How to demonstrate ROI from your people development programmes

Kim Foster

By Kim Foster

29 Aug 2018

People development ensures your employees have the right resilience, innovation and behaviours to perform better, beat the competition and achieve commercial success in this highly competitive economic environment. 

a-man-enjoying-a-training-session.jpg

But how do you demonstrate tangible results to the rest of the organisation and deliver a quantifiable return on investment? Our five recommendations for doing this successfully are as follows:

  • Build a business case
  • Develop tangible performance measures
  • Involve your leadership team
  • Make the design of the programme suit your culture
  • Measure the effect it has

We look at each of these in turn and explain why these outcomes are important and how to achieve them. We've also included them in a handy guide that you can request for free from us.  

1. Build a business case

Why is this important?

Not forecasting the value that a programme will bring you organisation means that it might not get investment approval and start at all. Not measuring the results of a programme means you don’t know it’s bottom line impact and the commercial benefit it provides.

80% of learning and development professionals agree developing employees is top-of-mind for the executive team. But one of the greatest challenges facing people development programmes is the risk of limited budgets and an inability to demonstrate return on investment. 

How can you do it?

  • Include clear objectives. Do this by asking questions to really understand your organisation's strategy, design activity that supports the strategy and improves the workplace skills and capabilities of your employees
  • Don't create a programme and try and shoehorn it into your strategy. Know your strategy first and use it to shape your programme
  • Be clear about what the programme is aiming to achieve. If you are aiming to reduce employee turnover by 25% then include that as a measurable objective
  • Quantify the benefits for your people. When making your case don't just talk about the business outcomes, talk about the people element of the development too. Outline how the training will enable employees to adopt better working practices and approach tasks in new ways.

 

Case study
One manager at a major UK attraction used a development programme to ensure that all of her team were delivering a consistent experience to their customers: "It was clear that our team had varying levels of experience, tolerance and resilience when dealing with challenging conversations with visitors. We wanted to provide them with a programme of development, so they could deliver effective customer service and create the best experience for visitors."

The outcome was the team learnt how to build trust and rapport, leading to an improved confidence in their ability to deal with customers. "The whole team now act in a controlled, confident manner with visitors. Other people in the business have commented about how well they deal with situations."

2. Develop tangible performance measures

Why is this important?

Talk to key stakeholders who will benefit from the programme. Your senior decision makers will tell you what matters most to them. Understand the measures they use and include them in your business case.

One HR director confirmed the benefits of ensuring that people development programmes include metrics and use a commercial approach: "We used to talk about retention and the business switched off. So, we started to talk about the commercial impact of key people leaving to our bottom line and customer experience and suddenly the business wanted to know more. Everything people related needs to be translated into a commercial language."

Another HR director concurred: "Some finance directors and CEOs still perceive people issues to be less important than others they face. So, change your language and the context to raise their significance and put financials alongside them”.

How can you do it?

Strategic objectives versus measure

Requiring the business to increase its market share

Useful measures are the accessible market percentage of total market and the major competitor's market share. 

Low productivity in the business and a need to increase this

Low productivity is often linked with employee motivation, measures to consider are:

  • Manager and employee productivity rate
  • Employee engagement score
  • Attrition percentage

Requiring the business to be more innovative

Consider looking at measures that would show increased innovation such as:

  • Percentage of change initiatives
  • Total number of new products to market
  • New product time to market

Downsizing specific areas of the business

To measure how downsizing has affected your business you could use measures like the revenue per employee or the human capital ROI.

To improve resilience in the business

A measure to consider is the average percentage increase in employee resilience, confidence of employees to fulfill certain tasks or employee engagement.

