both direct and indirect costs.
• Efficiency: Efficiency is a measure of the amount of learning achieved relative to the amount
of effort put in. In practical terms this means the amount of time it takes to complete a piece of
training. Efficiency has a direct relation to cost – the more efficient a training method is, the
less it will cost.
• Performance to schedule :
o Sometimes with a training programme, ‘time is of the essence’ – the training needs to
be completed by a given date if a particular business objective is to be achieved. In
these situations, the extent to which a training programme performs to schedule is a
critical measure of success.
o Income received
o If you are a training provider operating externally to a client organisation, then income
received is a vital measure of your success. It’s the financial equivalent of ‘bums on
seats’ – the more courses you run or places you fill, the greater the benefit. Some
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internal training providers may also cross-charge their clients, although, because this
correspondingly increases the cost to the organisation, this is not regarded as a benefit
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o The extent to which trainees mix

o A justification often made for training, particularly group events, is that it provides an
opportunity for students who work in different departments or regions to meet with
each other, share experiences and make contacts. Because this is a valued outcome of
training, it needs to be considered when comparing training methods. Similarly, some
training may be regarded as a perk, a benefit of some value, even if this is not directly
related to learning.

• Reactions: Reactions are what you measure with the ‘happy sheet’. Reactions are important
because, if students react negatively to your courses, they are less likely to transfer what they
learned to their work and more likely to give bad reports to their peers, leading in turn to lower
student numbers.
• Learning: Learning, in terms of new or improved skills, knowledge and attitudes, is the primary
aim of a training event. Learning can be measured objectively using a test or exam or some
form of assessed exercise. If a student has to achieve a certain level of learning to obtain a ‘pass
mark’, then the number of passes may be used as an evaluation measure. Another important
aspect of learning is the degree of retention – how much of the learning has stuck after the
course is over.
• Behavior change : If a student has learned something from a course, you hope that this will be
reflected in their behavior on the job. If a student employs what they have learned
appropriately, then their work behavior will meet desired criteria. Behavior can be measured
through observation or, in some cases, through some automated means. To assess behavior
change requires that the measurements are taken before and after the training.
• Performance change: If, as a result of training, students are using appropriate behaviors on the
job, then you would expect that to have a positive impact on performance. A wide variety of
indicators can be employed to measure the impact of training on performance – numbers of
complaints, sales made, output per hour and so on. It is hard to be sure that it is training that
has made the difference without making comparisons to a control group – a group of employees
who have not been through the training.

Return on investment as a measure

Return on investment (ROI) is a measure of the monetary benefits obtained by an organization over a
specified time period in return for a given investment in a training programme. Looking at it another
way, ROI is the extent to which the benefits (outputs) of training exceed the costs (inputs).
• ROI can be used both to justify a planned investment and to evaluate the extent to which the
desired return was achieved. However, it can not measure all aspects of training success:
• whether students liked the training or not
• the numbers of students participating in the training
• the extent to which students' personal objectives were achieved

The process of calculating ROI

To calculate ROI you must first make estimates or obtain measurements of the costs and benefits
associated with a training programme. As you will see, the calculation of ROI is then a relatively simple
process. Let's start with the costs …

Q8. Forecasting and measuring costs

Design and development costs
• The first category of cost to be considered is the design and development of the training
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programme, whether this comprises classroom events, self-study materials, simple coaching
sessions or some combination. You will need to consider:
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• internal days of design and development

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• costs of external designers and developers

• other direct design and development costs (purchase of copyrights, travel, expenses, etc.)
• outright purchase of off-the-shelf materials
Promotional costs
• Most organisations devote effort to promoting their training programmes. This second category
takes promotional costs into account:
• internal days of promotional activity
• costs of external agencies
• other direct costs of promotion (posters, brochures, etc.)
Administration costs
• An allowance must be made for the time taken by the training department in administrating the
training programme. This will typically be a factor of the number of students:
• hours of administration required per student
• direct administration costs per student (joining materials, registration fees, etc.)

Faculty costs
• The next category of costs relates to the delivery of the training, whether this is mediated by
faculty (tutors, instructors, coaches, etc.) or is self-administered (workbooks, CBT, online
training, etc.). Let’s start with the information needed to calculate faculty costs:
• the number of students who will be going through the programme
• hours of group training (whether classroom-based or delivered in real time, online)
• hours of one-to-one training (typically face-to-face, but could conceivably be conducted by
telephone, video conferencing link or in real-time, online)
• hours of self-study training
• additional faculty hours (preparation time, the time needed to review or mark submitted work
or the time needed to correspond by email or bulletin boards with online students)
• faculty expenses (travel, accommodation, subsistence, etc.).
• Materials

Then there's the cost of materials:

• cost per student of training materials (books, manuals, consumables, etc.)
• license cost per student for use off-the-shelf materials
• Facilities
• You will also need to allow for the cost of your training facilities, whether these are internal or
external. Make sure to include the rental or notional internal cost of the following:
• training rooms
• open learning / self-study rooms
• equipment used
Student costs
• Probably the most significant delivery cost relates to the students themselves. It is only
necessary to charge a student’s cost against the programme if training is undertaken in time
that would otherwise be productive and paid for, so you only need to estimate the amount of
travel and training that is undertaken in productive work time, i.e. not in slack time, breaks or
outside work hours.
• When an employee goes through a training programme in work time, the organisation is not
only having to pay that person’s payroll costs, they are also losing the opportunity for that
person to add value to the organisation. When a salesperson is on a course, they are not bringing
in new business. Similarly, a production line worker is not creating products, a researcher is
not developing new ideas and an accountant is not finding ways to save money.
• If an employee can be easily replaced while they are undergoing training, then there is no lost
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opportunity – the cost is simply the employee’s payroll costs. In many cases, however, it is
simply not practical to obtain a suitable replacement, so the output that the employee would
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have generated in the time that they are receiving training will be lost. In this case, the true cost

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of the employee being trained is the lost opportunity – the 'opportunity cost'. The calculation
of opportunity costs goes beyond the scope of this article, but, suffice to say, they are greater
than an employee's payroll costs and need to be considered in any serious evaluation of costs.
• Finally, don't forget to include any direct student expenses - travel, accommodation and
subsistence.
Evaluation costs
• You also need to make an allowance for the time spent evaluating the training, whether this is
an ROI analysis or some other method.

