Return on Investment
Return on Investment

Stop Wasting Your Training Budget: How to Get Real ROI on Soft Skills Programs

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A Realistic Plan

Soft skills with hard results is a slogan we often use at Conversari. But how do we show it? How do you prove tangible results from skill sets that are seemingly intangible?

HR executives are under scrutiny to demonstrate to their superiors and internal clients the value of training. And they should be. No budget decisions should be made without some consideration of ROI.

Yet early in our experience, we discovered a secret: companies rarely measure ROI on soft skills training rigorously.

It’s not due to lack of methodologies. They exist. Dr. Jack Philips and colleagues created a solid methodology in the 70s, and it still remains highly relevant.

So why isn’t it used more often if it’s been around for decades? We note two dilemmas:

  1. Rigorous application is extremely resource intensive. It requires extensive data collection and analysis. HR departments are notoriously overworked. Rarely do they have the resources at hand to conduct this work except for occasional enormous, front-line employee training initiatives. Training programs focused on soft skills for more elevated positions rarely get this kind of attention.
  2. The data is highly sensitive. HR departments are hesitant to outsource this work to consultants because it often entails highly confidential information. Even as trusted partners, we at Conversari respect that few clients are willing to share this information with us.

What soft skills are we talking about?

Read our seminal piece on the Human Value Factor ™ here.


What Not to Do

How was the lunch?

The biggest error is to focus only on opinion: did participants like the training or not?

What do I mean? Let’s review Philip’s methodology, which notes 6 levels of data that can be collected about training effectiveness:

  1. Did participants like it?
  2. Did participants verifiably learn something?
  3. Can they apply it in their day to day work?
  4. If participants apply new skills, can we measure the impact?
  5. If we can measure the impact, can we compare the gains to the costs of the training to generate an ROI calculation?
  6. Are there intangible benefits too?

Many training programs only measure Level 1: Reaction. You know the story. HR sends a satisfaction survey at the end of the training asking for their opinion. Often these surveys are just as concerned with the quality of the training room and the lunch as the training itself.

And you can imagine the problem here: participants can love a training but never apply it in a meaningful way. Six months after the training, business unit directors question if the training was worth it.

Same problem with Level 2: Learning. Even if we can prove with tests or role-plays that the participants learned new skills, does that guarantee that they are applied in real-world application?

This means we have to delve into Levels 3 and 4.

5 Practical Steps to Measure ROI with Limited Resources

So what do we recommend to our clients?

1. Talk about ROI with your internal client from the very beginning. Your internal client says, “We need more leadership skills!” Here are the questions we often ask to help frame a project in terms of business impact from the very beginning:

  • “What are your area’s objectives for which you think you need more leadership skills to accomplish?”
  • “If your team acquires these leadership skills that you are envisioning, how would you know? What are the team’s KPIs that would be directly affected by new leadership skills?”
  • “If this KPI improves by X percent, what is the financial impact for you, the team, and the business?”

2. Negotiate the KPIs that will be measured, and how. Frame the entire project around these KPI’s. Refuse to propose solutions until you have the KPIs defined and approved by all affected stakeholders. If there is confusion or lack of clarity around the expectations, it will haunt the project later.

KPIs

Three other things to consider:

  • Ideally, use existing KPIs that your organization already measures. This ensures that the project is aligned with statistics that your organization already cares about. It also reduces workload to collect data.
  • Make sure there is a direct logical link between the training and the KPI in question. You are making a hypothesis here. So for example, to say that the training will directly impact sales figures is risky because there can be multiple factors that affect sales numbers. Instead, find a KPI that is realistic. “The length of time to close a sale will decrease by X percent because our proposals and presentations are more concise and impactful” is a more realistic hypothesis to test.
  • What if the KPIs don’t exist? Invent them. For example, create a brief pre- and post-survey using an easy tool like SurveyMonkey or Google Forms to collect data.

3. Make sure the training is designed specifically to tackle your KPI objectives. There might be pre-packaged training that works. It might also be worth a custom designed program to make sure that training is optimized to the KPIs you are trying to move.

Whoever is designing and delivering the training must have the desired KPI impact at the front of mind, and mention them to the participants at the very beginning of the training cycle.

4. Put the burden of proof on the participants. What is the best (and easiest) way to measure the impact of training? Motivate the participants to demonstrate it. Here are ideas we’ve tested with great results:

  • Reconvene training 1-3 months later to share results. Reserve a 2-hour follow-up session and ask participants to bring examples of what they have applied and the impact they have observed. Send reminders and additional tips via email in order to keep the topics and new skills fresh in everyone’s memory.
  • Mini TED Talks and other evidence: even better, make it an event. Ask participants to film themselves  or present live a 5-minute presentation of what new skill they learned, how they applied it, and the impact they observed. Then give participants an audience. Invite managers to observe, or transmit the event via video conference. This type of event is a win for everyone: HR collects evidence to demonstrate ROI; participants share best practices, earn visibility and feel proud of their impact; managers observe and verify the impact first hand and often become champions of future training efforts.
  • Share these stories to a wider audience: Brag on social media about the impact (if policy allows). If not, look for other internal communication channels that allow impact stories to be shared: newsletters, news boards, etc.

5. Talk about ROI with your internal client (again). Close the project cycle with a conclusion of the financial impact of the training that the client can sign off on. Brainstorm how future iterations of the training can be improved to have even greater impact, or other modifications that can make the training’s impact more visible or easier to measure.

Training Impact Can Be Demonstrated

Consultants, academics and HR executives have wrestled with showing ROI on training for decades. There is no easy answer. Working with our customers, these are some of the critical steps we’ve taken. And the good news? They can be highly effective for shaping the perception of business impact and still land within project budget constraints.

Want to discuss further? Contact Kenneth or our team at Conversari to arrange an appointment.

Creative Commons License This work is licensed under a Creative Commons Attribution 4.0 International License.
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