Drive sales within the business and increase profitability

Looking specifically at your sales team, people development measures could be:

  • Average conversion time
  • Number of clients
  • Average client spend
  • Change in win rate
  • Year on year revenue

Insufficient talent in the organisation with the need to pipeline for future growth

This is becoming more prevalent in organisations, particularly the need to be more diverse. Measures could include:

  • Diversity of talent
  • Number of high potential colleagues
  • Number of internal promotions
  • Effectiveness of succession plans

To improve the service level for new and existing customers

You could look at measures such as:

  • Customer retention rate
  • Overall customer satisfaction score
  • Net promoter score
  • Average resolution time
  • Customer conversion rate

 

  • Measure performance before and after the programme. Agree the key performance indicators and share success criteria. These will help you to measure development and progress
  • Measure before, immediately after and six months after the programme. This ensures change is embedding long term and helps to reinforce the case for future development. Your case shouldn't stop when the programme does
  • Gather quantifiable data so you can link your results to business objectives. This evidence will support future requests for training and planning of people development.

 

Case study
One HR leader was able to prove the value of their development programme by asking about confidence before and after the training: "We saw a 22% increase in confidence overall with a particular highlight being a 30% increase in our people's confidence to coach their teams rather than tell them what to do. In order to embed and sustain these changes, we ask the questions again after three months and six months. I have worked in HR for over twenty years and this was the only time I was able to categorically show a return on investment for a development programme."


3. Involve your leadership team

Why is this important?

Include your leaders as they set the example that others follow. Often leaders at the top of the organisation will agree to a development programme, but not feel the need to attend themselves. To ensure success leaders should role model the behaviours expected and as such, by attending they increase credibility.

How can you do it?

  • Show senior executives how they will profit. Think about how you can help leaders see what's in it for them. Ask them what they would want in a people development programme and invite their suggestions. They might like the opportunity to address delegates themselves so that any programme has a senior 'voice' and visible endorsement from them.
  • Remind key decision makers how any people development programme will make or save them money. Encourage leaders to look at the effects that attrition and disengagement has and what it is costing them and where possible, have data that proves this.

4. Make the design of the programme suit your culture

Why is this important?

Training activity typically interrupts the rhythm of a normal working week. In a sense, as the organiser of a people development programme, this is a time when you are 'on show' to others in your organisation and subject to scrutiny.

People development programmes should be tailored around your organisation to get the best reaction and engagement from people on a development programme

How can you do it?

  • Consider the size and style of your organisation. Research by LinkedIn found that smaller businesses are more likely to focus on training for technical skills, whereas larger companies believe career development and soft skills are more important. Think about what skills are worth investing in for your organisation right now.
  • Include everyone. Where possible, implement a development programme that benefits all your people – senior and junior. While developing your leaders may be at the top of your agenda, it is also worth considering other groups of employees who could benefit from a development programme. Create flexible training options, which will cater for the different learning approaches needed at every level.
  • Make sure it reflects your industry. Incorporating characteristics of your industry to your people development programme will pay off. For instance, if you work in a highly regulated industry, how can you reflect this to increase expertise in this area to give you competitive advantage.
  • Choose the right time of year. It is better to have training activity during a quieter period to avoid work disruptions. This will also ensure employees are not put under any additional pressure and the impact of the training is positive.
  • Get the location and setting right. Plan ahead with regards to the location and setting for your training and don't treat is an afterthought. Think about the number of employees attending, how will you arrange any groups and how will the training be delivered as this all affects your venue choice. Consider the environment you want to create and how much space you might need.
  • Do the employees work in the same place or are they spread out over different sites? Will the training be held at your offices or will you need to hire a venue? Delivering training offsite certainly gives the impression to delegates that this is 'not another day in the office'.

5. Measure the effect

Why is this important?

Quantifying behavioural changes and anecdotal feedback from programme attendees means you gather a combination of both quantitative and qualitative data. The quantitative will allow you to demonstrate improvements in financial performance. The qualitative can be in the form of feedback from your employees to assess attitude and behavioural changes.

How can you do it?

  • Surveys, video interviews and face to face meetings are all perfectly acceptable methods of getting feedback from delegates. A good assessment method will identify the strengths and gaps in your development programmes. It will also help you to guarantee consistency in your approach.

In conclusion

Quality training and development requires careful consideration and planning, but following the steps above mean the benefits will pay for themselves and ensure that you get return on investment.

For a friendly conversation about your organisation's people development challenges, call us on +44 (0)1491 414 010.

Get in touch

Call us or email us +44 (0)1491 414 010 or simply complete our request a call back form