Forecasting and measuring benefits

The financial benefits of training can not be measured in terms of student reactions, nor the amount of
learning that has been achieved; not even the extent to which behaviour may have changed. The real
benefits come from improved performance – traditionally the hardest training outcome to forecast or
measure.
• So, what do we do when faced with this difficulty – back away and focus our evaluation efforts
on easier measures? No, we do the very best we can, because all other measures fail to reflect
the financial reality that training must pay off – in hard cash.
• If it is any comfort, trainers are not alone in finding it difficult to calculate the benefits of what
they do. Is it any easier to predict the benefits to be obtained from launching a new product,
running an advertising campaign, initiating a research programme or changing the pay and
benefits policy?
• Let's look at the major categories of benefits. Note that these categories are not necessarily
mutually exclusive - in some respects they provide alternative ways of looking at the same
underlying benefit. Because of this, you should be extremely careful not to include the same
basic benefit under more than one of these headings.

Labour savings
• Labour savings occur where, as a result of the training, less effort is needed to achieve current
levels of output. We have to assume that savings are realised by a reduction in the amount of
labour applied to a particular job, not by utilising the newly available time to achieve further
output on the same job.
• Labour savings will only be realised if the labour applied to a job can really be reduced, whether
this comes as a result of redundancies, transfers of staff to new positions or re-allocations of
work. If the time savings simply result in more slack, then there is no saving.
• Examples of labour savings include:
• reduced duplication of effort
• less time spent correcting mistakes
• faster access to information

Productivity increases

• Productivity increases occur where, as a result of training, additional output can be achieved
with the same level of effort. This implies that the organisation requires or desires more output
in this particular area. If it does not, then it might be better to express the benefit as a cost
saving.
• Examples of productivity increases include:
• improved methodologies reducing the effort required
• higher levels of skill leading to faster work
• higher levels of motivation leading to increased effort
• Other cost savings
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• Cost savings can be achieved in a variety of ways, not just through savings in labour, and this
category allows you to take account of these. Examples include:
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• fewer machine breakdowns, resulting in lower maintenance costs

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Training Plan and Design by Abhisek Gupta

• lower staff turnover, reflected in lower recruitment and training costs

• a reduction in bad debts
• Other income generation
• In some job positions, it may be possible for new income to be generated as a direct result of
training. Sometimes this can be satisfactorily recorded as a productivity increase, but there will
be times when a more direct and specific analysis is required.
• Make sure that you offset from the income any variable costs that are incurred as a result – it
is the net contribution that you are looking for.
• Examples of other income include:
• a higher success rate in winning competitive pitches, leading to increased sales
• sales referrals made by non-sales staff
• new product ideas leading to successful product launches

Calculating return on investment

Return on investment tells you the percentage return you have made over a specified period as a result
of investing in a training programme. On the assumption that benefits will continue to accrue sometime
after the training, then the period that you specify is critical to the ROI figure you will obtain. You may
like to specify a period that fits in well with your organisation’s planning cycle – perhaps a year or two
years. On the other hand, you may wish to calculate the period to correspond to the lifetime of the
benefit, in which case you will need to know how long the average student stays in a position in which
they can continue to apply the knowledge and skills being taught.
• It is relatively simple to calculate return on investment:
• % ROI = (benefits / costs) x 100
• Payback period
Another way at looking at ROI, is to calculate how many months it will take before the benefits of the
training match the costs and the training pays for itself. This is called the payback period:
• payback period = costs / monthly benefits
• Payback period is a powerful measure. If the figure is relatively low – perhaps only a few
months – then management will be that much more encouraged to make the training
investment. As a measure, it also has the advantage of not requiring an arbitrary benefit period
to be specified.

Here's an example of the final results for a ROI analysis:

• Duration of training
• Estimated student numbers
• Period over which benefits are calculated
• Costs
• Design and development
• Promotion
• Administration
• Faculty
• Materials
• Facilities
• Students
• Evaluation
• Total cost
• Benefits
• Labour savings
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• Productivity increases
• Other cost savings
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• Other income generation

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• Total benefits
• Return on investment
• Payback period
• Simplifying the process

If you've been following through all of these steps, then you'll have realised just how many calculations
are involved in conducting a thorough analysis. What's more, when you start to look at areas such as
opportunity costs and productivity benefits, then there are some quite tricky concepts involved.

Making ROI work for you

It has become something of a cliché for senior management to claim that 'people are our greatest asset'.
Yet, much to the dismay of trainers, the effort they put in to developing this 'human capital' continues
to be seen as an expense and not as an investment. It's time to turn this around. Start to analyse your
training programmes as if they were capital investments - using techniques like ROI - and senior
management may start to change their attitude to training. And at a time when there are so many exciting
new developments in training - not least online learning - and a possible recession ahead, you're going
to need their co-operation.

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