ROI FOR TRAINING
In our competitive global economy, your budget for training is always under attack. Either you are struggling to manage a growing pool of customers while simultaneously hiring the staff to do the work, or you are cutting costs to survive the latest challenge. Are you ready to make the case for how training dollars contribute to your company's bottom line?
Researchers in MIS Quarterly (Sep 2014, Vol 38, No.3) make a strong case for the return on investment (ROI) in the global Information Technology (IT) services industry. Mehra, Langer, Bapna, and Gopal studied data from 32 small and medium IT services firms in India - the home to over half of the world's global market for IT services and produced data-driven evidence - on how much ROI was created for the company for each training dollar spent.
WHAT IS TRAINING WORTH?
This research showed that the median company analyzed achieved a return on investment of $4.67 in revenue for every $1 spent on training. They also found that this return on investment would vary between $1.82 and $13.91 depending on the companies training effectiveness.
HOW TO MAXIMIZE YOUR ROI FOR TRAINING
The key to effective training is to perform an effective training needs assessment. An organizational analysis starts with identifying your company's needs. Analysis of your people will clarify your people's needs. Task analysis will combine this information to identify where to focus your training to achieve maximum organizational benefit.
HOW MUCH TRAINING IS ENOUGH?
Mehta and his colleagues suggest that about half your human resources budget should be spent on training. This provides a simple benchmark to assess your companies training budget. If you are not spending enough on training, you are missing one of the most affordable ways to boost your companies revenue.