Organizations in North America alone spend over $160 billion on training and employee development every year. With that type of investment, coupled with the intense focus and unflinching scrutiny most businesses place on the bottom line, one would naturally assume that the “payoff” or ultimate benefits (e.g., increased productivity and revenue) of all these training programs are being rigorously measured and monetized down to the last penny. Surprisingly, this assumption could not be further from the truth. Most organizations are not measuring the business returns on these colossal training expenditures. Even the most bottom-line–minded businesses, the ones that pinch and squeeze every penny to show profitable growth year over year, seem to be oddly accepting and complacent with their inability to demonstrate an aggressive return on their training investments.
Granted, turning all the benefits of training into solid, top-line dollar values is no easy task, but most organizations don’t even try. They collect little or no data to connect training events to employee behavior, they collect no data connecting employee behavior to business results, and they certainly never come close to building a sound ROI case for their training investments. When we look at the magnitude of the these training budgets compared to the amount of comprehensive impact studies that are being done, we are instantly faced with the irrefutable fact that otherwise smart, savvy, profit-focused organizations are sending millions of employees through training experiences, spending billions of dollars on training every year, and quite literally have nothing to show for it.
So, what’s the problem? Why do employees and their businesses end up with nothing to show for training? Why aren’t organizations making an aggressive and determined attempt to measure and report the true benefits of their training programs? The short answer is simple: They lack the expertise and confidence to present their results to senior business leaders. In a recent study, it was estimated that over 95 percent of organizations feel the real need and urgency to demonstrate the impact and bottom-line value of training, but fewer than 5 percent feel confident in their ability to measure and report that very same business impact. The paradox is that ROI numbers are so important to the business that most training organizations are too afraid to present them. They want to get it right so badly, and they are so afraid of getting it wrong, that they end up presenting nothing! This paralysis and lack of data are quickly interpreted as ineffectiveness and only fuel the notion that training doesn’t work and is simply a frivolous waste of time and money.
Let’s face it: We can never get better training budgets or gain respect at the C-table if we present nothing. Imagine going for a job and submitting a resume with no previous accomplishments and no clear description of the value you will add, and then in large, bold print, your salary requirements! Can you imagine going to a bank and asking a loan officer for money to open a new business and promising nothing in return? Can you imagine going in front of a judge to plead your case and presenting no hard evidence? In all these cases, you’d either be laughed at or escorted to the door. While I exaggerate a bit, the reality is that when we don’t present any benefits of training and employee development, we leave top executives and decision-makers little choice but to dismiss our requests for spending and drop us to the bottom of their priority list.
The ultimate message here is that you must conduct your business impact and ROI studies. You must prove, at least with some of your programs, that they bring bottom-line value to the organization. You’ll be surprised how appreciative business leaders are to see that you’re linking your initiatives to the metrics they really care about. They’re not looking for perfection; they’re only looking for progression. I remember when I first started conducting and presenting these impact studies 15 years ago. I was far less confident, and the methods and reports were far less polished. But even then, I remember how excited and receptive top executives were to hear any type of ROI estimates coming from the training groups that were historically silent. Invest some resources into measuring your results and presenting your findings; it may be the best ROI you ever have.