Why don’t HR Managers assess R.O.I. on Training and Development? (ROI Revisited)

notebookglassesIn moments of economic crisis, the first thing that senior management does is to slash the training budget because they frequently do not see the Return on Investment provided by this “expense”. Surely it is the role, if not the obligation, of the HR manager to prove to senior management that training is an investment in ensuring the future of the organization.

HR departments often spend a great deal of money every year on training & development in “soft skills”: communication, negotiation, leadership, etc., where it is more difficult to assess the contribution to the results of the organization. However, the fact that it is difficult does not mean that it should be ignored  The money invested in “Hard skills “ is  much easier to evaluate: Are the new skills that have been taught on the course being used? The answer is a simple – Yes or NO?

When an organization makes an investment to increase production, there is usually a system designed to critically evaluate the R.O.I. so that management know the “value” of the investment to the company. However, in very few companies are there similar systems to prove to management that the training is contributing to the growth of the organization.

I would propose that there are four main areas that HR managers need to urgently attend to in order to ensure that any training done contributes to the continual development of their organization in a way which enables the senior management to see and understand why training is an investment and not an expense.

1. The HR Manager should demand that K.P.Is are provided by the training provider or, alternatively, provide the trainers with a list of K.P.Is that need to be covered during the training.  The training organization should provide the K.P.Is FREE to the client as a part of the training package. It is also helpful if the training provider provided FREE post-course support by email, phone or, in certain cases, by personal visits so that the trainees know that they have additional professional support afterwards.

2. The HR Manager should inform the employees that:
– The K.P.Is will be put in their job description upon completion of the course.
– The K.P.Is will become part of an on-going & continual performance appraisal system.
– Non-compliance or non application of the K.P.Is will affect their performance bonus.
– There is no point in getting angry about being required to apply the new techniques or skills. They are NOT optional, the organization has decided that the new skills are a part of the job requirement and have invested a lot of money to help the employees gain these new skills. So, as we say in the U.K.: “Like it or lump it!”.

3. The HR Manager should ask/tell managers that they are the ones best positioned to see if their employees are using the new skills and to identify whether the K.P.Is are being applied properly. Frequently, the costs of the training courses are divided among the cost centers (departments) that send attendees to the course. Any manager who doesn’t ensure that his budget for training is not used effectively is not acting professionally!
The HR manager could facilitate this task by:
– Providing managers with the K.P.Is for each training course.
– Ensuring that, within reason, the managers do the same training course (in a group composed of other managers) – as their employees or a course at a more advanced level which includes practice in evaluating the application of K.P.Is.
– Organizing a specialized course in the evaluation of K.P.I application.
– The HR department cannot be the only part of the organization that does follow-up on the application of K.P.Is, the managers are the ones who must share the responsibility, too.

4. Many HR managers understand the importance of identifying & proving the R.O.I. on training & development, however, frequently there are other projects / tasks that are more important and are considered a greater priority, which means that they get attended to first. This attitude is understandable because K.P.I / R.O.I. control requires:
– Extra work initially: modifying job descriptions, negotiating with training providers, managers, employees, unions, etc.
– Developing & implanting K.P.I control systems into the performance appraisal programme.
– Ensuring compliance from ALL parties involved.

In these days of financial crisis, any organization with a highly-trained & skilled workforce will not only survive but grow. The use of K.P.Is and their incorporation into job descriptions, performance evaluation processes and the compliance of everyone involved is one way to ensure an effective Return on Investment.

Related article: Applying “Return On Investment” (ROI) to Training & Development.
Short link: http://wp.me/p2guX2-b

© Ian Brownlee, Brownlee & Associates, S.L., January, 2013.


