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Measuring training ROI – is it possible?

Many learning professionals are hesitant to answer this question – but you can measure the ROI of training.  

Once upon a time, return on training investment was too hard to even think about measuring. However, if you approach ROI with some non-traditional metrics, it’s definitely possible to map the effectiveness of staff training over time, giving you a quantitative way to measure the effectiveness of your training.

Here’s a fresh way to think about measuring the effectiveness of staff training using a competency scoring matrix rather than just hard numbers.

Not all about the money: measuring skills not dollars

Although ROI is typically expressed in terms of dollars, many different industries measure return on investment using other metrics. One example is customer satisfaction scores, which can often be directly attributed to an increased focus on a particular business activity such as after-sales follow up calls, a new delivery partner resulting in faster delivery times, and other business improvement measures. 

No matter what metric you choose to measure the ROI of employee training, the most important thing is to start with the end in mind. Figuring out what you’re looking to get back from your investment in training is the key to a successful outcome. 

Yes, training effect can be hard to quantify – but there are ways to track improvement over time, one of which is a capability matrix. 

Measuring improvement with a capability matrix

Perhaps one of the best ways to monitor skill improvements in your workforce is through a matrix that can be reviewed at key intervals. 

Akin to an employee ‘score card’, setting up a matrix that is unique to your business can help managers and HR teams to assess competency in particular tasks at regular intervals. 

Ranking a staff member on a particular skill that is intrinsic to their job can sound a little cold and calculating, but if the end goal is to develop that employee and help them flourish in their career, most employees will see this as a positive and look forward to opportunities to improve. 

How to measure training ROI

Let’s use taking accurate temperature readings as an example.

Reviewing how your team members go about completing this specific process – measuring and recording the temperature of different products – will provide you with qualitative data that you can record as a proficiency level. Whether it’s a score out of ten, a percentage or an A/B/C ranking, any kind of consistent ranking structure will provide some insight that your HR, learning and development or management teams can refer to. 

Make a list of any skills that the employee needs to perform their role, and rank their current proficiency. Then you can make a note of any training needed to foster and develop each skill. 

The next step is to provide the actual training – an example for cold chain teams might be specific training on how to use thermometers

After the employee has completed this training, you can observe the work process again ensuring you try to limit potential variables as much as possible. Have the same person review the employee under the same conditions, and plot any noticeable changes or improvements. 

It’s likely that you will find your team can perform more accurate, confident temperature measurement after specific training, and therefore achieve a higher proficiency score on your matrix. 

This is your return on investment: better skilled, more proficient and more capable staff that can perform the functions of their role to a higher ability. 

Repeating this review process at set intervals will also give you an early insight into when certain skills start to wane, or performance drops due to new or competing priorities.

Identifying this downturn early can help you plan for refresher training to keep your team’s skills relevant and up to date.

Positive ripple effects that tie in with your bottom line

Often management teams feel that training does deliver value, but they don’t always have the time or resources available to define what ‘value’ actually looks like. This is where it’s important to investigate specialised training that is designed for your business rather than a generic catch-all course. 

Investing in well-constructed, targeted and specific training is never going to be a waste of time for your business, but defining the value you want to get out of it is an important first step. 

  • Identify a business metric that you want to increase/decrease – for example, reduce food waste due to cold chain breaches or incorrect temperature measurement
  • Determine which business metrics you want to influence with training – for example, employee engagement or cost of goods sold 
  • Define a specific, measurable goal – for example, reduce waste caused by preventable spoilage by 10%, resulting in a $X decrease in COGS
  • Measure before and after training using a capability or competency matrix as explained above
  • Track your business metrics overlaid with the results of your training and note if there is a correlation between the two

Summary

In conclusion, tracking the ROI of training is not as cut-and-dried as measuring more basic business metrics like revenue or GP.

However, with the right processes in place you can definitely get an insight into the benefit that specific skills training has on your overall business and particularly on your bottom line. 

Set measurable goals, track progress using a repeatable process, and watch your team grow in their careers.

Ready to help your staff reach their full potential?

Take a look at our online training courses for cold chain professionals or get in touch with our team.