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Training departments are under more pressure than ever to show they are impacting the bottom line, but how do you prove it? Run training like a P&L! You have two options: increase training revenue, or decrease training expense. How has training impacted your company's bottom line this month/quarter?
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Total corporate training spending fell 11% in 2008.
(Corporate Learning Factbook, 2009, Bersin & Associates)
At the same time, 73% have expanded their offerings.
(ASTD 2009 State of the Industry Report)
Total corporate training spending fell 11% in 2008.
(Corporate Learning Factbook, 2009, Bersin & Associates)
Total corporate training spending fell 11% in 2008.
(Corporate Learning Factbook, 2009, Bersin & Associates)
The number of employees to learning professionals rose from 227 to 253. (ASTD 2009 State of the Industry Report)
At the same time, 73% have expanded their offerings.At the same time, 73% have expanded their offerings.
(ASTD 2009 State of the Industry Report)(ASTD 2009 State of the Industry Report)
Total corporate training spending fell 11% in 2008.
(Corporate Learning Factbook, 2009, Bersin & Associates)
Total corporate training spending fell 11% in 2008.
(Corporate Learning Factbook, 2009, Bersin & Associates)
In down
economies,
Training and
Marketing tend
to be the first to be
Can you answer the
““How much has How much has training helped training helped the bottom line the bottom line
this this month/quarter?”month/quarter?”
““How much has How much has training helped training helped the bottom line the bottom line
this this month/quarter?”month/quarter?”
question:
Only one out of ten
Learning Executives
measure the dollar
impact of training
on the business.
(source: CLO Magazine, 8/20/2009)
The Options
Increase Revenue
1
The Options
Decrease Expense
2
Increase Revenue
We know intuitively that training helps the bottom line.
how do you prove it with a
specific dollar amount?
What is the Goal of the Training?
The 6 Basic Training Goals
Increased
Production
The 6 Basic Training Goals
Increased
Production
Increased Customer Satisfacti
on
The 6 Basic Training Goals
Increased
Production
Increased Customer Satisfacti
on
Decreased Error Rate
The 6 Basic Training Goals
Increased
Production
Increased Customer Satisfacti
on
Decreased Error Rate
Decreased
Onboarding Time
The 6 Basic Training Goals
Increased
Production
Increased Customer Satisfacti
on
Decreased Error Rate
Decreased
Onboarding Time
Decreased
Turnover
The 6 Basic Training Goals
Increased
Production
Increased Customer Satisfacti
on
Decreased Error Rate
Decreased
Onboarding Time
Decreased
Turnover
Decreased Litigation/Clai
ms
Step Two
Isolate the Effects of Training
77%
Final ImpactAssuming
the program
is held
once per
month with
an average
of 8
employees… … each program yields $2,584 in additional revenue over the first six weeks.
… each program yields $2,584 in additional revenue over the first six weeks.
Profitassumesthatexpense
sremainrelativelyconstant.
Expenses are covered in a
later presentation.
From here you can calculate a Benefit-Cost Ratio and arrive at an ROI.
