Why is measuring the ROI of training more crucial than ever?

In a constantly changing world of work, training is an essential strategic lever for companies. It enables companies and individuals to keep up to date with technological and societal developments, but also to overcome skills shortages and support the transformation of organisations.

In a constantly changing world of work, training is an essential strategic lever for companies. It enables companies and individuals to keep up to date with technological and societal developments, but also to overcome skills shortages and support the transformation of organisations.

The scale of the challenge is considerable. It is estimated that  85 million positions could remain vacant in the next five years due to a lack of suitable skills. Moreover,  according to a ManPower study, 75% of European employers are experiencing difficulties in recruiting talent with the qualifications required to meet market needs**.

In this context, investing in training seems obvious. However, training managers often still struggle to convince their superiors of the business relevance of training. To help them, measuring the ROI of training could well be an essential ally.

The challenges facing training managers

A well-executed training policy has many virtues, including:

• Increased productivity: better output per employee.
• Better sales: direct impact on turnover.
• Fewer errors/accidents: reduction in losses.
• Reduced turnover: lower recruitment costs, as current workforce are being re-skilled and/or upskilled.
  
  

Training vs. inaction: Not training could be more costly to the business in the long-term.

And yet, despite the growing recognition of the importance of learning and training opportunities for employees, numerous obstacles are hindering its development. The budgets allocated are often limited, with training sometimes being perceived as a burden rather than a performance lever. As a result, convincing senior management and the c-suite of the real impact of training remains a major challenge.

Lack of visibility and recognition is another major issue. According to figures published by Rise Up, only 26% of L&D professionals believe that their leaders are strongly committed to their initiatives. Furthermore, although 41% consider training to play a central role in their company's strategy, only 10% of them believe that this investment is directly linked to revenue growth.

This growing demand for justification of the impact of training requires L&D leaders to measure and demonstrate the return-on-investment (ROI) of training in concrete terms.

ROI: the foundation of justifying investment in training

In view of these challenges, measuring the ROI of training is therefore becoming a strategic imperative in order to demonstrate its contribution to the success of the company. Effective monitoring of the return-on-investment not only makes it possible to obtain and increase the allocated budgets, but also to convince management by translating the impact of training into financial and business terms.

Furthermore, proving the effectiveness of training programmes encourages employee involvement. When they understand the impact of training on their professional development, they invest more time and energy into training initiatives. This involvement not only promotes skills development, but also the commitment and retention of talent within the company.

How can the ROI of training be measured?

Traditional methods of evaluating training are not enough. Simply measuring the number of training courses taken, the completion rate or the satisfaction of learners is necessary to understand the quality of a training course, but not sufficient to measure the impact of the training itself in real terms - they are mere vanity Key Performance Indicators (KPIs) when it comes to showing the influence your L&D has had on the company and its goals.

To establish a clear link between training and business impact, it is essential to adopt more advanced performance indicators or KPIs. For example, the evaluation of post-training performance is a key lever. It involves analysing the extent to which training contributes to increased productivity, improved commercial results or even faster time-to-market. Another important indicator is the recruitment and retention of talent. Effective training results in reduced staff turnover and increased employee motivation. Finally, measuring organisational agility makes it possible to assess a company's ability to adapt quickly to market developments and anticipate skills needs.

Time-to-skill: the key indicator for measuring training performance

Time-to-skill, a concept Rise Up is honing for its customers, is a key indicator for not only evaluating the effectiveness of training programmes, but also for measuring its direct impact on company performance. This KPI evaluates the time needed for an employee to acquire a new skill and successfully implement it in a work situation. It covers the entire process, from the identification of skill needs to the design and deployment of training, up to the achievement and verification of a level of mastery.

This indicator is crucial because it directly links training activities to an organisation's business objectives. It provides a clear and measurable view of the impact of training on overall performance, while providing concrete feedback on the efficiency of L&D programmes.

In a constantly changing environment, measuring the impact of training via time-to-skill should be a priority. It is a reliable indicator of future performance potential - an excessively long time-to-skill is often an indicator of insufficient ROI. Training managers can therefore use it to demonstrate the operational effectiveness of their initiatives, justify investments in training, convince decision-makers and accelerate the transformation of organisations.