Can Anybody guide how do we calculate ROI on Education Reimbursement given to employees. Regards AShit
From India, Mumbai
From India, Mumbai
to calculate ROI
value the student after a program minus his/her value before the program.
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Full cost of education including his living allowances.
best of luck
value the student after a program minus his/her value before the program.
---------------------------------------------------------------------------
Full cost of education including his living allowances.
best of luck
I am interested in abmconsult explanation about ROI. My question is : How to calculate ROI for all emplolee’s cost, annually. Best regards JD Kuncoro : :?:
Dear Ashit,
Just a thought which I would like to share.
Calculating ROI on education reimbursement is like calculating ROI on recruitment. For example, suppose one is to recruit a BTech+MBA candidate. There is a recruitment cost involved in getting this person. However suppose there in an employee who is an engineer who wants to do an MBA. So in this case the education reimbursement should be equated to the recruitment cost. And also the added advantage is the company is not spending any more money money on training or inducting the employee.
Now ROI of recruitment maybe calculated by defining certain parameters whose satisfactory fulfilment may denote effectiveness of recruitment. Defining these parameters may necessarily need to be cascaded from the vision/mission of the company.
At the very core of it, proper quantification is required to donote that if the employee does task a, then the company is gaining 'x' amount of rupees. if this study is done then breakeven analysis maybe done for recruitment process. As in if the recruited employee does all the tasks he is supposed to, for a certain number of years, then the cost involved for his recruitment maybe be compared to the gain and the moment the gain exceeds the costs, there is a breakeven and +ve ROI.
Any thoughts on this logic are most welcome...
Regards,
Mathew
From India, New Delhi
Hi everybody,
I think it has become the order of the day to calculate ROI on anything and everything. ROI on training, education etc etc.
I can definitely understand calculating ROI on investing in new machinery in a plant. But somehow i am not able to appreciate the roi caluculation on such intangibles. in my opinion, there is no credibility / logic whatsoever in such ROI calculations. By this i mean that justification for providing coninuous training to employees cannot be the roi calculation in simple Rupees or moths or years.
From India, Madras
20I think it has become the order of the day to calculate ROI on anything and everything. ROI on training, education etc etc.
I can definitely understand calculating ROI on investing in new machinery in a plant. But somehow i am not able to appreciate the roi caluculation on such intangibles. in my opinion, there is no credibility / logic whatsoever in such ROI calculations. By this i mean that justification for providing coninuous training to employees cannot be the roi calculation in simple Rupees or moths or years.
From India, Madras
I beg to differ - justification for providing training to employees can and sometimes (not always) is the ROI in simple financial terms and time.
Managers are accountable for the results their team delivers. Keeping the team suitably skilled and capable will enable the team to deliver. As the targets and objectives change (as the market and customer needs change) it is likely that new capabilities will be needed by the team.
Managers also have limited resources and need to decide how best to use these resources including time and people, for maximum benefit.
Being able to determine in advance if a particular piece of training will provide better returns than investing in a new piece of equipment is a very valuable ability for a manager to have. Most managers don't have this ability, and investing in new equipment is something very easy to visualise and link in the minds of others to delivering some tangible results.
As a former training manager and now an independent provider of training services and consultancy I often have had to make the financial case for training, and often the decision on whether to proceed or not, or to delay the delivery of training, has been almost entirely financial. Success has tended to come where the returns have been clearly and credibly forecast and demonstrated.
Best wishes
Martin
From United Kingdom,
Managers are accountable for the results their team delivers. Keeping the team suitably skilled and capable will enable the team to deliver. As the targets and objectives change (as the market and customer needs change) it is likely that new capabilities will be needed by the team.
Managers also have limited resources and need to decide how best to use these resources including time and people, for maximum benefit.
Being able to determine in advance if a particular piece of training will provide better returns than investing in a new piece of equipment is a very valuable ability for a manager to have. Most managers don't have this ability, and investing in new equipment is something very easy to visualise and link in the minds of others to delivering some tangible results.
