“If you cannot measure it, you cannot manage it” – Peter Drucker

Why is Training Measurement Crucial?

Imagine this scenario:

You’re walking the halls of your office, admiring the patterns on the carpet… deep in thought about that big project you’re working on.

Suddenly you’re interrupted as a shadow dances in your direction.

You glance up, recognising one of the leaders of your organisation heading your way.

No problems, you think to yourself, I’ll just flash them a smile and be on my way.

But before you pass, they stop, turn to you, and ask one of the following questions:

• “Just quickly, out of all of our training programs, which is the most effective and do we know why?”
• “Do we have an idea of the return on investment our business gets back from learning activities?”
• “Could you give me a ballpark cost of training entry-level staff, versus specialist or managerial staff?”

“Do we have a forecast our training needs and costs for the next year? Or 3 years? Or 5 years?”

What happens next?

Are you cool as a cucumber, or a pickled apology?

Your ability to come off as a learning and development superstar depends on one thing:

Whether you’ve made measuring training effectiveness a priority.

According to Josh Bersin in The Training Measurement Book1, only 6% of organisations frequently measure return on investment, and only 8% measure actual business impact.

The lack of measurement in training ROI and business impact is damning enough, however another measure stands out as a red alert:

Only 31% of organisations actively measure cost per student.

This indicates that the majority of organisations are not focusing on training efficiency and excellence.

Bersin’s research also sheds light on the percentage of the training budget that organisations are allocating to measurement.

The Percentage of training budget spent on measurement:

• 42% of organisations spend less than 1%
• 24% of organisations spend between 1% – 2%
• 18% of organisations spend between 2% – 5%
• 8% of organisations spend between 5% – 9%
• 8% of organisations spend more than 10%

The median spend on measurement works out to be 2.6% of the training budget.

What does mean in terms of dollar spend?

The 2014 Association for Talent Development’s (ATD) annual State of the Industry report, showed that the average spend on training in 2013 was $1,208 per employee2.

This means that on average, organisations are spending just $31.41 per annum per employee on measuring their training effectiveness.

We believe this must change!

The Case for Increasing Spend in Training Measurement

Without making a commitment to measure the impact of your training, you’re flying blindly with no direction on how to improve your people or prove your training effectiveness.

“Companies have to continue to invest in their culture, just like they would invest in any other asset.” – Walter Robb, Co-CEO of Whole Foods Market

Fortune’s 2014 100 Best Companies to Work For report3 reveals the benefits of aiming for workplace culture excellence.

These are several defining attributes of the top 100 companies (who have all made a commitment to employee development as a top strategic priority):

• 65% less voluntary turnover than industry peers
• 7.8% reported revenue growth year-on-year
• Employees 3.3x more likely to talk about their companies on social media

These results are due to high-level alignment and prioritization of the development of their people.

Unsurprisingly, the average tuition reimbursement available for employees at these companies was $7,375 each year.

610% more than the average company!

So where do you sit?

Are you investing in your people and improving your training through active measurement and optimisation, or are you being left behind? Why not schedule a call with one of our friendly training experts to see how Xapify can improve your on-the-job training.

For more information on how to develop a sophisticated talent-reporting framework for your organisation, we recommend you visit the Center for Talent Reporting and take a look at some of their exceptional free resources.

For more on compliance training see our posts on the ethics of your compliance practices and behavior based safety.

References:

• Bersin, J. (2008). The training measurement book: Best practices, proven methodologies, and practical approaches. San Francisco: Pfeiffer
• https://www.td.org/Publications/Research-Reports/2014/2014-State-of-the-Industry
• http://createyours.greatplacetowork.com/rs/greatplacetowork/images/Great_Place_to_Work_Guide_to_Greatness_download.pdf