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ROI on Training - by David Slonosky

The lovely letters ROI. King in French. King of executive decision-making in the corporate world. Return On Investment.

Your company agrees to send you, their pride and joy, off to a training session. It will cost them (let's say) $2,000 in course fees, and a loss of (let's say) $2,000 in bean counter money for a total of $4,000. Half of that is real money, and half of it is estimated based on what the company thinks you are worth hourly to them when your butt is planted firmly in your cubicle chair.

That's pocket change to some companies, a huge amount to others. So then part two of the ROI magic comes in, how much revenue will that $4,000 bring in for them? You might be their pride and joy, but pride and joy don't pay the server room bills...

I suppose (not being an MBA versed in costing ROI analyses) that you could break down training into hard skills and soft skills. Hard skills are things like, this course will make you able to churn out documentation quicker, or let you program VB.NET more efficiently, or perform ROI analyses accurately. Soft skills are things like, this course will probably enhance the way you interact with people, or let you manage better through a proven protocol developed by experts at a big school, or make you able to create prose that stirs the feelings of paying clients in a positive fashion.

I also suppose that hard skills are more easily evaluated post-course. So, if I was churning out three pages of documentation per hour before my course and now I churn out six, my productivity has doubled. The revenue stream I generate for the company doesn't really double on a single project basis, but if I can be put on two projects now, I potentially save the company the cost of another resource, so it is probably cost-effective to approve this kind of training.

Soft skills? How is a more effective management style evaluated? You can measure metrics on revenues and costs over a long term period. But in isolation, or in the shorter term, how do you measure your effectiveness? You can be the best manager in the world for your team, but some blockhead in the southwestern north office of the eastern region can be making decisions that render your brilliant team management practices virtually useless.

Corporate culture is perhaps the biggest determinant in whether you get approved for training or not. I worked for one place that gave us training when times were good and then moved to a self-training method when times were bad. And then when times got really bad, I got trained in how to look for work. (But that's for another column.)

I don't really know the answer to getting approval for training. But certainly thinking like the person you want to impress and putting your argument in terms they understand will go a long way.

I guess I'm itching for some new training myself... columnist, heal thyself?


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