Monday, December 13, 2010

Calculating ROI Training

8 steps to calculate the ROI of training.
ROI is used for both justifying  or evaluating training;
Use expected figures for justifying whilst for evaluating, actual figures.
  1. Measure output input KPI before training.
  2. Conduct training on best practices
  3. Calculate total cost of training including opportunity.
  4. Measure output input KPI after training.
  5. Measure net improvement change through the shift of the KPI.
  6. Calculate the net value of the output as the result of improvement in competency.
  7. Eliminate the effect of volume and trend. (other factors than training)
  8. Divide 6 by 3 to arrive at return on investment.
  9. You can also extend the ROI calculation to IRR which is more precise indicator

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