Training Options - ROI

TreQna University

www.treqnauniversity.org

Training Evaluation ROI

Here are a few suggestions for converting training programs to monetary values.
1. Benefit/Cost Ratio (Divide total benefits by cost) For each fo following;
a.
b.
c.
d.
e.

Participants Actions
Measure Learning Competency
On Job evaluation and follow up
Desired Business results achievments
Benefits/Cost Ratio and Return on Investments (ROI)

2. How well the training impacts desired business results is best determined by converting data into
monetary values. Consider the following to measure results;
a.
b.
c.
d.
e.

Follow up assignments
Surveys and questionnaires
One on one interviews
Focus groups
Observations
a. Direct
b. Indirect

3. Action Planning (written and agreed upon by each stakeholder)

Application of training programs knowledge and skills as compared to a specific task or project.
Documentation of progress in achieving measurable objectives.
4. Performance Contacts
Develop a pre-training agreement between participants, their supervisors and facilitators. Develop
measurable goals related to the training program content.

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5. Special Training Follow-up Process

Participant and supervisor hold a follow up meeting one to three months after training. Report both
successes and opportunities for honing participants knowledges and skills.
6. Performance Tracking
Perform post evaluation that tracks department, team or individual performances in areas such as
enhanced productivity, quality improvements, reduced costs, cycle time reduction, and increased
customer satisfaction. Obtain before and after data for comparisons of each data item you intend to
include in this measurement scheme.
7. Isolate Training Effects on Performance (Use of control groups)
Use of control groups in an experimental training design such as; One group receives training of
required knowledge and skills. Second group receives no training. This second group should be
similar in most characteristics as compared to the first group, should be selected at random and
should be subject to the same influences as those of the trained group.
8. Trend Line Analysis (Create a graphic that indicates current performances as compared to
future desired performances.)
9. Forecasting (Use an analytical and mathematical methodology for measuring training results by
calculating a value of the anticipated performance improvements.)
10. Participant Estimations
a. Asking participants to determine how much performance improvement is due to the training
they received.
b. Indicate the Percentage of Improvement changes.
c. Ask the basis of the participants perception regarding these changes.
d. Ask the participant for their degree of confidence regarding these estimates.
e. Confidence multiplied by improvement (%) and divide by 100 for a new confidence level.
f. Multiply the answer by the amount of the stated improvement in order to isolate the portion
attributed to training.
g. To calculate your training ROI, convert that portion to a monetary value.

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11. Subordinate Estimates *Gather data by survey or interview and consider the following;)
a. Feasibility
b. Accuracy
c. Credibility
d. Costs
e. Time
f. Man-hours
12. Customer Inputs (Consider developing a short written, in person or telephone survey.)
13. Total Hours Trained (Equals sum of all training hours of similar classes.)
14. Percentage of Budget (Equals sum of all training unit costs.)
15. Cost/Training Hour = Sum of Unit Cost/Hour
a. Cost/Developed Program
b. Programs/Month
c. Modules/Month
16. Percentage of Training Goal Completion (Number of participants that completed training
divided by Time - Between - Events.)
17. Number of Man Hours (Number of classroom hours divided by number of actual
participants.)
18. Average Monthly Cost of Training
Number participants completing delivered training multiplied by actual cost. Actual cost is then
divided by number of work days per month. See example that follows.
600/52 weeks = weekly average of number. This can be used as a minimum performance standard
in some cases and coupled with the Time - Between - Events chart would indicate progress towards
ultimate goal.
19. Annual or Quarterly or Monthly or Weekly or daily or hourly average Cost = cost of
materials/number of participants/ (unit of Time).
As example, say we need to develop 20 participants knowledge/skills base in how to perform XYZ.
We locate a vendor with the program we desire and it costs $40,000.

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Before agreement to the charges, the participants management is interested in daily cost for each.
You would take the $40,000 materials/20 = $2000.
Next take result/ (Time Unit desired). $40,000/20 participants = $2000 total per participant. $2000/5
days = $400 daily cost for each participant.
20. Satisfied Customers
Take the number of satisfied customers and divided by the number of total customers = fraction
called satisfied customers.
21. Repeat Customers
Take the number of repeat customers and divided by number of paid customers = customer returns
per customers visiting previously.
22. Individual Participant Cost of Program
Take number of facilitators, multiply dollars per hour, multiply actual hours of instruction, divide by
number of participants = cost of program per participant.
About the Author

Charles E. Wilson, Ph. D. is President/CEO of Lakota Training & Development. As

well he owns and operates LTD Publishing and Six Sigma Doctor. Wilson is the author
of several books, including "Six Sigma Deployment". He serves on TreQna Board of
Directors, the Board of Directors for Brazoria County Dream Center, and has
responsibility for knowledge development for TreQna University.
Dr. Wilson holds multiple degrees in Psychology. He is a motivational speaker, training facilitator,
training developer, management coach, business improvement consultant, and author. Charlie has
36 years of experience in the business and coaching worlds.

Please visit http://treqnauniversity.org/default.aspx to learn more about effective and unique

blended learning and be able to do skills approach for Six Sigma training.

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