Training: Investment in the future

HR needs to focus on ROI to show a real value for training and development investments.
By Sandra Carrigan
|CHRR, Guide to Management & Executive Development|Last Updated: 05/30/2001

An estimated $750 billion is spent annually on training around the globe, representing an average of almost two per cent of the payroll of many organizations. In North America alone, companies and governments spend about $150 billion annually on training programs.

Measuring the actual return on this investment (ROI) has traditionally been difficult for many organizations, and they have relied simply on feedback from trainees. A 1999 survey, completed by 244 of the 894 members of the American Society for Training and Development, identified the top four barriers to training evaluation as cost, difficulty, lack of training and lack of experience. The survey was conducted as part of a doctoral program at the University of Texas.

The training industry has tended to focus on measuring the reaction of customers and employees to training and learning programs. That trend is changing as companies, governments and organizations are now demanding measurable results based on organizational change and financial return.