4 Responses

1. Turnover data and metrics
   Hi Garry,

   I was just about to comment on your other post at http://www.trainingzone.co.uk/blogs/garry-platt/platt039s-puzzlings/turnover-costs-summary when I spotted this one as well on a similar topic.

   Those turnover data were exactly what I was looking for, though my first reaction and gut feeling is that some of the numbers are very high.

   I’ll definitely be adding that book to my wishlist, but regarding identifying the metric – assuming we’ve decided that ROI is a valid and useful metric (amongst others) – we often come back to the crutch of 1) reducing turnover (if we can figure out its real impact, as people don’t just jump ship only because of lack of training, especially in these times) and 2) increasing productivity (assuming their time’s then going to be used well and profitably).

   In the sector of language training, which is similar to many other soft skills, we put together an Excel spreadsheet to calculate the training ROI – it’s at http://www.tjtaylor.net/resources-tools2.htm if you’re interested.

   With the exception of sales and quality training, which can be reasonably easily monetised, how confident do you feel in identifying and measuring metrics that can be converted into a monetary value for pure soft skill training programs?

   I’ve noticed that you normally tell it how it is, so I’m curious about your opinion.
   Alex

2. Credibility
   For me the credibility of any ROi is all based in the performance gap analysis and the subsequent training needs analysis. If this is half baked or insignificant then the results will be almost certainly half baked and insignificant.

   If we do a thorough analysis we can be as sure of the metric as H&S, Marketing, Sales, Quality etc etc can be confident of their facts & figures.

   Thanks for the excel reference, I was actually already familiar with it. I have in fact produced my own ROI calculator which I distribute to participants on my Master class workshops which I run on behalf of Fenman. It’s different to your own and can also be used as a forward project planner.

   Jay Cross. A quote from his recent book: ‘What Would Andrew Do’.

   ‘“Proof is a figment” Otherwise brilliant people assure me that it’s impossible to isolate the impact of training. You can never tell whether some concurrent event has contaminated the results and negated their value as scientific evidence of training’s impact. To which I reply, “Baloney!” (Not an exact quote.) All quests for certainty in our uncertain world are futile. Business decisions are made with less-than-perfect information; it comes with the territory. Management is not conducting a science class – it’s looking for results.
   So the question is not: How do we prove beyond a shadow of a doubt that a given training program produced a given result? The question is: What will our sponsor accept as persuasive evidence that the program produced the result? Working with strong probabilities, we proceed to make our case logically – linking learning to business results. Establish a causal link between a particular skill deficiency and a particular business outcome. If the owner of the problem buys into this logic and the way you will measure it after training, that’s all the proof you need.’

   Book details here: http://www.lulu.com/content/7196453

   And to finish, one final quote from Arriffin Mansor:

   ‘Training is a social science, it is obviously impossible to evaluate the effects of training with laboratory and test tube precision. Just like any other business decision, we have to live with assumptions and informed analysis, not absolute examination and medical scientific rigour. If we accept ROI in general business terms, how could we not accept ROI in training?’

3. Parallels between training and marketing outcomes
   Thanks for your very interesting reply.

   So extrapolating from the last quote, we’re never going to get certainty and hard numbers because we’re people – beautifully creative, irrational human beings. Luckily, the QA department doesn’t have that problem (I’m joking…)!

   In many ways there seem to be parallels with that quote about advertising – “I know I’m wasting half of my advertising budget, I just don’t know which half” – and in my opinion there is more than a cursory lesson to be drawn from marketing theory in terms of measuring outcomes – marketing that leads directly to a sale versus brand awareness, footfall and number of customers entering a store versus actual increase in sales.

   In terms of where I’m coming from – the engineer in me wants nice neat formulae, the human capitalist in me wants more of a ‘hard numbers and serious science’ academic based foundation to developing people, but the pragmatist in me says that introducing people and their choices into the mix will always produce a range of probable outcomes, sometimes strenuous connections between inputs and outcomes, and a range of assumptions that are more or less defendable.

   Time to get some reading in.

4. The Fiddle Factor
   In some organisations the final ROI figure is calculated with an agreed negative ‘fiddle factor’. In other words a manager speculates that not all the benefits accrued can be attributed to training and consequently an agreed contribution percentage is set and the ROI figure adjusts accordingly.