As a former training manager and now an independent provider of training services and consultancy I often have had to make the financial case for training, and often the decision on whether to proceed or not, or to delay the delivery of training, has been almost entirely financial. Success has tended to come where the returns have been clearly and credibly forecast and demonstrated.
Best wishes
Martin
From United Kingdom,
I am absolutely certain that continuoud training is the requirement of the day.
I am also in concurrence with your point "Managers are accountable for the results their team delivers. Keeping the team suitably skilled and capable will enable the team to deliver. As the targets and objectives change (as the market and customer needs change) it is likely that new capabilities will be needed by the team. "
But i am not in a position to appreciate that investing in training could be a substitute for investing in a particular piece of machinery.
Success defintely comes where the returns have been clearly and credibly forecast and demonstrated. No doubts. But the point is that is ROI if not only, the main justification for providing training?
From India, Madras
I am also in concurrence with your point "Managers are accountable for the results their team delivers. Keeping the team suitably skilled and capable will enable the team to deliver. As the targets and objectives change (as the market and customer needs change) it is likely that new capabilities will be needed by the team. "
But i am not in a position to appreciate that investing in training could be a substitute for investing in a particular piece of machinery.
Success defintely comes where the returns have been clearly and credibly forecast and demonstrated. No doubts. But the point is that is ROI if not only, the main justification for providing training?
From India, Madras
When clients come to me with what the perceive as a training need, for example "can you send Gemma on a course for dealing with stress and difficult customers because she gets overwhelmed by angry customers and ends up losing her temper with them. If we can't get this problem fixed then we may have to move her or even fire her.", I have a tendency at first to say "no. We must understand the root causes of the problem here before we attempt to fix it - we might make things worse". There have been other cases where a company has terminated an employee who couldn't perform, and it later turned out there were many issues with management style, problems and stresses at home, and poor initial training in the first place, which only got resolved in the courts after the terminated employee took the company to a tribunal and won substantial damages.
Equally there are instances where new equipment has been brought in to automate a process more effectively when in fact what was needed was better training on the existing equipment - the company spent many $100Ks and got no appreciable benefit from it - performance was pretty much the same - a little higher sure, but not worth the expense and disruption!
ROI is the purely financial sense is not the only justification. Non-financial ROI - just asking the question "is it worth doing?" can help clarify and justify. I have worked in a number of organisations where money was provided for employees to do training that had nothing to do with their jobs - deliberately so. Spending say $150 each per year on learning in general, learning that was fun and of value to the individual employee (such as learning a new language ready for going on holiday in Europe) was considered a good thing to do by the company (they were a major global with very tough shareholders!!) - showing that you value your employees can bring many many benefits in productivity and good faith that are often unmeasurable - sometimes you have to do things purely on faith, but in a way you justify it against your cultural core values. So, it isn't always, nor should it be, just about money!!
Kind regards
Martin
From United Kingdom,
Equally there are instances where new equipment has been brought in to automate a process more effectively when in fact what was needed was better training on the existing equipment - the company spent many $100Ks and got no appreciable benefit from it - performance was pretty much the same - a little higher sure, but not worth the expense and disruption!
ROI is the purely financial sense is not the only justification. Non-financial ROI - just asking the question "is it worth doing?" can help clarify and justify. I have worked in a number of organisations where money was provided for employees to do training that had nothing to do with their jobs - deliberately so. Spending say $150 each per year on learning in general, learning that was fun and of value to the individual employee (such as learning a new language ready for going on holiday in Europe) was considered a good thing to do by the company (they were a major global with very tough shareholders!!) - showing that you value your employees can bring many many benefits in productivity and good faith that are often unmeasurable - sometimes you have to do things purely on faith, but in a way you justify it against your cultural core values. So, it isn't always, nor should it be, just about money!!
