Is training on your expense line?

"Training is Expensive".

I've asked dozens of Business Leaders "Does anyone on your team view training as an expense line on a budget?". 100% said yes.

How about in your own life? Is your Gym membership an expense? Do you have any other personal training expense?

A simple definition of Expense is "the ongoing costs of your business (or personal life).

Lets stick to personal expenses first.

When we look at our personal budget, many people cut their expenses before they actually see the ROI when it comes to mental and physical health.

And if you haven't read any of my articles before, I'll give you a hint of what the biggest ROI of training is..... Self-Worth.

Lets just look at the gym membership use case quick... Sometimes its as low as $10-$20/month. We know all of the things going to the gym can bring us... from confidence, strength, health, longer life and so on.... which probably has $1000+ month value if not more.

But we give up on ourselves.

The same exact thing happens in peoples career development. In my experience, less than 5% of employees are actively looking to develop their career. Even though a few minutes a day learning could potentially double their income over the next few years.

WHY IS THIS???

Sometimes very low cost investments in professional growth can lead to 10X or 100X Return on investment. Most libraries contain all of the knowledge you would ever need to be a six-figure earner... and in that case... a free book could give you infinite ROI.

But we give up on ourselves.

And I'd say one of the biggest reasons we give up on ourselves, is that we are not tracking our progress and return on investment.

Now lets hop into today's Lesson.

Identify your Baseline and Target ROI Metrics.

Sure... we all have heard about goal setting. Maybe you've even heard of the SMART acronym when it comes to goals.

In my experience... the "Measurable" part of setting smart goals seems to be the part that most people forget about and ignore.

Growth, Training, Professional Development, whatever you want to call it.... all takes you (and your organization) from where you are now to where you want to be.

But do we actually clearly define our Return on Investment?

When we don't define ROI, training becomes just an expense line that can be easily crossed off by whomever is in charge of the budget.

Here a few examples of potential ROI Metrics we can track:

• Skill Acquisition: I can do pre-assessment of my skills before I start learning. This could be as simple as rating myself from 1 to 5, or as detailed as a formal written or physical assessment of the skill set. Throughout the training journey, I can continue to check in on this metric to confirm progress and learning. This is one of the most important metrics in my book, because it is directly related to your self-worth and self-confidence of that skill set.
• Performance improvement: I can get a baseline of my current performance metrics of that skill. There are all sorts of performance metrics, from efficiency, quality of work, error rates, customer satisfaction, sales numbers, and more. Most of the time these metrics all can be tied to some sort of revenue generation or cost reduction, which can easily prove training ROI.
• Employee Morale: I think the best metric here is whats called eNPS, or Employee Net Promotor Score. I feel like this metric should be tracked in ALL training programs. This is simply the metrics that tracks "On a scale of zero to ten, how likely is it that you would recommend working for our company". A properly implemented training program will definitely increase Employee Morale, which will affect employee retention and productivity. This metric alone could easily pay for any type of training program.
• Time Savings: A pretty straight forward but rarely tracked metric- how much time do you spend doing a certain task before mastering vs. after mastering it. Maybe through learning and development, you've increased your efficency on that task 25%, which could have a massive impact on the training ROI numbers.

Do you want to stay engaged and "on track" with your Learning and Development Goals? Then you need to track your Baseline and Target Metrics. This is the step most people miss. - Dan Clapper

Action Time:

1. Pick out a skill set that you personally want to improve. If your not sure where to start, check out this article.
2. Identify all of the potential metrics that could be tracked to PROVE Return on investment. Just this process alone could help you see that training ROI can easily be in the 10x-20x range.
3. Build Growth Action Plans with your employees, and make sure you track your baseline and target metrics.

Thank you for taking a moment to read this article- the core message of this entire newsletter series is that the ROI is there to train up to 10% of the time on the clock. Most companies expect people to learn and grow on their own time... and guess what... very few people actually take that initiative partially because they don't even know where to start. We as leaders must inspire growth and learning in the workplace. Thank you for subscribing, and I look forward to continuing to provide you actionable content week after week!

Your Friend,

Dan