Making the most of training investments

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Making the most of training investments

Aptara Editorial | Posted on 15th Dec 2016

In this era of innovation, advancements in technology accelerate at a rapid pace. Organizations are continuously facing new systems, applications and processes that require employee training and, therefore, have made learning and development solutions a top priority.

Training is undoubtedly one of the most valuable investments an organization can make. However, to ensure the highest possible return on investment from training and development initiatives, businesses must be strategic in spend management.

How big should the budget be?
One of the common questions business leaders face when developing a training budget is how big it should be. According to Brandon Hall Group's 2016 Training Benchmarking Study, on average, large companies (those with 10,000 or more employees) spend $13 million on training, medium-sized organizations about $3.7 million and small businesses around $290,000. It's important to keep in mind that increasing the budget for it won't necessarily make the training itself better or more effective. The key is not to make more investments, but rather smarter investments.

The parties in charge of deciding on the budget should also be considered, as since: Different departments have different goals and, therefore, perspectives on how to approach training spend management. If a company does not have a chief learning officer, it is highly recommended business leaders are involved in the decision - not just HR professionals. This can help ensure the training strategy and objectives align with the company's mission, and that the resources are distributed appropriately. 


To calculate training ROI, the right metrics need to be measured. To calculate training ROI, the right metrics need to be measured.

Determining assets to invest in
In the past, in-person classroom-led instruction was the obvious platform for training. However, within the past few years the learning ecosystem has grown significantly. Between video, microlearning, social media and various eLearning tools and software, businesses now have a wide range of options to choose from, including:

  • eLearning courses
  • Simulations
  • Online videos
  • Mobile applications
  • Gamification

The tools and platforms an organization chooses to incorporate in its learning strategy play a critical role in the ROI of training program, since they will have a significant influence over participation, engagement and, therefore effectiveness. Although the increased breadth of offering makes for a more dynamic learning experience, it can also make it more challenging for organizations to choose between various assets.

The modules that will yield the greatest benefits and value for any business come down to the user experience. Picking the right tools requires companies to have a sound understanding of the preferred learning styles of their users, as well as a detailed strategy and plan. Each training session should be designed to achieve a particular goal or objective, so the more in-depth businesses can get on the function and purpose of each, the better positioned they will be to choose the assets that make the most sense.

Effectiveness versus expense
When planning a training budget, it can be difficult to define the monetary value of a certain modality. According to Brandon Hall, typically, training costs are measured in hours based on how long it takes to develop. There's a lot more to learning than the length of training, though. Now, education is all about the experience - so training expenses should be evaluated in terms of how valuable the experience is for the learner. 

"The value of training rests in the effectiveness of the experience, not in the time it takes to create it."

Not only is it important to consider the cost to create the training module, but also its effectiveness. And the most expensive or popular options for training modalities do not necessarily translate to the most effective. For example, Brandon Hall found that classroom-led instruction is still the most popular training format - yet it is not the most effective. On the other hand, video has climbed the ranks as one of the preferred methods of eLearning, and is the least expensive to create.

The source also pointed out that simulations and games are on the higher end of the effectiveness scale, yet have some of the lowest usage rates. It's fair to assume that, as these engaging and digital learning modalities gain traction and more organizations learn of their effectiveness, usage rates will begin to rise.

Outsourcing to third-party specialists
Technology is ever-evolving, so it is important for organizations to make sure their training solutions are agile and efficient. Many organizations do not possess the internal capabilities needed to keep up with the intense IT demands of today's training technologies and learning management systems. This is why, according to Training Industry, the majority of businesses prefer to outsource their training solutions - and more than half have made it a formal business practice.

Outsourcing the creation, content development and delivery of training programs allows organizations to leverage expertise, skills and specializations that go beyond the scope and competency of in-house staff. It also enables them incorporate new ideas and create training projects at a larger scale than would otherwise be possible. All of this translates to more time, resources and attention on core business objectives and strategy.

As more companies see the expansive array of possibilities and opportunities available to them that go beyond traditional training methods, it is ushering in a new way of managing training budgets and achieving a training solution that is more effective and affordable than ever before. As with any type of business investment, ensuring a high ROI from training requires a strategic approach to budget planning and spending. Organizations must consider which platforms and solutions will benefit them not only now, but in the future as well. 

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