Dreading Measuring ROI of Training? You Might Not Need To

Mention “return on investment” (ROI) to a group of people and you’ll often get one of several common reactions: heavy sighs, nods of sympathy, or looks of confusion. Measuring ROI of training is something many organizations think they should do, but few actually do it. The American Society for Training and Development (ASTD) estimates that three to five percent of organizations measure ROI for at least one of their programs. One major issue with measuring ROI is not knowing when it’s useful and appropriate.

Even the “creator” of ROI, Jack Phillips, will be the first one to say that most training programs are not suited to effective ROI analysis. To help you decide, consider what Phillips offers as ideal targets as well as poor candidates for ROI.
Phillips says ideal targets for ROI are any programs that:
  • Are very expensive to run
  • Are part of the strategic plan
  • Have an operational focus
  • Are highly visible
  • Involve large target audiences
  • Have the attention of management
Think you have some good candidates? Run them against this list of programs not suitable for ROI:
  • Inexpensive projects
  • Compliance programs
  • Legally-required initiatives
  • Specific operational job-related training
  • Brief projects of small scope
One other important caveat from Phillips: Do not measure ROI on anything that wouldn’t change anyway based on the results, or on any program that’s more expensive to evaluate than it is to run.
For example, a manufacturing plant may need to run regular safety training. Phillips would recommend against measuring ROI on such a program because it’s required and the content may be standard and mandated. Thus, even if analysis shows little or no increase in the bottom line for the investment made in the program, the training won’t go away and won’t change. On the other hand, if the same company runs a leadership program that comes out of the strategic plan, ROI analysis may be a good choice to show that the company as a whole benefits from this investment.