Do you think that you are getting the best return on investment with your training? In this video, Andrea McOwen and Holly Parks share strategies companies should take before, during and after the training to avoid only a 25% retention rate and return on their training dollars.
Andrea McOwen: 00:01 Today we're going to talk about getting the best return on investment when it comes to training dollars. Do you think that our customers are getting the best return on investment?
Holly Parks: 00:19 Maybe. Maybe some of them are, but I really wonder. Yeah, I don't know.
Andrea McOwen: 00:26 Do you remember when we first started in this business, what training was like?
Holly Parks: 00:29 You and I have a lot of years in this business. I remember when we first started training customers, it was like a check the box kind of exercise, and people really didn't look forward to spending their time in training. It was a waste of time. They go, they do what they were supposed to do, and then they go back to work and it would be business as usual.
Andrea McOwen: 00:48 Right, and over the years we've seen that evolve, haven't we?
Holly Parks: 00:52 Right.
Andrea McOwen: 00:53 The way that its evolved is instead of just doing the training event, we've added other components. We added pieces on the front end, so that could be pre-work, it could be surveys on the front end, it could also be just a communication strategy, letting employees know why they're doing this training. We've also added things onto the back end of it, which is coaching and reinforcement, which is really an important piece.
Holly Parks: 01:15 How do you think that helps improve their ROI?
Andrea McOwen: 01:18 Well, we do know that learning retention goes up to 50% if there's reinforcement in coaching on the back end of it, which is why we always emphasize that.
Holly Parks: 01:26 Wow, that's a lot. Are there other things that can improve their ROI?
Andrea McOwen: 01:31 Definitely. I think if the training is tied to a strategy and the employees know what that strategy is, that's really important. There are surveys that can be done that kind of gives the participant an understanding of where they are in terms of their skill level and why they would want to develop that. And then finally, the coaching and reinforcement. I think that's a really big one.
Holly Parks: 01:52 To really get the best return on investment, if a company takes and ties whatever they're doing to a strategy, for example, this is a simple one, a company has got a great brand recognition and they've been selling this product and basically their salespeople are order takers. Then they decide to introduce a new product that's a new market for them and they really have to go out and find the business. It's a totally different skill set.
Andrea McOwen: 02:15 It is.
Holly Parks: 02:16 If they set that strategy, then they say, "We need to identify what skills we need to be able to make this happen," then assess their current skill level with the people they have or maybe for hiring new people and looking at different competencies. After they do this, then they can select the training they want to do and get their management involved, their leadership involved, executive sponsorship.
Andrea McOwen: 02:42 That's an important one.
Holly Parks: 02:43 Right, yes. Then after that, doing the coaching and the reinforcement, like you said, which really helps improve their return on investment.
Tying the use of those new skills to rewards that they do or competencies that they need to accomplish during the year, and then measuring their results. Clients can measure their results all the way from doing the smile test, "Gee, I really liked that class. It was fun," to, "I learned something today," to changing their behaviors and doing things differently. A company can look at it from the impact it's had organization-wise and if they're tying it to a strategy, this makes a lot of sense. Some companies will even go as far as to do a very rigid ROI study to find out what the results were for them. Now we've said a lot today about training and ROI. Is there any research, to back up what we've said?
Andrea McOwen: 03:39 There is, actually. The ASTD and some other firms have done research in terms of where you get the most retention in a training process. And interestingly enough, only 25% of the retention comes from the training event, and I think a lot of people think that would be the biggest part. 25% comes from the pre-work or the communication strategy, the pre-class surveys, that type of thing. But 50% of it comes from coaching and reinforcement.
Holly Parks: 04:08 Wow. That's huge. When you think about it, the biggest expense really is that training event. But for a few dollars more and a little more time invested on their part, they can really realize a much greater ROI, can't they?
Andrea McOwen: 04:22 Yes, they absolutely can.