Friday, April 04, 2014

HR Community Owns Training ROI Calculation

I have not thought much about the HR community ever since I completed my undergraduate major in that subject.  I washed my hands of the profession in 1995 after concluding it was not a path to high corporate achievement.  I have a newfound respect for HR right now after discovering that they can contribute to the bottom line.

Check out SHRM's ROI methodology for assessing training.  ASTD also publishes material on the ROI from learning.  The equations for ROI are pretty simple, just like many other concepts in finance.  The hard part is assembling the data measuring use cases to make "before and after" comparisons.  In other words, comparing error rates, message delays, etc. after training a workforce should show cost savings that exceed the cost of that workforce's training.

Assembling the data in pre-enterprise computing days would have required some Cheaper By The Dozen type of efficiency expert timing workers with a stopwatch and collating their misplaced records.  Enterprise computing makes it all so easy today.  Knowledge management reps can track workflows in MS SharePoint or Evernote suites.  Tally up the missing files and misdirected workflows for those post-training comparisons.  Even the training itself can be almost costless with self-directed modules requiring little downtime.

I'm glad I never worked in HR.  Executives still see it as a cost center because most HR people don't think in ROI terms.  Maybe that's why I never belonged in that field.  I changed course with an MBA in finance.  I would rather invest in faceless corporations than live human beings.  Knowing the ROI for human effort takes some of the risk out of dealing with people.