Why It’s Time to Measure the ROI of Employee Training

Historically, organisations have naturally assumed that providing professional training for their employees is the right thing to do. It creates a safer, more effective workforce, fosters loyalty, and promotes social responsibility. In the 20th century, this made perfect sense. A workforce that stayed with an employer for decades allowed companies to invest in training today, knowing they would reap the rewards through increased productivity and reduced downtime over time.

Measuring return on investment (ROI) wasn’t a priority—sooner or later, the company would benefit from its investment.

The Changing Face of the 21st Century Workforce

Fast forward to today’s workplace, and everything has changed. The workforce is now filled with millennials and Gen Z—generations that often measure careers in months and years, not decades. Employees are much more mobile, making it harder for organisations to gain long-term returns on training investments.

This shift makes it critical for companies to measure the short-term impact of training. To succeed in today’s environment, training must deliver value quickly—within a millennial timescale.

Despite the importance of tracking ROI, many companies are still not measuring the effectiveness of their training programs. As paraphrased from the famous quote by John Wanamaker, "Half of what we spend on training may be wasted, but the trouble is we don’t know which half."

Why Measurement Matters More Than Ever

Training might seem like a valuable investment, but without quantifiable data, there’s no way to prove its effectiveness. Without a robust measurement process, organisations may waste time, resources, and budget on ineffective training programs.

However, this doesn’t mean organisations need to spend a significant portion of their budget on expensive measurement tools. By implementing a few straightforward strategies, companies can measure their training’s effectiveness and ensure they are getting the desired results.

The Kirkpatrick Model: A Four-Level Approach to Training Evaluation

A popular framework for evaluating training effectiveness is Kirkpatrick’s Four Levels of Evaluation. This model helps organisations assess the impact of training at multiple stages:

1. Reaction: Did participants enjoy the training and believe they learned something? While this is a quick and easy measure of satisfaction, it’s a poor indicator of ROI.

2. Learning: Did the participants actually acquire new knowledge? This is a more relevant measure but only when knowledge transfer is the primary objective of the training.

3. Behaviour: Are participants applying what they learned and behaving differently in the workplace? This level is more challenging to measure but is a better indicator of ROI.

4. Results: This is the ultimate measure of ROI, demonstrating whether the training has directly led to improved productivity or profitability.

Why Behavioural Changes Matter Most

While Level 4 evaluation—measuring results—might seem like the gold standard, there are often many factors beyond the control of the individual that make this challenging to demonstrate accurately. For instance, when evaluating sales training, you would need to account for both external variables (e.g., economic conditions, competitor activity, supply chain issues) and internal factors (e.g., KPIs, incentive schemes, management support).

Given these complexities, Level 3 evaluation (behavioural change) is often the most practical and indicative measure of training success. If the behaviours being measured are closely tied to business success, tracking behavioural shifts can give a clear picture of your training’s ROI.

A Step-by-Step Guide to Measuring Training Impact

To ensure your next training program delivers value, follow these steps:

1. Define your desired outcome:

   • If your only goal is to measure participant satisfaction, use a Level 1 measure.
   • If knowledge transfer is your main objective, use a Level 2 tool.

2. Identify the specific behaviours that participants should exhibit if the training is successful.

3. Measure these behaviours both before and after the training. Use a numerical scale (e.g., 0 for rarely demonstrating the behaviour to 3 for consistently demonstrating it at an exceptional level).

4. Calculate the percentage shift in behaviour and relate this to the investment you’ve made in the training.

Maximising ROI with Behavioural Metrics

By comparing different cohorts, workshop designs, and training providers, you can prioritise your investment in programs that deliver the most significant behavioural shifts. This will help eliminate the 50% of training that might otherwise be wasted, ensuring that every training initiative contributes positively to your organisation’s bottom line.

About Excel Communications     

Excel Communications is a learning and development consultancy based near London in the U.K. For more than 30 years; we have been collaborating with clients across the globe.  

Partnering with Excel empowers you to evolve your people and business by fuelling a love for learning.   

We work with you to create unforgettably, customised learning experiences to achieve your vision of success and growth, with tangible results.   

View our case studies here.