IT departments are losing out on training budgets because justifying return on investment (ROI) from education programmes is too difficult.
Parity Training says managers need to focus on financial metrics such as return on investment from training projects or risk losing out on spending approval from the board.
It has launched a six-point guide to measuring ROI from training to kick start a more commercial approach to getting buy-in from the board on corporate education programmes.
Barbara Greenway, managing director of Parity Training, warned that too many organisations still rely on the 'feelgood' factor to justify their training budget. Very few, she said, actually tackle the question of whether their investment will actually pay off.
"By 2005, 60 per cent of all training projects will need some form of ROI justification to get the go-ahead," Greenway said. "The time has come for managers to justify training just like any other business project."
Statistics from analyst Gartner suggest that IT training yields on average between 25 per cent and 75 per cent return on investment, "but some organisations are satisfied as long as they break even," Greenway said.
"There's a big focus on using e-learning to reduce costs, but very few companies have measures on how effective it is."
Companies need to take ownership for training, and make an effort to go back into the business to see what impact training has had, Greenway said. She added, however, that "too many companies are still relying on smiley sheets for feedback."
But Greenway denied that the IT training market was struggling due to the economic downturn.
"We haven't seen such a sudden dramatic drop-off in training investment. Companies may have let people go but that means the people left behind need to do more. There has been a real mind shift in using training and certification to hang on to talent or offering it as part of an outplacement service."
Parity's six-step guide to measuring training ROI
- Define your objectives - what do you want to get out of the training?
- Skills assimilations - what did your staff really learn from the course?
- Cost itemisation - what did the courses cost in terms of setting up, fees, man hours spent?
- Benefit analysis - how to convert the achievements into monetary value
- Doing the maths - what is good ROI?
- Evaluation - reporting the actual measured impact of training
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