Return on investment tells you the percentage return you have made over a specified period as a result of investing in a training programme. On the assumption that benefits will continue to accrue some time after the training, then the period that you specify is critical to the ROI figure you will obtain. You may like to specify a period that fits in well with your organisation’s planning cycle – perhaps a year or two years. On the other hand, you may wish to calculate the period to correspond to the lifetime of the benefit.

It is relatively simple to calculate return on investment:

% ROI = (benefits / costs) x 100

Payback period

Another way at looking at ROI, is to calculate how many months it will take before the benefits of the training match the costs and the training pays for itself. This is called the payback period:

Payback period = costs / monthly benefits

Payback period is a powerful measure. If the figure is relatively low – perhaps only a few months – then you will be much more encouraged to make the training investment. As a measure, it also has the advantage of not requiring an arbitrary benefit period to be specified.

Our Business Benefits ROI Leadership Management Training Calculator structures and simplifies the process of calculating the financial returns from your investments in training; this has been developed in conjunction with the Institute of IT Training. This provides, in spreadsheet form, a template that applies well to the Leadership Management Training process, regardless of content or method. The calculation will also help you quantify the costs of neglecting employee turnover, customer satisfaction, and productivity in your organization.

It can be used:
 

• to forecast potential returns
• to measure actual returns
• to analyse a single training programme
• to analyse a whole year's activity

 

 

The Cost of Doing Nothing Calculator

 

The Blanchard Cost-of-Doing Nothing Calculator is designed to help you quantify the costs of neglecting employee turnover, customer satisfaction and productivity in your organization.