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Training Metrics and ROI: Formulas and Descriptions

Training is something that corporate leadership tends to take for granted, but there is real value in engaging and well-designed training programs. As a learning and development professional, do you have the right training metrics to show management the value of your training program?

In this article, we will cover why you need training program metrics, creating smart goals, along with valuable training and on-the-job metrics for you to measure.

Why You Need To Track Your Training Metrics

LinkedIn Learning reports that 49% of L&D professionals are challenged with getting managers to make learning a priority for their teams.

Tracking your key performance indicators is crucial for learning and development professionals. Everything in a business needs to show return on investment; otherwise, you risk getting your budget cut, or worse, your entire program could get cut.

Creating SMART Goals

The first step in setting metrics for your training program is to ensure that you have the right goals. You will need to work with the managers and leaders in your organization to decide the best targets for your learning and development team. It’s crucial to ensure that your goals support the overall company strategy; for example, if your company has set a goal to hire a large number of people, you should look into streamlining your onboarding process.

When setting goals, its recommended to use the SMART methodology:

  • Specific – make your goal clear and precise
  • Measurable – outline metrics to track your progress
  • Achievable –  your goal should be realistic
  • Relevant – make sure your goals align to the company mission and department goals
  • Time-Based – put a deadline on your goal

Read More: SMART Goals- Definition and Examples

HR Training Metrics and Formulas

Course Completion Rate

Number Of Completions ÷ Number Of Employees Participating X 100

The course completion rate shows you how many employees have successfully completed your training program. Whether it’s measured by modules, by lessons, or by programs, you should measure how many employees start and successfully finish the training assigned to them.

Assessment Pass Rate

Number Of Employees Passed ÷ Number Of Learners X 100

The assessment pass rate shows how well your employees retain and recall their training enough to pass the assessment. This metric only works if you have assessments in your training program applicable to the content.

Employee Retention Rate

Number Of Employees Still Employed ÷ Number Of Employees At The Start Of Measurement Period X 100

Measuring the employee retention rate will show you the percentage of employees that are still with your company after a certain period of time, most commonly used is 90 days. Proper orientation and onboarding can have a considerable effect on your retention rate.

Training Experience Satisfaction

Sum Of All The Ratings / Number Of Answers

You can use surveys to understand how your employees felt about the training experience, whether it’s about the instructor, modality, tools, or content. You can collect this information through surveys where the employee can rate the training aspects from 1 (Strongly Disagree) to 5 (Strongly Agree).

Training Cost Per Employee

Training Costs/Number of Trainees

The training cost per employee will measure the investment in your training program. The number can be used in other metric formulas and to measure how effectively you can use your training program resources. Your training costs can include subject matter experts, instructors, materials, employee salary while being trained, and more.

Training Return on Investment

Change In Profits Related To Training/Cost Of Training

Your training return on investment (ROI) will tell you how much your program benefits the company, in an actual dollar amount. It may be difficult to track the change in profit related to training – SMART goals and specific topic training will be easier to track.

Employee Return on Investment

(Total Revenue / Total Number of Employees) / (Total Employee Costs / Total Number of Employees)

The theory is that if you invest in your employees, it will boost their performance and elevate your business. By calculating employee return on investment (ROI), you can see the financial results to your investment in your workforce (training, benefits, events, engagement, etc.).

On-The-Job Training Metrics

Workers’ Compensation Incident Rate

(Number Of Injuries And Illnesses X 200,000) / Employee Hours Worked

Workers’ compensation incident rate will help track the effectiveness of your safety training program. This is the same calculation used by OSHA and should be monitored regularly to track trends with your company.

Sales Close Rate

Number Of Successful Sales/Number Of Opportunities X 100

The sales close rate will measure the effectiveness of your sales training program. This can be calculated as a sales team or individually by salesperson to see how successful they are at closing a sale and generating revenue for your company. This is also a metric that can be tracked to find trends that reflect your sales force or the market.

Average Customer Satisfaction Rating

Number Of Positive Responses / Number Of Total Responses X 100

Customer satisfaction ratings can measure the effectiveness of your customer service or soft skills training. You can survey your customers to measure their experience with your employees. Another way to measure this is with a Net Promoter Score.

Do You Measure Up?

In this article, we covered why you need training program metrics, creating smart goals, and popular training and on-the-job metrics for you to measure.

According to LinkedIn Learning, only 27% of L&D pros report that their CEOs are active champions of learning. The best way to get leadership buy-in is to show them healthy metrics and a positives effect on the business’ bottom line.

How does your training measure up?

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