Return On Investment Of Emplyees' Training

Hey All
We conducted training(Leadership) for top management in our organisation and every participant was required to take a project based on the training.
We calculated ROI by Monetry Benefits derived- Training expenses-Opportunity cost of capital divided by Training expenses.
This method has helped us deriving at one figure which shows us the benefits derived.
Regards

hi reena,
even in my project i didnot see people caluculating he ROI but they calculate the effectiveness of the training and training program effectiveness also.. since ROI for managers is diffcult job since you have to convert the qulatiy aspects to figure or cost.. so it is the problem..
then top people are satisfied with the effectiveness report itselg so they are not willing to go for ROI...
but in future ok it is compulsary..
even good company like Glaxo international which is conduction their exectuive coaching donot conduct ROI....
a company like Parle were training is damn compulsary in their strutcutr... but they are not doing ROI.. but training effectivness is checked....
rOI for workers is little easy to go about

hi saurabh n sreenivasan,

saurabh, could u plz tell me how did u calculate opportunity cost of capital of ur trng prog.

moreover in dat trng prog, wat were d benefits derived. i'm sure there must be some benefits either in terms of development of hard skills or soft skills. did u take into account these benefits also. if so, plz tell me how?? according to me, it is imp to take into account these benefits also since these form d basic reason for imparting training to employees.

sreenivasan, i agree wid ur view dat it is tough to calculate ROI since conversion of soft skills in quantitative terms is very difficult. but ROI, if calculated, provides proper results on the benefits derived frm a trng prog with respect to cost of the program. it is base on numbers, so it is more concrete.

trng effectiveness gives results in qualitative terms. so drawing inferences frm them is quite subjective in nature. that is d reason why companies r trying to find out ROI of their trng programs.

Motorola does it on a world wide basis.

i'm doing my project in Airtel. so if i would be able to calculate ROI for a particular trng program then it may be a beginning of ROI in Airtel also. just joking :D

of course, i'm just a summer trainee here but still this is a real challenging topic to work on as a project.

wat say???

Reena

hi everyone,
does anybody know the industry practices regarding calculation of ROI of employees' training??
if possible, could anybody plz tell me how it is practised in their company?
thanx
Reena

hi reena,
that is good spirit and best of luck for you...
for motorola i will enquiry how they do it.. since free scale is motorola vendor in india.. they are there in noida....
ok see u
best of luck again
byee

Hi Reena
We calculated opportunity cost as the cost of capial i.e. what return money would have given if it was invested like in bank, investments i.e. weighted average cost of capital. However limitation to this method is that we cannot calculate intangible benefits like u mentioned.
Regards
Saurabh

hi saurabh,
dnt u think ROI calculated by u was partial only coz intangible benefits r sometimes much more important than tangible benefits generated from training program.
Reena

hi reena,
i talkd with my friend and came to know that in motorola's sister concern which is there doesnot follow the ROI process.. so sorry for that
have a nice time
sweet dreams too

hi sreenivasan,
thanx a dozen for providing me this info. i read it on net only that motorola calculates ROI of training on worldwide basis.
anyways, now i'm in the lookout for the companies in india which do calculate ROI. lets c do i get some info or not.
Reena

hi reena,
actually i was in a hurry that time so couldnot give the full details.. i got the info thatROI was not followed even when motorola india was there... then when motorola work has been hanled by freescale... after that also no ROI was used in their office. may be motorola US is using the ROI. but i am no sure about that
i am tlaking about indian operation only
bye
have anice time