The process of measuring ROI can be summarised in these 6 steps:
#1. Define the business need
Whether it is to improve the skill of the sales force in closing new deals or their ability to manage existing relationships,
it is important to ask; what business challenge do I want to address?
#2. Determine the programme solution
There are a number of different interventions that can address business needs, only one of which is training. To achieve a positive ROI, it is important to determine that the business need can indeed be addressed by the intended L&D intervention and that training, for example, is the appropriate solution.
#3. Determine the training outcomes
Always refer to the business need the training is intended to address. Identify the outcomes the training should accomplish and ensure they are in line with the business need. Ask yourself: what will the training ultimately achieve? What will be the outcomes for the trainees and for the business?
#4. Design the training programme
Irrespective of whether you are designing and delivering the training in-house, using consultants to develop the programme, or sending an individual or group of employees to an existing online or in-person course, you need to understand what type of training is compatible with your target audience. You must also be aware of what type of activities should be included and what support is available or should be in place after training to ensure learning is transferred to the workplace. Finally, you should be able to determine if the design can achieve the outcomes you need to achieve.
#5. Define measurement metrics
This is the all-important question — How will success be measured? In defining metrics, you need to revisit the training outcomes in step 3 above. For example, if the intended outcome of a training programme is to close new sales deals, the metric to measure success could be the number of new sales deals closed. Beyond defining metrics, it’s just as important to determine how the metrics will be tracked.
#6. Execute the training and measure ROI
After the training, track the metrics defined in step 5 above. However, keep in mind that results will not be immediate as participants need time to apply the skills and knowledge acquired. Results can be measured at pre-determined intervals, say quarterly, or even monthly, depending on the programme.
It is also important to consider that business results will not solely be a direct outcome of the training. There are other factors that contribute to business results in the period after training, hence the need to carefully isolate the real programme effects on the business outcomes.