Few people would argue against the benefits of training your staff, but many don’t know how to effectively measure the benefits of training. Businesses report that building capabilities is a top-ten priority, but only a quarter report being effective at it, and an even smaller number, 8 percent, actually track the return on training investment.
In a study of more than 3,100 U.S. workplaces, the National Center on the Educational Quality of the Workforce (EQW) found that on average, a 10 percent increase in workforce education level led to an 8.6 percent gain in total productivity.
Quantifying the benefits of training staff on how to use various business tools and processes can be difficult. This includes training them on your online tools too, like Magento. Sophisticated tools can generate powerful results when effectively utilized. But how can you measure the impact of training your staff? In this post we will explore some formulas you can use for measuring the effectiveness of training.
Trained employees perform more efficiently than untrained employees; to fully understand how much more efficiently employees are performing, you will need to measure pre-training performance with post-training performance.
There are a number of areas that can be directly impacted by training, and these can be measured. Each area has different ways of measuring results:
- Less absenteeism/tardiness (hours of increased production × dollars per hour)
- Reduced grievances, claims, accidents (dollars saved on paperwork, actions, medical claims, insurance, and lost time)
- Avoiding the need to hire new employees (salary and benefits savings)
- Faster work rate (dollar value of additional units, sales, etc.)
- Time saved by not waiting for help (hours saved × dollars per hour + hours of helper’s time saved × dollars per hour)
- Decreased downtime (dollar value of reduced non-productive time)
- Improved Quality and less scrap produced (dollar value of scrap × decreased scrap level)
- Fewer rejects (dollar value of reject × decreased reject level)
- Improved market share (percentage increase in market share × dollar value of increase)
- Shorter lead time to reach proficiency (hours saved × dollars per hour)
- Less time required to perform an operation (hours saved × dollars per hour)
- Less supervision required (supervisory hours saved × supervisory pay per hour)
- Better management of time (hours freed × dollars per hour × opportunity cost of freed hours)
It is important to ask what kind of employees you want; trained ones, or an untrained ones? Do you want a team that knows how to use the tools at their disposal and consistently implement best-practices that lead to strong results, or do you want an untrained team that doesn’t know how to fully utilize the tools at their disposal and employ bad habits that lead to mediocre results?
So, although it is sometimes difficult to quantify the benefits of training, few would argue there is little or no benefit. For those that are serious about measuring the impact of training, start collecting data now. The additional data will make calculating training ROI more meaningful.