About ianbrownlee

Ian Brownlee, the founder of Brownlee & Associates has been actively involved in the field of interpersonal & transcultural communication since 1977. He has worked in universities and companies in the following countries: Laos, Thailand, Hong Kong, Korea, Japan, Singapore, Saudi Arabia, France, Italy, England, The United States of America & Spain, as a teacher, university lecturer, trainer, researcher & consultant. In addition, his experience in living in these countries, and studying the language & communication and interaction styles of each has aided him in reaching a real understanding of intercultural and transcultural differences and how to resolve them. Ian Brownlee has various masters degrees from British Universities: One in Linguistics & Teaching English Overseas from Manchester University, one in Training & Development with a specialization in the area of Communication and Adult learning awarded by the University of Sheffield. He has also gained professional qualifications in Psychotherapy & Hypnotherapy from various professional organizations. During his university career he has also studied elements of Sociology, Organizational psychology, Educational psychology, Psycholinguistics and Kinesics. He is a licensed Practitioner, Master Practitioner, and Master Trainer in NLP. as well as being a trainer in Ericksonian Hypnosis. He is a member of a wide range of professional organizations involved in Training, Applied Psychology, Hypnotherapy & Ericksonian Hypnosis, Psychotherapy, Interpersonal Communication & Cross-cultural Communication. He is also recognized by the Program on Negotiation, Harvard University, as a Negotiation Skills Trainer & Mediator and has been a collaborator on various projects with the program, and as such is in great demand as a negotiation consultant for some of the largest multinationals operating worldwide. His wide experience gained in multinational organizations in positions such as Director of Training, Communications Consultant and Negotiator / Mediator has helped many people to learn and apply new methods of negotiating skills and advanced communication techniques both in their private and professional lives. He has published various articles & books related to the field of interpersonal communication and he is the author of all the courses taught by Brownlee & Associates. He has lived and worked in Spain since 1985, initially as a trainer / Special Assistant in a multinational pharmaceutical company and then as the Training Manager for a multinational company involved in Clinical Analysis & Nuclear Medicine. Brownlee & Associates was formed in 1991 and currently has a small, highly-trained staff. While based in Madrid, courses are given world-wide either in English or Spanish. Brownlee & Associates currently work with leading international companies in the areas of pharmaceuticals , Information systems, luxury products, food & beverages, etc.
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3 Responses to Why don’t HR Managers assess R.O.I. on Training and Development? (ROI Revisited)

  1. Ceferino Dulay, Jr. says:

    Let me offer an opinion on this subject. I see the training community as being divided into 3 areas: behavioral, technical and management so that invariably, trainers and training programs are also identified along these areas. This dis-aggregation is useful for trainers but may be a bit cumbersome in improving and evaluating the resulting performance of the trainee because, in fact, the trainee needs a total framework to apply what was learned. I faced the same dilemma when I designed a performance management system in the form of a technical ladder for developing technical experts and managers. So, when I designed the ladder, I sat down with business/operations, technical managers/experts and their HR groups to identify areas of specialization (technical), agree on an evaluation system for levels of expertise, a curriculum for various areas of specialization, a training faculty that included the use of the experts as trainers, etc. The curriculum was not limited to the technical areas but also included behavioral as well as management with emphasis on how performance and technology are managed and applied. And competency development was anchored on continuous learning in the classroom and application in the workplace, each being monitored and evaluated by the experts and managers. Yes, R.O.I. cannot be exactly computed because of the long-term impact of training and the diversity with which the learning is applied including the possibility of developing a wider area of business. For example, how do you measure the impact on employee morale and organizational culture, ability to address changes in technology, markets and competition beyond the cost savings? Personally, I feel the ROI is not an ultimate measure of the impact of training and development and at best, debatable.

  2. KPI´s are used in almost all other areas of the business so HR should be no different. However its often difficult to get HR to commit to assessing and working with employees to discover which KPIs are relevant to increase performance in their positions. KPis can be suggested by training providers through performance audits but ultimately clients need to align KPIs with their business goals. Final point I continue thinking that until HR get a position/voice on the board of directors they will always suffer first any cutbacks.

  3. Leigh says:

    Spot on. Companies that identify leading benchmarks and invoke KPI best practices will maximize TROI.

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