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  • Writer's picturePeter Franklin

The ROI of Training

Training to meet business challenges?

Organisations face a multitude of challenges some of which can be met by augmenting staff capabilities through training. In the work that we do with clients as business development and strategy consultants these often fall into the answer to the following question:

“Do you and your team wish you could get more people to say yes?”

That could be:

  • “Yes, I will buy your product or service.”

  • “Yes, I will approve your budget for the project.”

  • “Yes, I will follow your recommendations.”

  • “Yes, I think your report is really insightful and what we need."

Whether the question you want to address is one of the above – or something else – the answer may well lie in investing in training.

Training ROI

So how much of your budget should you be dedicating to training?

The answer is actually quite simple – you just need to think through what the consequences might be of enhancing the capabilities of your team. Let’s take each of the challenges above as an example of how to do the calculation.

1.     If you and your team are involved in sales and marketing, i.e. trying to get your audience to buy your product or service – how much would one extra contract be worth to your organisation. If a training course could enable a person to get that one extra contract per year – how much would that be worth? How many extra contracts might be forthcoming for a fully trained individual? How much value might be created each year? How does the increase in net margin compare to the cost of the training?

2.     If you and your team are looking for approvals for projects – and to date these are not always forthcoming – how much extra value might be generated through reduced management time in decision making, and more successful implementations? How much might be delivered in year one? Again, how does this compare to the cost of training?

3.     And what if more recommendations turned into positive outcomes – how much analytical time and consultancy spend might be saved if unimplemented recommendations disappeared from the landscape. How much value could be created if recommendations led to implementation success as a matter of course? How much might this be worth each year?

4.     And finally, what would an additional report subscription be worth. How many subscriptions per person would be needed to give a 10x ROI? What are the returns in year one, two and three post training?

What does this mean for your training budget for this year?

For the right courses you could generate an ROI of >1000% on your investment.

This is because you will have:

  • Thought through the additional business value that trained individuals can generate versus the untrained.

  • Selected your training programmes to deliver maximum value/cost ratio.

  • Only selected courses which can deliver clear benefits year after year.

Taking the ROI approach will turn your training programme into one of your organisations highest performing assets.

(if you would like to see the Pyramid Thinking template used to create this post you can download the PowerPoint file below.)

ROI of training 7 Feb 2024
Download PPTX • 52KB

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