MINI SERIES (4/11): Eleven reasons to make training and development work for your company

Reason #4: The Solution is Too Expensive

A training and development programme’s ROI might sometimes fail to recoup its high costs. It should be noted that a negative ROI is not always a sign of failure as there can be perceived value through intangibles and significant short-term behaviour change to overcome negative ROI. For example, sending new consultants on a Harvard programme rather than a local one might cost a lot more and produce an initial negative ROI, but it might also generate intangibles such as improved morale, better quality consulting and marketing opportunities where staff are consultants and need strong profiles and an edge over their competitors. In cases where a positive ROI is primary however, a negative ROI would clearly be all that is required to cancel the programme.

So what costs should be included in the analysis? Actual costs are traditionally included in an ROI Impact Study, but too often there is a tendency to use only direct costs or even to minimise them to a certain extent. The good news is that many effective learning solutions can be implemented with creative, inexpensive processes and still drive business results. Formal training doesn't have to be the only solution.

Adapted from the article “Eleven Reasons Why Training and Development Fails... and what you can do about it” by Drs Jack J. Phillips & Patti P. Phillips at the ROI Institute, the Business Evaluation Centre will be featuring a mini-series on this topic, sharing a new point each week. Make sure to catch the weekly update every Monday!