Have you recently purchased leadership training for your company, or are thinking about doing so? You’re probably debating whether this purchase is/was worth it and how it has/will help your department improve. It is often difficult for a corporation to justify setting aside a budget for training. However, I can say with absolute certainty that training never hurts. Training can only help a company by providing employees with the skills needed to pursue obtainable goals. Often a department head will seek proof of this, so how do you measure how much leadership training has, or will, aid your company?
The standard mathematical equation for calculating ROI, as used in the rigid business world, is as follows:
ROI= (Monetary benefits – Training Costs)/Training Costs) x 100.
Well, what on earth does that even mean?! Agreeably there are more factors present to measure than just cold hard cash. There is morale, productivity, and employee longevity to consider. Even your company reputation is impacted by the attitude and loyalty of those who you employ! Are they leaders, or are they unmotivated?
Setting aside the traditional ways of measuring ROI, here are 3 other “ways to measure” that you really ought to consider while assessing the impact of training.
Way #1: Calculate the money invested in your company leadership training and compare this to the amount of money your company has saved due to streamlining processes, less employee turn-over, and more promotions from within the company.
You will need to do this carefully. Select very discrete items to measure and do not let employees know they are being analyzed. You will want to avoid any bias or overcompensation if they know they are being studied. To measure this as accurately as possible, you will need to base this on an average day’s work performance. For example, if you recently put some employees through time management training or organizational development training, choose a specific task to measure whether or not there has been an increase in performance,. Evaluate the time it took an employee to complete the task after the training and how much the training cost versus the time it took before the employee received training. If the training was effective, there should be a considerable difference to record.
Also consider how many promotions you have seen this quarter and this year compared to outside hires. Are employees feeling fulfilled enough to stay and grow with the business because of the skills they have learned? Also measure how many new projects have been opened or completed this quarter, or this year, as compared to before the training? Are costs down while production rates are higher?
Way#2:Factor in the time spent in training for each employee and compare this to the time that would be spent filling a vacant leadership role.
How much does it really cost on average to replace a salaried employee at your company? Some companies predict that this cost may be as much as TWICE the employee’s annual salary! Training in this instance would save you a lot of money if it would encourage salaried employees to stay fulfilled in their current position. Leadership training gives people tools to be successful and create a better office culture, leading to more satisfied and loyal employees.
Not to mention that your HR director is taking time away from his/her normal task-flow in order to recruit, interview, and screen suitable replacements for the unhappy or unskilled former employees. How many tasks will then be incomplete or delayed because their attention is spent elsewhere? This is a very difficult area to measure, however it will draw your attention to which departments are suffering or thriving due to lack of, or implementation of, training, employee self-confidence, and professional culture.
Way#3: Look at the employment duration of those who have been trained versus those who did not receive training.
It is no secret that the gusto of a strong leader will rub off onto their peers. Bold yet fair leaders inspire growth and take accountability for their teams. These environments inspire longer tenure and a more positive work environment for employees.
For those of you debating whether you made the right choice in purchasing training, just look around you! You will be able to see how improvements made in attitude, perspective, and culture all effect your bottom line. Now you will be able to present your superiors with more than just a math formula to prove overall success from leadership training! You will be able to argue the human element as having equal importance.
For those about to purchase leadership training, please consider how beneficial the process of training really is. If you have any questions on how to get started or what type of leadership class is right for you, TrainUp.com is a great place to start. Call us today and let our knowledgeable training consultants guide you!