NZIM TRAINING : How to boost training’s ROI

Training makes people more capable. There is no shortage of evidence to prove it. But too often, organisations don’t know how much value training delivers. And, when they can’t measure it, chances are they won’t do it or, worse still, they will do it badly and squander the return on the investment.
If people are an organisation’s greatest asset, developing them is the most important investment of all. It makes sense, therefore, to both measure and identify the business value training delivers. Measurement by conducting attendee surveys or counting the number of courses they have completed is no measurement at all. Organisations need to know whether their employees learned anything that improved their capability and business performance.
Organisations don’t have money to spare any more. Investment in training cannot be “pig-in-a-poke” exercise. recent study conducted by one of America’s social-sector groups, the Boys & Girls Clubs of America (BGCA), showed just how organisations can ensure better return from their training budgets by identifying which learning experiences create value and how.
The organisation faced shortage of leadership capability. Using capability model that appraised nearly 50 aspects of leadership, it undertook 360-degree assessment of every local leader in the organisation, involving more than 650 leaders across the US.
The process found that four out of the 50 leadership aspects contributed disproportionately more to performance. As result, BGCA built its training programme around those four subjects. According to reports of the study, the programme involved both intensive classroom work and project chosen by each local team.
Because the programme was designed to improve specific organisational-performance outcomes, assessing its impact was relatively straightforward. Without going into full explanation of the evaluation process, it showed that on average, where leaders had been trained they bettered control group on every performance outcome measured.
BGCA found that the programme generated more than four-fold return on the cost, including the participants’ time, travel and training expenses. And when it compared the performance gains among participants, it found that the performance gains of those in the highest quartile were three to five times the average. The high performers focused on very aspirational projects; set clear, quantifiable goals; and took the extra step of teaching what they learned to the rest of their organisation. The insights led BGCA to adjust the training curriculum to reinforce the success factors.
As the New Zealand Institute of Management Southern’s training consultant Gail Foster-Bohm says: “When times get tough, training-learning development is often one of the first (costs) to go by the wayside in favour of areas perceived to be of greater importance. All too often we see businesses with shortage of leadership capabilities and too little money to support growth or reluctance to spend what money they do have in this area.”
The BGCA approach of concentrating on four of the 50 leadership aspects saved time and money, she says. “It provided clear direction for the organisation and the participants. The results speak for themselves.”
NZIM Northern’s learning and development manager Suzanna Rangi agrees with the BGCA approach. “Work-based qualifications have increased by more than 50 percent in the past four years,” she says. And these qualifications incorporate assessments that are directly linked to organisational performance measurements and continuous improvement processes.
“As provider, we are expected to show how we can assist by ensuring return on the investment,” says Rangi. “The lead time before the client commits to programme is longer now because they want to ensure that measurement tools are implemented. Assessments are also related to outcomes.”
Susan Andrews, NZIM Central’s learning and development strategic marketing manager, believes the BGCA experience is tangible example of an organisation taking strategic approach to ensuring its training dollars deliver value for money.
“By taking the time to identify and analyse the areas of greatest need and to gather baseline measures prior to doing the training, meant they were able to benchmark their pre and post results and prove the value of the training,” she adds.
“Most New Zealand managers recognise the value of developing their people. Unfortunately they do not always allow enough time and resources for upfront analysis and planning. An unstructured approach leads to ad-hoc training which is not easy to evaluate.”
Before she develops programme, Foster-Bohm asks organisations where they are at, where they want to be and what behaviours they want to see changed. She also looks at the organisational structure and discusses any challenges or constraints that may prevent them from reaching their goals. “I then analyse the results and put learning and development plan in place that meet their needs,” she says. Then she measures the outcomes. “That way we can ensure that the training meets not only the organisation’s expectations, but that the participants found value which allows them to take their learnings back to the workplace.”
Rangi uses 360-degree feedback and other pre-measurement tools such as EQ (a methodology to measure change of behaviours) and Team Member Inventory (which measures skill set levels to help organisations identify the attributes needed to build their capability).
The outcomes are usually based on completion of the work-based assessments. Learners are expected to complete the work assessments, usually linked to the organisation’s needs.
“We recommend the work-based assessments and implementation process as solution because it gives the organisation an option to measure change and improvement. It also gives the learner the opportunity to implement change and get recognised for it – through NZQA accredited qualifications,” she says.
Andrews believes that effective individual learning is “best achieved with mix of external and on-the-job” learning. But, she adds, “the more we know about the needs of the organisation and the individual, the more targeted the development”.
Picking the right metrics is critical to creating real value from training. By tying the training curricula to key organisational performance metrics and then measuring its impact, organisations can generate greater value from training programmes.