The Power of Measuring ROI Toward Business Success

To maximize the potential impact of human resources (HR) training programs on business outcomes, it is crucial to measure their return on investment (ROI). Unfortunately, not all HR executives recognize this significance and neglect to do the analysis. This oversight can result in wasted resources, missed opportunities and an inability to showcase the value of HR training programs. Voxy's Sales Director for Mexico, Mauricio Cortés, discussed the essential measures that companies should take to measure the ROI of their HR training programs and how this can positively impact business success.

Many companies invest in training and development programs for their employees but surprisingly few measure the ROI of these initiatives. According to a survey of over 350 HR executives, only 11% measure the ROI of their training programs, while a staggering 62% do not measure it at all and 27% measure it only in a few programs. 

Before implementing a training program, it is important to align it with a strategic KPI and have a specific goal in mind to avoid it becoming a mere wishful thinking exercise. "Smart methodologies entail skill mapping to recognize knowledge gaps. This is crucial to reach the company's objectives," said the director. It is also crucial to communicate what the program aims to achieve.

Measuring and communicating the impact of training initiatives increases their efficiency and effectiveness. Demonstrating the ROI and proactively communicating the impact of learning and development initiatives will also help secure the presence of learning & development (L&D) in the future. According to a recent survey, 53% of L&D professionals believe that the area should be represented in the executive leadership, explained Cortés.

To demonstrate the effectiveness of training programs, it is important to measure the employee retention rate, internal mobility data and the ROI in terms of time saved and productivity gains. For retention rates, companies must compare those who participated in the training with those who did not. A retention program can determine whether loyalty and commitment have increased due to employees’ participation in the training. Crucially, 25% of employees believe their skills are not being utilized, making them 10 times more likely to seek other employment opportunities.

Internal mobility metrics also provide insight into whether the training program is working. If employees are growing organically within the company and filling strategic positions, then this is an unmistakable sign that the program is successful.

Calculating the ROI of training programs is crucial to determine whether they are worth the investment. By saving time with customized programs and developing skills to increase productivity, training programs can be an excellent investment. To expedite the ROI of such a program, companies ought to take certain crucial measures such as identifying gaps, tailoring the learning experience, clearly communicating expectations and regularly providing feedback.

Measuring the impact of training programs on business and understanding their success and profitability is crucial. Leveraging AI to analyze and understand data is similarly important in developing an inclusive development plan. By identifying where different audiences are in their skill set, training programs can be tailored to their needs, making them more inclusive and effective.