Defend Your Training Budget

By

Paul Walsh

About The HR Observer

• The HR Observer is an initiative by Informa Middle East aimed at becoming a platform for HR professionals in the Middle East to exchange insights and expertise, both online and offline, in an effort to take the industry forward

• The initiative features a blog, LinkedIn group, Twitter feed,

online webinars and a series of offline informal networking functions

Housekeeping

• The slides will be available on our SlideShare page, and a link will be emailed to you

• The recording of the webinar will be available to view, and a link will be emailed to you

• Please take the time to complete the post-webinar survey that will pop up at the end

• Questions will be answered at the end of the webinar

Today’s Presenter

Paul Walsh is a professional Human Resources Trainer, Consultant and practitioner with over 20 years’ experience in the GCC, MENA and Asia. He currently mixes his consultancy work with lectures at Further and Higher Education Colleges and Universities in the UK. Well known in the Gulf region; his unique experience in Human Resources, Finance and Operations ensures he brings real practical examples and a wealth of experience to his HR courses on talent management, recruitment, competencies, training and development, performance management, HR budgeting and manpower planning. He has also undertaken consultancy work in Qatar, Pakistan, Malaysia, Hong Kong, UAE, Oman, Bahrain and Egypt. He has worked with clients in the oil & gas, banking, telecommunications, retail, construction and automotive sectors. Paul now runs his own consultancy, specialising in HR, Finance and Leadership. He also spends time teaching adults with learning difficulties, basic business and retail skills. Paul has a Postgraduate Diploma in Business Administration from Lancaster University, a Postgraduate Certificate in Education and Training from the University of Huddersfield as well as a Certificate in Teaching English to Speakers of other Languages from Trinity College, London.

WEBINAR DEFENDING YOUR TRAINING BUDGET Join us in this webinar with Paul Walsh, a leading HR Consultant and Trainer in the region, to discuss, question and improve how we can defend our training budget. When companies are looking to cut costs in this economic environment, invariably the training budget becomes a target. We have consistently failed to measure the return on training and, therefore, have no defence when our budgets are cut. In this short Webinar we will have a brief look at Return on Training Investment. It is a subject that has been discussed in HR circles since 1991 …. And we are still struggling to design and implement an effective way of measuring our return. The webinar will show various methods of obtaining ROTI and discuss the steps you can take to get your department ready for defending your training budget in the coming years

The Four Levels of Training Evaluation

Level 1 - Reaction

Level 2 - Learning

Level 3 – Behavior

Application

Level 4 – Business

Impact

Four Levels

of Training

Effectiveness

Available Data

• Financial Performance

• Productivity

• Turnover

• Sales

• Defect Rates

• Customer Satisfaction

• AND...........???

Exampl : Measuring Defect Results

0.00

50.00

100.00

150.00

200.00

Program :

Quality or

Excellence

Results after

3 months of

training, number

of defects per

Million dropped

to 80 units/day

120 units

80 units

Before training After training

0.00

10.00

20.00

30.00

40.00

50.00

Example : Measuring Sales Results

Programme :

Sales Training

Results after 3

months number of

sales per

salesman increase

to 30 units/month.

20 units

30 units

Before Programme After Programme

ROI Model

Collect

Data

Isolate the

Effects of HR &

Training

Convert Data

to Monetary

Values

Calculate ROI

of HR &

Training

Tabulate

Program

Costs

Identify

Intangible

Benefits

Isolating the Effects of HR

Methods to Isolate

the Effects of HR

Using

Control Group

Trend

Lines

Participants

Estimate

Supervisors of

Participants

Estimate

Trend Lines Analysis

Jan Feb Mar Apr Jul Jun May Aug

Vo

lum

e o

f Sa

les

The difference

represents the

estimated impact

of initative.

Trend Projection

Actual sales performance

Training Takes Place

1 Training Program 50% 70%

2 Change in Procedures 10% 80%

3 Adjustment in Standards 10% 50%

4 Revision to Incentive Plan 20% 90%

5 Increased Management Attention 10% 50%

6 Other - -

Percent

Improvement

Caused by

Confidence

Expressed as

a Percent

Factors Which Influenced

ImprovementNo.

Isolating the Effects of Training

Example of a Participant’s Estimation

• The confidence percentage is multiplied by the estimate (50 % x 70 %) to

produce a usable training factor value of 35 %

• This adjusted percentage is then multiplied by the actual amount of

improvement (post-program minus pre-program value) to isolate the portion

attributed to training

• The adjusted improvement is now ready for conversion to monetary values,

and used in the return on investment

The Training Budget

• An assessment of performance before and after the training must take place.

• This must become part of the normal nomination process.

• Start with the expensive training

• Ask what would happen if the training did not take place?

RAISING SKILL LEVELS

• 0 No Ability

• 1 Little Ability

• 2 Understands the Skill

• 3 Performs with Guidance

• 4 Performs Independently

• 5 Can Coach Others

INTO METRICS

• Baseline Skill set before training.

• Reviewed at a suitable period after training.

• Improvement to be assigned a value or weight – eg an improvement in a skill that is used 50% of an employees time is given a weight of 0.05

• Economic value is salary * weighting.

METRICS EXAMPLE

• An employee is assessed before training at level 3

• 3 months after training he is assessed at level 4

• The skill is used 50% of the time spent in work.

• His salary is $60,000 per year

• The training costs are $1,200 (total)

• Using the Phillips weighted approach - $60,000 x 0.05 = $3,000

• This is the value that training has added

SUMMARY

• The information to measure the impact of “Hard” skills training already exists

• Soft Skills – using Philips equation gives us the ability to compare training programmes and their effectiveness.

• We only have to try!