How to get a return on your (training) investment

Organisational Development - Comments Off - Published on January 5 2012

A recent article by Robert Terry in the Financial Times (FT) complains that, despite the significant sums spent annually on training and development by companies, very little of what is learnt translates into improved performance in the workplace. Studies shows that only 5-20% of the learning from training has any impact on the business. Given the current obsession with measuring everything against business targets, this is puzzling if not shocking. “Surely” Terry suggests “a training industry that delivers less than 20 per cent cannot be fit for purpose.”

He is right. Much of the training delivered globally, within companies or by universities, is probably ineffectual. Yet still many organisations fail to measure the impact of training on the business and individual performance. Terry suggests that one reason for this is the lack of any participation or involvement of line managers in individual staff development. He argues that managers fail to take responsibility for the learning and development of their staff and should be held to account for the transfer of training to the workplace. Trainers should also be more concerned with the application of training and how it will benefit the business.

As a leadership development specialist I take this issue very seriously and have long been promoting various approaches which help to ensure that companies and individuals get a return on their investment in training and development. First let’s look at business schools and the MBA – generally considered to be the leading international business qualification. I am a strong advocate of the MBA, but, despite the considerable cost of tuition, there is surprisingly little evaluation of how the qualification benefits business or its impact on individual performance. Many employers express the concern that MBA training is too divorced from the reality of business. Some are also reluctant to sponsor employees to take an MBA because of the risk that, once qualified, their employee will be off to find a higher paid job with better prospects. Many companies attempt to manage this risk by ‘tying in’ the employee with a contract requiring them to stay with the company for a certain period after qualifying. Well, it may stop them leaving but does this restraining order really help employers to get the most out of their highly qualified senior staff?

To be sure of a better payback, employers need to take a more considered approach to MBA sponsorship. I have always encouraged employers to address the following questions. Which employees would you select to support through their MBA training and why? How can the business get the best return from investing in MBA training? What are your long term plans for the development and progression of your most talented employees? While these employees are training, or when they are qualified, what new opportunities and challenges are you able to offer them? How will their new learning be applied in order to benefit the business? Dealing with these questions will not only keep senior staff motivated and engaged but will also help to ensure that employers realise the full value of MBA training.

Then there is workplace or corporate training. How do we improve the transfer of learning in this context? It’s true that some managers are too ready to shirk their responsibility for staff development, turning to HR to solve their performance problems with the wave of a wand or the provision of a 2 day training course. When I am asked to provide management and leadership training I spend some time during the planning stage with the CEO, line managers or ideally the management team. The aim is to get an understanding of the business, the people, the challenges they face and any specific performance problems so that I can make what I deliver as relevant and meaningful as possible. I want them to see my participation as an intervention in their company’s business process, picking up on what is already going on and developing ideas and actions for implementation in the future. It is essential to get the manager’s or CEO’s commitment to deal with any follow up and to support further development after my input. That way the training and development doesn’t end when I walk away.

Measuring the impact of training on business performance isn’t easy. But with a considered approach to staff development, the involvement of managers and input from trainers who are concerned with the application of learning, the returns can be considerable.

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