Training Effectiveness

Presentation to:
AESC
September 13, 2005
How Do We Measure
The Effectiveness of Training
 Reaction
 Knowledge Acquisition

 Behavior Change

 Business Change

 Return on Investment
REACTION
 Can Be:  Measure:
 Evaluation forms  Trainer feedback
 Discussions  Participant feedback
 Questions  Management feedback
 Observation  Outside feedback
 Grapevine  Vendors

 Partners

 Customers
Why Measure beyond
Reaction?
 Expected Program Life Cycle
 Importance of Program in Organization’s
Goals
 Cost of the Program
 Visibility of the Program
 Size of the Target Audience
 Extent of Management Interest
Knowledge Acquisition
 How To Measure:
 Pre-Test / Post Test
 Post Test
 Achievement Test / Standardized Exam
 Participant Report
 Manager Report
Behavior Change
 Self Report
 Peer Report
 Manager Report
 Observer
 Trainer
 Auditor
Business Change
 Measures business impact changes related to
the training program
 Examples:
 Service Improvement  Turnover
 Productivity  Reduction in Errors
 Sales  Decrease in LTIs

 Measurement becomes difficult because of other

types of organizational initiatives in addition to
training
Return On Investment
The ROI is a return ratio that compares the net
benefits of a training project, verses the total
costs to conduct the training. For example, if a
training workshop has an ROI of 200%, the net
benefits derived from the training are double
those of the total costs to implement the
training.
Intangible Measures
 “Soft Data” - probably Subjective but
Important
 Examples:
 Public Image
 Job Satisfaction
 Organizational Commitment
 Stress Level
 Teamwork
 Customer Service
The Inside Source
American Society for Training & Development

 ASTD’s Benchmarking Service

 Collected standard information since 1997
from more than 5,000 organizations about their
training investments, activities, practices, and
outcomes.

 Offers customized benchmarking to any

organization worldwide.
 Training Investment Leaders

 On the basis of the number of firms submitting data in

2002, twenty-eight (28) Training Investment Leaders were
identified. These U.S. organizations were ranked based on
the following four categories of training measures:
 Investment: Expenditures as a percentage of payroll
and per eligible employee for training.
 Time: Total hours of training per eligible employee.
 Reach: Percent of Employees Trained
 Sophistication: Use of Learning Technologies
 Training Investments
in the U.S., 2002
Training Expenditures as a % of Payroll

Forecast: 4.5%
 2003 4.0%
3.5%
 2004
3.0% 1998
2.5%
2.0% 1999
1.5% 2000
1.0%
2001
0.5%
0.0% 2002
Benchmarking Training
Service Investment
Leaders
U.S. Training Investments
on the Rise Again, 2002
Training Expenditures per Employee

Forecast: $1,800
 2003 $1,600
$1,400
 2004 $1,200
$1,000 1998
$800 1999
$600 2000
$400 2001
$200
2002
$0
Benchmarking Training
Service Investment
Leaders
Record Levels of U.S. Employees
Receive Training, 2002
% of Employees Trained
Forecast:
100
 2003 90
 2004 80
70
60
50 1999
40 2000
30 2001
20 2002
10
0
Benchmarking Training
Service Investment
Leaders
Training Investment Leaders Provide
Twice As Many Hours of Training
(U.S., 2002)
Training Hours Per Eligible Employee
Forecast:
 2003 70.0
60.0
50.0
Benchmarking
40.0 Service

30.0 Training
20.0 Investment
Leaders
10.0
0.0
1999 2000 2001 2002
U.S. E-Learning Jump, 2002
Forecast: % of Training Time via Technology
 2003
16.0% 15.4%
14.0%
12.0%
10.5%
10.0% 9.1%
8.5% 8.4% 8.8%
8.0%
6.0%
4.0%
2.0%
0.0%
1997 1998 1999 2000 2001 2002
Profiting from Learning, 2000
 ASTD Study:
 575 publicly-traded U.S. based firms
enabling ASTD to link their specific
investments in training and education
(late 1990s) to publicly-reported financial
performance data.
Total Stockholder Return
Total Stockholder Return Increases with
Higher Training Expenditures

25.00%
Shareholder Return ,
Subsequent Year

20.00%
Median Total

15.00%

10.00%

5.00%

0.00%
$125 $370 $660 $1,361
Training Expenditures Per Quartile
More Training =
Outperform the Market

Mean TSR, Subsequent Year

40
 Top half is
45% more 36.9%
30
than the S&P
500 25.5%
 Top half is 86% 20
more than bottom
half 19.8%
 Bottom half is
10
22%
lower than S&P
500
Bottom Half S&P 500 Top Half

Training Investments
How Big is the Stock
Return Effect?

 An increase of one standard

deviation in training expenditures per
employee (or about $680) is
associated with a 6% point increase
in total return to stockholders.
For more information contact:
Rick Hicks
Randy Smith Training Solutions
337-235-4493
rick.hicks@randysmith.com
Or
Natalie Carlson
512-401-0239
carlsonnb@sbcglobal.net
What is ASTD?
 ASTD is a leading association of workplace learning
and performance professionals.

 ASTD's 70,000 members and associates come from

more than 100 countries and thousands of
organizations.

 ASTD marks its beginning in 1944 when the

organization held its first annual conference.
ASTD Vision and Mission
 ASTD’s Vision:
 A worldwide leader in workplace learning and
performance.

 ASTD’s Mission:
 Through exceptional learning and performance, we
create a world that works better.