Most companies will tell you that their employees are their most valuable asset. Many of them mean it, but then fail to invest in this valuable asset. Without investment, the asset will loss it's value over time. Even those who invest (and one way to do this is to provide training) frequently don't really know what they are getting for their investment.

Usually, the primarily sticking point is that companies don't know how to assess the ROI of their training. Like many business problems, it helps to approach it with an easily understandable metric. Specifically, what are the costs and what are the benefits.

When determining ROI, there are five steps to follow.

What training is required: What holes need to be filled or improvements made? One of the better questions to ask at this point is whether the training and it's anticipated results align with your organizations or employees key performance indicators or other goals. 
Find a way to quantify results: Avoid vague objectives - focus on results that can be measured. For example, do you want to decrease accidents by 50%? If so, you first need to know what your actual accident rate is. Another quantifiable goal may be to decrease production waste by 20%. Again, what your current production waste figures?
Qualitative results: Some of these may be a little harder to measure, at least in short term. If your goal is to develop in-house talent to eventually fill upper level positions, you first need to know what it costs to recruit and retain this level of employee. Another qualitative benefit that training and developing of in-house talent may produce, and one that can be measured, is decreased turn-over, higher morale and employee loyalty. 
Know the costs: If you bring in outside training resources, or send employees to seminars, these costs are immediately identifiable. However, you also need to calculate their wages, their loss of productivity, and travel expenses. Even if you use in-house expertise, employee time away from their work, the lost productivity, as well as the trainers time need to be considered. Also, be aware that for each hour that a trainer presents, there will be several hours of preparation. One more warning. If you have the SME (subject matter expert) in house, this doesn't necessarily mean that they will be good at training.

Keep records of everything. Record which employees attended training and for how long? Keeping careful track of this metric is critical to determining ROI. Additionally, many regulatory agencies may want to see these training records and, in fact, keeping them could be a requirement in some industries.

Training, or investing in your employees is always a great idea. However, doing it without determining ROI is foolish. Keeping track of qualitative and quantitative accomplishments, and matching them up against your organizations' key performance indicators, as well as employees personal goals will tell you if you are on the right track.If you would like to know more about creating your own in-house training programs, our experts at ASN would love to have that conversation with you. Give us a call. 401-274-9300