Tying Training ROI to the Bottom Line
Jeannine Kunz, Chief Workforce Development Officer, SME on
April 04, 2016
One of the frequently asked questions at our recent tuX event was: how do I convince upper management there is a return on investment (ROI) for training?
It’s a common struggle. While human resources teams, plant managers and supervisors recognize that substandard training can lead to productivity, quality and safety concerns, many don’t know how to communicate the value of investing in human capital to higher-level decision makers.
Our answer? Make sure your training program is an integral part of a strategic plan from the beginning, attached to overall fiscal goals. The bottom line is that you have to tie your learning and development program to the bottom line.
Research, proving a strong connection between training and company success, is on your side.
For instance, according to a study by Bersin & Associates, entitled “High-Impact Learning Culture: The 40 Best Practices for Creating an Empowered Enterprise,” high-impact learning organizations (HILOs) that have a strong learning foundation in place tend to significantly outperform their peers in several areas:
- 32 percent more likely to be first to market
- 37 percent greater employee productivity
- 34 percent better response to customer needs
- 26 percent greater ability to deliver quality products
- 58 percent more likely to have skills to meet future demand
- 17 percent more likely to be market share leaders
The benefits are clear, yet findings from Tooling U-SME’s soon-to-be-released Readiness Assessment Insights Report show there is a disconnect. One of the more telling statistics is that three quarters of respondents say their company doesn’t offer a structured training program on manufacturing skills.
Calculating ROI can help change this trend and justify a valuable investment in training. For help, check out our new white paper, “Proving the ROI of Training: Moving from Expense to Necessity.” It provides detailed formulas and examples to help you prove ROI related to increasing productivity, accelerating onboarding and reducing downtime.
Download it for free here and let’s keep the conversation going.
-- Jeannine Kunz, director, Tooling U-SME
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