One of the biggest challenges for development and learning professionals is being able to demonstrate to customers and clients how to measure a return on investment (ROI).
The diagram shows that capturing the effect of most things related to HR and learning is the most challenging. However, it's not impossible.
The two variables most commonly used are cost and feelings.
Costs include time, resources and opportunity cost. For example, how much time did it take to develop and deliver a workshop? How much does stationery and equipment cost? What is the cost of time spent away from work during training? How much time is needed to adapt to a new way of working?
Studies by the professional services firm Accenture, show that for every $1 invested in training, companies received a $4.53 in return i.e. 353% ROI. Online learning consultancy True Focus Media, calculated that companies utilising e-learning tools have the potential to boost learning by 50%. So it can be done, but it's challenging!
For those of you who want a formula:
% ROI = net benefits / program costs x 100
Perhaps what is easier to measure are the feelings of the participants. Sending out a survey or 'happy sheet' after the training helps you to understand the extent to which you hit your mark.
Questions to ask include, who is this for? What do we know about their current behaviour? What led to the requirement? What impact could the results have?
Whichever method you choose, they should bring about measurable, predictable and sustainable change.