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Weeding out waste

With limited budgets, workplace learning and workforce development needs to demonstrate its role in delivering value to the business. Jane Massy, CEO of abdi Limited, says organisations must now look to ‘weed out waste’ by giving greater focus to planning and measuring human capital investment.

Whether in the public, private, or third sector, those responsible for staff development should be asking themselves a simple question: why would I spend a penny on workplace leaning until I know exactly what it will deliver? Fads and trends in training will come and go, but its fundamental principle will stay rooted; it is an investment, and should be looked upon with the same rigour and discipline as any other.

The biggest challenge is turning the outcomes of learning and development into things which can be measured, to use as key components in the planning and decision-making process. To use a business cliché – failure to plan is planning to fail. Firstly, let us set aside the misconception that human resource teams are business add-ons. This is not the case. They are the absolute essence of businesses because they are responsible for the recruitment, development, and delivery of talent – specifically tailored to meet particular business ends. If they can dig deep and deliver value for money people management – and provide solid evidence to demonstrate this to the ever more demanding board – they will further enhance their credibility and demonstrate their own value, just like any other segment of a business will be expected to do in the new era of accountability and efficiency.

To illustrate what is meant by ‘weeding out waste’ on training, I refer to a Confederation of British Industry study which I recently contributed to, The Shape of Business: The Next 10 Years, which details the fresh challenges facing businesses in the post-recession era. The report identifies four core strands in which businesses will be required to adapt, and one of them is the workforce. The report indicates that ‘funding for non-essential training and general career development training not directly aligned with corporate goals will be scaled down substantially or even stopped.’ Poorly planned investment is wasteful. 

 “You cannot commission a training session or begin a lengthy programme unless you yourself have a clear picture of the desired behavioural and business impact change that should come about as a result”

Of all the ‘outcomes’ from workplace learning and development, the hardest to measure are behavioural change and its relationship to company performance. The best HR professionals will be asking themselves: ‘do I know what good performance will look like when a member of staff returns to work?’ and ‘what do we really understand about a change in behaviour and work performance and the relationship with our business metrics?’ You cannot commission a training session or begin a lengthy programme unless you yourself have a clear picture of the desired behavioural and business impact change that should come about as a result. Although challenging, behavioural change is far from immeasurable, as is linking this change to business impact. abdi recently concluded a programme with Volkswagen Group UK which evaluated the training of salespeople within its external dealerships. Data was used to demonstrate that VW had achieved ROI of more than double the initial training and evaluation costs. In the majority of cases, it was proved that training had added significant value, by showing a link between improved mystery shopper scores for individual salespeople (indicative of positive behavioural change) and the numbers of cars sold by those people. Data was also analysed to isolate the impact of other factors on the changes in sales. Crucially, whether or not the evaluation flags up good ROI or not is largely detached from the purpose of the exercise.

My experience shows that those who adopt the ROI methodology achieve the most fruitful results when employing the highest level top-down requirement for good planning and analysis with bottom up data collection and analysis. abdi’s clients have largely implemented the evaluation of training via central ROI networks, established by senior executives. As a HR director, it might be you championing this, or it may be a member of the board. Either way, it must be ensured that it is supported at the highest level to give it every chance of success.

Staff development is too often seen as a box-ticking exercise – something which carries many faults, chief among which is the premise that the mere attendance of a staff member on a course represents a successful outcome. Clearly, this isn’t reportable results data, and will not stand up to scrutiny. Organisations have to start asking themselves whether training is part of a wider business plan; whether full (including indirect) costs have been taken into account (which can be up to ten times higher than direct costs); whether training addressed a particular problem that was known at the outset; and whether lessons can be learned from all results.

The ROI methodology is all about future planning, not retrospective cost justification. Organisations need to start looking more closely at their approach to human capital investment – to do so would be to aid the process of green-shoots recovery.

Jane Massy,
CEO abdi Limited

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