Kind regards
Martin
From United Kingdom,
Greetings, all:
The definitive guide on development of ROI in Training is entitled Running Training Like a Business: Delivering Unmistakable Value, authored by David van Adelsberg and Edward A. Trolley. ISBN 1-57675-059-0.
I have mentioned this book previously in this forum, and have found over the last few years that it answers the questions of ROI for Senior Management in companies in which I consult--and--answers the concerns of Training Directors who, for some reason, simply don't understand the perceptions between deliverables and tangibles.
When you decide to affix an ROI to Training, you first must create a mindspace where Transformation is a necessary and critical first part. Simply trying to offer a tangible XX% ROI always leads to fly-bys.
I've personally witnessed Boardroom arguments in which neither party taking adversarial positions wins, and the losers are the employees who--for whatever reason--don't get the necessary training to progress in their positions.
Sound familiar?
And yet, affix a relative value in this new and bold business environment we must.
When Trolley and van Adelsberg wrote this book (1999), the investment in Training and Development in the USA alone was estimated at $56Billion USD. Add in the rest of the world, advance it to 2005, and you have a worldwide expenditure on Training and Development at a staggering U$D 144 Billion. Who would not expect Senior Management to seek out ROI on such a staggering investment?
Better yet, and to the point, is there any industry that does not measure the benefit of training? I can think of only two--and those are fairly secure positions: meteorologists and economists; both of whom have a high negative performance rate. As a matter of fact, those are the only two positions which I can think of where you continue to get paid whether you make the correct decision or not. And in both, if you wait around long enough, your decisions and predictions will be proven correct.
Even the profession of Funeral Director/Undertaker requires ongoing training, and the larger organizations measure the ROI against the funds expended for training extensions.
Let me suggest that you consider van Adelsberg and Trolley's book as a text for determing the ROI which you will compute on your own training efforts.
All the best.
Alan Guinn, Managing Director
The Guinn Consultancy Group, Inc.
From United States, Bluff City
The definitive guide on development of ROI in Training is entitled Running Training Like a Business: Delivering Unmistakable Value, authored by David van Adelsberg and Edward A. Trolley. ISBN 1-57675-059-0.
I have mentioned this book previously in this forum, and have found over the last few years that it answers the questions of ROI for Senior Management in companies in which I consult--and--answers the concerns of Training Directors who, for some reason, simply don't understand the perceptions between deliverables and tangibles.
When you decide to affix an ROI to Training, you first must create a mindspace where Transformation is a necessary and critical first part. Simply trying to offer a tangible XX% ROI always leads to fly-bys.
I've personally witnessed Boardroom arguments in which neither party taking adversarial positions wins, and the losers are the employees who--for whatever reason--don't get the necessary training to progress in their positions.
Sound familiar?
And yet, affix a relative value in this new and bold business environment we must.
When Trolley and van Adelsberg wrote this book (1999), the investment in Training and Development in the USA alone was estimated at $56Billion USD. Add in the rest of the world, advance it to 2005, and you have a worldwide expenditure on Training and Development at a staggering U$D 144 Billion. Who would not expect Senior Management to seek out ROI on such a staggering investment?
Better yet, and to the point, is there any industry that does not measure the benefit of training? I can think of only two--and those are fairly secure positions: meteorologists and economists; both of whom have a high negative performance rate. As a matter of fact, those are the only two positions which I can think of where you continue to get paid whether you make the correct decision or not. And in both, if you wait around long enough, your decisions and predictions will be proven correct.
Even the profession of Funeral Director/Undertaker requires ongoing training, and the larger organizations measure the ROI against the funds expended for training extensions.
Let me suggest that you consider van Adelsberg and Trolley's book as a text for determing the ROI which you will compute on your own training efforts.
All the best.
Alan Guinn, Managing Director
The Guinn Consultancy Group, Inc.
From United States, Bluff City
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