Training is a vital investment for any organization, but it can also be a challenge to secure enough funding and demonstrate its value. How do you justify and secure your training budget based on ROI? Here are some tips to help you make a convincing case and measure the impact of your training programs.
Before you plan any training, you need to have a clear idea of what you want to achieve and how it supports your organization's goals and strategy. This will help you align your training with the needs and expectations of your stakeholders, such as managers, clients, or regulators. You can use tools like SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) or OKR (Objectives and Key Results) to define your training goals and outcomes.
While there might be standard training that pertains to a group of employees or everyone in an organization, customization is often necessary to ensure adequate learning is imparted. One other point in this mix is to consider ongoing training or training progression for each individual. The more aligned the training is, the more that individual can bring back to the table in their journey from AWARENESS to LEARNING to SUBJECT MATTER EXPERT!
To estimate the ROI of your training, you need to compare the costs and benefits of your training. Costs include not only the direct expenses of designing, delivering, and evaluating the training, but also the indirect costs of lost productivity, opportunity, or quality during the training. Benefits include the expected outcomes of the training, such as improved performance, retention, satisfaction, or revenue. You can use formulas like this one to calculate the ROI of your training:
ROI (%) = (Benefits - Costs) / Costs x 100
To justify and secure your training budget, you need to have data and evidence to back up your ROI calculations. You can use various methods and sources to collect data, such as surveys, tests, interviews, observations, or analytics. You should also use different levels of evaluation to measure the effectiveness of your training, such as Kirkpatrick's four levels: reaction, learning, behavior, and results. You should collect data before, during, and after the training to track the changes and impact of your training.
Once you have your data and evidence, you need to communicate your ROI and value proposition to your stakeholders in a clear and compelling way. You should tailor your message to the needs and interests of your audience, such as highlighting the benefits for their specific role, department, or project. You should also use visuals, stories, or testimonials to illustrate your points and make them more memorable. You should also anticipate and address any objections or questions that your stakeholders might have about your training.
HR Professionals must own the PR and optics around their Learning & Development programs. The default assumption is that people will either have forgotten about them or assume they are low ROI/ineffective. It is key to make these efforts visible by managing up with updates and briefings to key stakeholders and executives, both in HR but most importantly beyond HR. These updates should be data-rich with benchmarks, key charter/expectations, and a believable plan to address negative feedback and to double down on what is working. ROI is both a financial calculation (see above) as well as a matter of perception and sentiment. Manage both!
Finally, you should not stop at justifying and securing your training budget, but also monitor and adjust your training based on feedback and results. You should track the progress and outcomes of your training over time and compare them with your goals and expectations. You should also solicit feedback from your learners, trainers, managers, and other stakeholders to identify what works well and what needs improvement. You should use this information to refine your training design, delivery, and evaluation to optimize your ROI and value.