5 Ways to Measure the Value of Corporate Training

I was at a summit of Chief Learning Officers (CLOs) and one of the most common challenges they mentioned was the need to demonstrate a return on investment from training. Unlike investments in "hard" assets like facilities and equipment, investments in "soft" skills through training can be hard to calculate. At budget request time, CLOs can find themselves at a disadvantage to their colleagues who can point to more easily measured improvements in their operations. Here are five ways that CLOs can communicate the value of training in a concrete way.

1 - A/B Testing - One of the CLOs described how he rolled out training to call centers in a controlled testing way. The company decided to invest in training their call center employees in new soft skills like showing empathy and de-escalating emotional conversations. In the roll out, the CLO held off training one call center to be the control in the experiment they could use to isolate the effects of the training. After the training was delivered, they tracked changes in key metrics like customer satisfaction, retention rates, and employee turnover at each of the call centers. Because they kept one call center out as the control in the experiment, they were able to claim the improvement in metrics was due to the training.

Implementation Tip - Ensure the internal clients agree with your testing plan, especially that the site picked as the "control" in the experiment is comparable to the other sites. Plan to roll out the training at the control site at a set time - e.g., 6-12 months later.

2 - Tie to Performance Appraisal Metrics - Since employee appraisals often have common competencies that are scored across all employees, they can provide a way to quantify a "before versus after" impact of training. Identify the competencies that a training is aimed at improving. Gather and compare the before versus after scores on those competencies for training attendees. Compare the change in scores to a similar set of employees that have not had the training (i.e., your "control" in the experiment.) If you have had enough employees go through the training, the comparison can be a solid way to show results on competencies that matter.

Implementation Tip - If you have a hard time mapping a training to competencies your employees are measured against, reconsider the training in question to find one more directly applicable.

3 - Compare it to the Compensation of Students - Identify the cost of the training per person trained and the average annual compensation per person trained. Express the cost of the training as a percentage of their compensation. For example, if a training costs $1,000 per student and the average annual compensation of students is $50,000, that means the training represents two percent of their annual cost. That two percent becomes the one-year "break-even" point for the training investment. That means that if it sounds reasonable that the training will make the students at least two percent better at their job on average, the training is a positive investment.

Implementation Tip - The investment in training is a one-time cost but the benefits should last more than just one year. Comparing the one-time cost to the combined compensation over multiple years can make the break even point be much lower.

4 - Ask Students to Appraise Value - After the training is completed, ask the students to assess the value they received. Beyond the usual survey questions, ask them how much they would pay to get that training. Give them a few relevant costs as reference points, like the average cost of a college course or other corporate trainings they are familiar with. Those will give them comparison points to set a value on the training. While not scientific, they may provide a useful customer insight with dollar signs attached.

Implementation Tip - Choose your reference points wisely. Find one that everyone goes through and can relate to, such as new employee orientation or mandatory trainings.

5 - Get Key Student Testimonials - In the post-training surveys, ask students if they would recommend the training to others. Ask them to write a sentence or two that you can use as a recommendation for others to take the course. Just like customer testimonials are important on many consumer purchases, use those testimonials to demonstrate the value of your training courses.

Implementation Tip - Keep a running list of all the employees you have trained and identify the ones over time who rise up through the organization. Highlight those testimonials when discussing the value of your trainings to show a senior level of support.

Fighting for training dollars at budget time can be stressful for everyone, especially Chief Learning Officers. It can seem impossible to point to a concrete return on investment calculation for a new training in soft skills. The best way to show the expected return on investment from a new training can often be to point to the historical results from other trainings like it.

About the Author: Victor Prince is a Certified Executive Coach, a Critical Thinking Trainer, and a bestselling Leadership Author who teaches strategy, communication, and leadership skills to clients around the world. He has over 100 articles on LinkedIN. Earlier in his career, Victor was a consultant at Bain & Company, a marketing executive at Capital One, an analyst at the Central Intelligence Agency (CIA), and the Chief Operating Officer (COO) of the US Consumer Financial Protection Bureau. He has an MBA in Finance from Wharton. Learn more at www.victorprince.com.

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