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Training : How to improve Return on Investment ?

The fast pacing transitions calls for the management to adept its employees to meet the changes effectively. This induces the management to invest a huge amount of its income on training with the intention of improving its profitability. It is said that an approximate amount of 2% to 10% of the total payroll is spent in providing training to its employees. With such a huge investment made on training and with the economic crunch the companies are facing, steps to analyse better ways of gaining return on this investment is vital.

The first measure that is to be taken by the management is to ensure that the objectives that are to be attained are well-set and well communicated to all its employees. Every action taken within the entity must be directed to the attainment of its objectives. These goals must be broken down to various competencies and the right person with the right profile must be selected to the task in hand. The employees must be competent to face the targets set before them. In the fast moving world, with the technology gaining advancement at top speed, growing up to face these challenges require proper training. The management must be convinced of the need for the same and ensure that the training objectives coincide with achieving the overall objectives of the firm.

The training effectiveness can be measured by analysing the impact employee performance has on the set objectives after the training program. Employee contribution to the task allotted to him speaks a lot on the skills that he acquired through training. For example, the number of lines of code that he is able to work on or the deals closed by him can reveal the impact of training. This is dependent on the candidates called for the training. The employees selected for the training program must be analysed on the basis of the gist of the session. The message that is to be conveyed through training must coincide with the work done by the employee and his role in the particular task. Specialised training on the employees picked at random without an end in mind will result in a loss of time and resources.

The effectiveness of training depends on its successful implementation. Support from all the levels of the management is crucial for the implementation of the knowledge gained through the training. The top management must have a positive outlook to the changes that might be brought into the system after training. They should also pave the way for its successful implementation by providing necessary tools and resources for quick execution. Proper motivation and reward programs can go a long way in effective utilisation of the essence of training.

ROI can be calculated by the company through a cost-benefit analysis. The time taken by the company to cover the cost incurred on training or the payback period can also reveal the ROI on training. The cost on training including the loss of time must be properly budgeted for.

The ROI on training is experienced through better productivity, reduced employee turnover, better innovation, and other benefits. A study on the top 50% of those who undertook training in Accenture is said to have revealed the following:

• 17% more productive
• Perform at 20% higher levels relative to their peer group
• Stay with the company 14% longer.

If effectively used, training can be made a successful tool in the hands of the management.

Comments Listing
Posted: 06/02/2012 00:43:38

Nice article! I enjoyed reading.

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