Training ROI of 30 to 7000 Percent

Training Yields Major Benefits to Business

Businesses can be sure that every dollar spent on training is a dollar well spent, with a return which can be many times the investment, provided they undertake the right kind of training. The National Centre for Vocational Education Research (NCVER) released a series of research reports that demonstrated the value of training when it is:

  1. Well planned,
  2. Implemented properly and
  3. Appropriate for the staff who are trained.

The major points to emerge from the research include:

Returns from training investments are nearly always positive and can be very high.

Case studies of individual firms found that returns varied between 30 percent and 7,000 percent. The size or industry of the firm did not matter, was nearly always positive.

Returns can come in many forms.

  • There is more to it than just looking at productivity and profitability.
  • More employees able to perform a wider range of tasks.
  • Reduced overheads through greater flexibility.
  • Greater ability to innovate through new technology and better forms of work organization.

Returns are highest when the training in highly focused.

Training pays when it is focused on a specific business problem, such as turnover, on-time delivery, or production capacity. Training that is short and concise also pays higher returns, as does training that is linked to innovation, particularly technological change.

Returns on training investment can be enhanced by other human resources policies in the firm.

Human resource practices that encourage staff to remain with the firm after training can enhance returns on training. Typical practices include promoting staff from within rather than external recruitment and the development of broad skills sets amongst employees such as leadership, team-building and other soft skills.

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