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Friday, July 27, 2012

Learning through Application for Return On Investment

As we develop new curriculum for our clients, we have put an incredible amount of focus on moving them from "training for training sake" to training for a documented return on investment.
Today I thought I would share a few of the elements that you might look for or create for your training efforts to drive a return on investment.

  • First determine your organizational and individual training needs. Then you can match the curriculum with those needs.
  • Create a charter for application of the training in their facility. This should include the task that will be used to apply the learning points from the curriculum and the expected return on investment from completing those task.
  • Ensure that this charter is approved and owned by both the student and their manager.
  • Verify that those that will be affected (above and beyond the student) by the training application work are aware and properly motivated. This could be operators, maintainers or supervisors in the area of application.
  • Create course material that is not just hundreds of power point slides. It should be interactive and social. We use simulations, games, case studies, e-learning, and teach back single point lessons to ensure that we are engaging all of the learning styles of our students. Our goal is to spend only one quarter of each hour on material directly from the slides.
  • Don't just have a training class. Connect your training with coaching in the field and project work that allows for application of each required learning point. This demonstrates learning while also driving your return on investment. 
In the end we want to verify that the learning objective have been retained and applied within the facility correctly and through this application we will then see the return on investment for the training effort.

5 comments:

  1. One way to validate the value of training is to look for and document the specific tasks the students did based on content of the course and coaching. If a student applied a new tool and saves $50k/year, that is real and tangible evidence of the value from just one student.

    The coaching can and should focus on the student 'getting' the concepts and actually applying them in a meaningful way.

    Training has value and it is difficult to capture that value, yet very much worth the effort.

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  2. Shon,

    Good post!

    Mark J. Cundiff

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  3. Excellent post and topic Shon. Ss our PLC training for maintenance and engineering focus on working with PLCs (plant automation) more safely and reliably, it is difficult for students and management to track and realize actual safety instances avoided (and $ saved) as a result our training. Likewise with with tracking $ saved from increased reliability after PLC training. So we focus on conveying the reduced downtime as a result of our training, as it is traceable and a dollar amount can be associated with it.

    To do so and keep it simple, the facility must know before training their Average Annual Downtime and their Average Downtime Cost per hours. As many report back how just 1 method learned in class saved them 10 times the cost of training, the realized savings is even greater for those who understand the True Downtime Cost (TDC).

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  4. Great post! It's so critical that organizations really focus on the results of training so that the value can truly be understood. It's becoming far too common to hear about cuts to training budgets, when it's clearly such a crucial element to an organization's success!

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  5. As part of the training organization at Rockwell Automation, I’ve helped develop an ROI forecasting tool that can help companies determine what kind of financial impact a training program has on the bottom line. The tool is available for download on our website:
    http://www.rockwellautomation.com/services/training/roi.html. Making the calculation requires a few simple steps. First, tally the cost of the training itself by adding up the expenses associated with: materials, instructor(s), the training facility, travel, lodging, meals, the number of employees attending the training, and the amount of time they’ll spend away from their jobs. Next, identify and calculate the metrics and associated costs that are impacted by an untrained workforce. These could include everything from: downtime, on-time deliveries and vendor support expenses, to overtime, scrap rate, wasted programming costs and maintenance. Then, estimate the percent improvement anticipated as a result of training staff to do their jobs better. The United States Department of Labor estimates that raising the educational level of employees by one year results in eight to 13 percent higher labor productivity.

    Finally, we combine these numbers into the following equation: Annual Percent of Estimated ROI = (Estimated net savings from training/total training cost) X 100.

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