Boosting training ROI; lowering costs

This article was written for Xpertise's regular e-mail Skills Bulletin newsletter.

Word count: 930 words

Well, that's the sort of headline designed to get your attention: more training for less money. Yet this training Nirvana isn't so difficult to attain - we look at how it can be done.

The key to knowing that you're getting a better return on investment (ROI) is, of course, being able to measure the value of the change created by learning. Simple in theory, but harder in practice.

At one level, measuring ROI can cost more than the benefits you're measuring - and is, essentially, pointless. This is especially true where you have a small number of courses, bought off the shelf. These are ready-made products, delivered at a keen price-point. They are also 'one-size fits all' - which is how they can be engineered to that keen price point. It's not likely that you'll invest the time and effort to measure ability or task time before such a course, do it again after and then spend a few hours measuring the results. The measurement equation is simpler. Before: "I need to know how to do X, so I can do my job properly. I try to do X now and it takes me ages because I'm trying to work it out on my own." After: "Now I've been shown how to do X, it's easy, and I now do it every day. What's more, I'm learning how to do Y and Z too."

This isn't too different from buying a book. You're stuck doing something - you could probably figure it out on your own, but you might not learn the most effective way to do it. You buy a book. The information you really need is in one chapter, but of course you have to read the whole book. After, you can do the previously difficult task with aplomb. The book cost £20.00. What's the ROI? Well, if you couldn't do it before, it's 100%. Good value. If you picked up other stuff that you didn't expect, the ROI creeps up. This is 'cost-based measurement'. But what if that simple task saves you A LOT of time and money? Perhaps you learn how to do something in half an hour, which previously took an hour. Then the ROI is based on how many times you're EVER going to do that (or do that task within a defined period, perhaps a three-year write-down of the investment), the total time saved, and the value of that time in chargeable pounds and pence. Wow - that's a way bigger number than 100% - all for £20.

A couple of points here. First, it's hard to measure what you don't do. Once you learn how to do something, most people can't recall how long it took 'the wrong way' - you immediately adapt to the new efficiency. Second, that's a lot of measuring work for a single fact from a £20 book. You could loose the rest of your life to measuring the impact of what you learn.

So at that level, the single book, the single course, the certification track, it can be counter productive to measure individual ROI. Thankfully, organisations such as Microsoft have sponsored such research, so generic figures are available: benchmarks which we can reasonably expect to be generally true. And in any event, the need is just like our book analogy: immediate. You can't do something well, or at all, so you need to learn it.

Once you raise the number of people being trained, this reality shifts. It becomes possible to effectively measure ROI. A few more people and it becomes worthwhile. A lot more people and it's probably necessary in order to secure the training budget!

But if we take all of those people back to the same standard course (or book) then we've still not grasped a huge possible beneficial. If we assume that these people all need to learn the same thing, then we're probably in a position where we have more options than simply taking an off-the-shelf product. We can have something tailored to what we really need. And this is the key to reduced training costs and more effective ROI: learning just what we really need to.

In a real-world example, it's not unusual for a group of say, fifty, IT professionals from a single organisation to learn a new product. It might be Windows 2003 Server. It might be .NET. But what they need to learn is quite specific, because they'll be using it in a specific and focused way: they'll only need a linear part of the feature set, to be applied on predictable tasks. The topics they need to learn span perhaps three standard courses. So that fifteen days' training for fifty people - seven hundred and fifty days' training. That's quite a cost, and quite a lot of time out of the office, so a not insubstantial opportunity cost, too. But if we look at the topics required, we can select just those, add a customised introduction and conclusion, some company-specific labs, perhaps some coaching and follow-up, and we get the total down to around five learning days per person. That's a more palatable two-hundred and fifty days' training. Of course, there is a cost to doing the customisation and also to managing the training project, but we're still looking at very substantial savings. Saving money isn't the only benefit of ditching what we don't need - the learning has also become much more focused. Learners are not distracted by subsidiary topics - they just get what they need. This is a bit like an OXO cube - concentrated learning, more flavour in a lot less space. So, much better ROI.

And, fantastically, because we're dealing with a reasonable number of people, with a known set of current skills and a defined set of required skills, we can measure before and after. Because they're going to apply those skills to defined tasks, we can also measure the benefit to the business - and covert that into a meaningful value: either a percentage of productivity or even a monetary rate.