For Paul Kearns, Senior Partner at Personnel Works and a leading authority in the field of performance measurement and evaluation, being an HR or training professional means justifying your existence on a regular basis. For many who shy away from using numbers in their daily work, this is steadily becoming a more and more pressing issue, as the need to calculate a return on investment (ROI) on HR and training activities grows stronger. One key factor which is pushing the emphasis onto ROI is the introduction of e-learning, and the sizeable investment often required for companies to introduce an e-learning strategy. Can you justify the cost? Can you explain what you expect to gain from the training you arrange, or quantify for companies how your intervention will impact on the business. TrainingZONE asked Paul to explain why it's all about 'putting a pound sign against what you do'.
TrainingZONE: Why do people have such a hard time doing ROI?
Paul Kearns: It goes back a long way. If you trace the development of the Training and Development function, it's still relatively new, having only come into being around the end of the 1970s.
Every company has had to do training since the year dot, but it's evolved over time. What looks like a natural progression from 'how to' training, say, on a production line, to soft skills development and management development isn't really that - the types of training are actually very different. It's far more difficult to track down whether the soft skills training works. In addition, evaluation was not issue in the past - hence no-one developed a systematic way of doing it. Because of this it tends to be skirted around. The most telling point is what I call 'the conspiracy cock-up theory ' - i.e. mistakes are either a conspiracy or a cock-up. This also applies to training - there's no real conspiracy, but there has been complicity between training departments and managers. Managers don't want to get bogged down in developing people - trainers say, we'll organise courses for you. It's a mediocre approach, and in the last ten years, it's not been good enough, when companies are under pressure to improve all the time.
TrainingZONE: You briefly mentioned evaluating soft skills - why do you think there's been a particular problem with this?
Paul Kearns: What I've learnt from evaluation is that you have to be absolutely clear about your objectives. With soft skills, the objectives put forward by trainers tend to be very nebulous. I take the view that there is still a mindset in the last few generations of trainers that 'I must be designing and delivering programmes' rather than setting objectives.
There's still a belief in organisations that if you need soft skills development, you must go on a soft skills development programme, but it just doesn't happen in two or three days. For example, you take a manager of a team of 10 or so people who isn't particularly liked by the team. He or she needs to develop their soft skills, so the training department sends them on a course, which is a waste of time on its own. We need to ask, if we develop someone's skills, what will it mean for their impact on the business?
If you just evaluate courses, you're on a hiding to nothing - development is more than sending people on courses. You need to measure in advance. There's no point in measuring the number of training days, and measuring the cost of training doesn't tell you anything. I would rather have 10 people on a course who want to be there than 50 who don't.
TrainingZONE: Isn't it the case that people shy away from dealing with issues around poor soft skills, because it appears to be personal? The manager of that manager doesn't want to confront the issue...
Paul Kearns: Yes, it's easier to pass the problem over to the training department, to abdicate responsibility to develop your own staff. It's a joint problem for the manager's manager and the training department - to help this person to articulate how they think they're going wrong.
One of the biggest reasons trainers find it difficult to evaluate is because they're working to the wrong model. Many use the four level evaluation model, also known as Kirkpatrick's model:
level 1 - Delegates immediate satisfaction with the course - 'happy sheets'
level 2 - Did you learn anything? - the testing level
level 3 - Did you put learning into practice?
level 4 - Did it have any impact on the business?
Most trainers will refer to this, but will struggle to evaluate soft skills at the fourth level, because they didn't specify objectives at the beginning. Without having done this it's almost impossible to work out.
The equation to use is:
ROI = benefit-cost/cost x 100%
What people struggle with is quantifying the benefit, but if you break it down into small chunks - estimating the value of the effect of developing each individual in a certain way, it's easy to estimate.
When I was working as a training manager, I didn't realise this was an area no-one had got to grips with.
TrainingZONE: Do you think that HR and training have come late to the idea of justifying their existence, compared to other organisational functions?
Paul Kearns: I think it is the case that HR and training have arrived at these tough questions much later than other departments - they've avoided them, or tried to make it look like they're doing it by coming up with headlines from surveys or happy sheets. They're not asking the 64 million dollar question - if we do this, where are we going to see an improvement? All the CEO really wants to know is, are staff trained well enough to give a good service?
With regard to trainers, I think most haven't got round the concept of competitive advantage. In today's economy, where anyone can get hold of the latest technology, it's the people that make the difference, and trainers have a large part to play in this. I'm always surprised to see trainers sharing ideas on a regular basis - if you're giving it away, it can't be worth anything! The reason they do this is because they haven't asked themselves what it's worth.
At a recent HR benchmarking group I attended, people were reluctant to produce data on which they could compare themselves, because they were afraid it might show up faults. Applying business metrics to HR and training needs to be a positive step, people shouldn't go on the defensive.
TrainingZONE: Your book, Maximising Your ROI from Employee Training, is intended for a financial/operational management audience - what about trainers?
Paul Kearns: The book talks the language of business but you can't just address the finance manager, although they need to be able to see training as an investment as well as an overhead.
Which is where e-learning comes in in bringing ROI to the fore - it's causing many training departments to look for the first time at investment in training, because it requires a substantial up-front investment to set up which needs to be supported by a good business case.
The positive thing is that training can potentially give the biggest Return on Investment than any other development in the business. If they get it right, trainers can tap into the huge potential of people. Finance directors generally only expect a 25% return on investment, but training can potentially offer 50 to 100% - most finance directors would be very happy with that!
There's also a definite need for training professionals to develop their numeracy skills in order to get to grips with ROI- there's a fear of figures for many.
Paul Kearns can be contacted via e-mail.
A number of books written by Paul Kearns, including Maximising your ROI from employee training, Measuring and managing employee performance and Making training and development pay (with Tony Miller) can be bought from the Blackwells Bookshop on TrainingZONE.
