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Stella Collins

Stellar Labs

Chief Learning Officer

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Value of training?

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Radio 4 just said that companies who invest in training can experience a 70% increase in profit.  This was a statement on the You and Yours programme and related to customer service training.

What value do you think training brings?

What other figures are out there about the value of training people?

5 Responses

  1. Straining credibility

     My experience is that roughly 98% of quoted statistics have no factual basis. 

    Of course companies can experience enormous increases in profit if they invest in training. Companies can experience a lot of things, but the question is, what is their realistic ROI for doing so? The "70%" statement raises a whole laundry list of questions: 

    • What kind of training? Functional? Technical? Personal skills related?
    • Is this true for all industries and across all functions? 
    • At what cost comes the investment in training at the expense of other potential investments? 
    • Is profit the only measure of success that we’re looking for with training? What about employee engagement and satisfaction? What about customer satisfaction? 

    Even though I’m equally enthusiastic about the benefits of a well-designed and executed training program, I don’t see how statements like the "70%" help convince companies that they should invest in training. If anything, it strains credibilty to the point that companies become very skeptical when it comes to training. 

  2. measurable success

    Hi Stella,

    I’ve only once had full co-operation of a client to do a ‘proper’ ROI and that was around 10 years ago with a debt-collection call centre. It was fantastic as the results spoke for themselves: Satisfactory service levels pre training were 57%, whilst approx 6 months after training it was 97%. I must point out thought that other things were put in place too like restructuring of teams and allocation of work, which would have contributed to this too. 

    At the same company, we put in a PROPER induction programme (you know how I love those!) rather than just 2 days systems training and then onto the phones. The agents who had been through the new induction programme collected 12.5% more debt (on average) than their more experienced colleagues.

    So yes, training absolutely works, and its good for business

    Sheridan Webb

    Keystone Development – Experts in Induction

  3. Value versus RoI

    We developed a robust analysis tool at the Learning & Professional Institute (LPI) to analyse the value-add that learning can provide. This tool establishes the value-add upfront (compared to RoI which is afterwards), and the recommendation is that, unless you get a ratio of at least 1.5:1 (i.e. an "RoI" of atleast 50%) you should question the value developing the intervention.

    In other words. you should look for a minimum of 50% return on any programme. That’s because. as a rule of thumb, other programmes will give you at least this level of pick-up and therefore there is a high probability that you are sub-optimisimg your resources if L&D is directed to undertake a low value-add programme. 

    The value-add methodology looks at both types of learning intervention (performance related or compliance) and that ishows that it is possible to apply analytics to multiple types of learning.

  4. Interesting Observation

    Hello Alan, that’s an interesting quote: "That’s because. as a rule of thumb, other programmes will give you at least this level of pick-up and therefore there is a high probability that you are sub-optimisimg your resources if L&D is directed to undertake a low value-add programme."

    Can you tell us how you have reached this figure and analysis, in other words what is the data and evidence upon which this ‘rule of thumb’ is based? 

  5. Value Methodology

    It’s based on a number of value-add srudies we have done through the Institute using the Value-add methodology. Because the methodology is easy to use, you can run a number of "what-if" scenarios, and, if the return isn’t there, it’s worth looking at different scenarios to compare different ways of developing the learning intervention. There are always options worth exploring!

    Anyone with access to the Institute’s Training Professional site can find all about the methodology on http://www.thetrainingprofessionalnetwork.com.

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Stella Collins

Chief Learning Officer

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