ROI in training: How to calculate investment in corporate education?
Posted: Sun Jan 05, 2025 6:54 am
The increased importance given to corporate education has reached all areas and sectors, across a wide range of industries. The returns on these courses, training or workshops provided by companies to their employees are generally proven to be positive.
Creating a culture of learning and development in organizations, so that people grow professionally, the company has better results and is more efficient.
Even so, there are still many companies that do not allocate part of their profits to reinvest in their employees, or even directors who do not believe in the potential impact of this type of education, making it necessary for the Human Resources sector to do everything possible to convince them through data, indicators and reports.
One of the most relevant ways to calculate this return is by calculating the Return on Investment, or, to put it simply, the ROI in corporate training.
Although the method is clear, it is often not so simple to jordan email list perform such a calculation based on information from courses or training provided. With the advent of distance learning, this has become easier and such a calculation is increasingly useful for demonstrating to company managers the returns from the financial value invested.
Throughout this article we will explain what ROI is, the importance of calculating it, how to apply it clearly and the benefits obtained from investing in training, all in practice!
What is ROI in corporate training?
This concept, widely used in other areas with financial investments in the company, such as marketing, can also be applied to training in your company.
Return on investment (ROI) is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of several different investments. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or ratio.
Importance of calculating ROI
Education in companies has been growing significantly in the last decade, as positive consequences are generated such as increased productivity, efficiency and effectiveness of employees, a better work environment, and the development of new skills and competencies for the team.
Despite all these benefits, measuring it in a practical way is not easy. There are sectors that are easier, such as sales, where it is possible to crudely compare numbers between other cycles, but in others, it is a process that works as a sequence of positive spillover, with the efficiency of one sector affecting the other, which received clearer information and was able to make a faster and more accurate decision, for example.
Calculating ROI in training can make all the difference in a company's decision to invest in this important sector, as it makes it easier for HR to demonstrate the positive results that this culture of ongoing improvement can have on the company.
Kirkpatrick
How to calculate ROI in training?
The ROI formula is the same used for all sectors that use this metric, that is:
ROI = (Final Result – Cost)/Cost
In other words, you divide the difference between the amount raised and the amount spent on training and divide it by the same cost used previously. Let's look at an example:
A training for the entire company cost R$15,000.00 and the monthly result increased by R$45,000.00 after it was provided. The calculation will be:
ROI = (45000-15000)/15000 = 2
This shows that for every real spent on employee training and development, there was a return of R$2 in the company's results.
How to calculate training costs?
The costs involved must be calculated accurately so that the ROI in training is as accurate as possible. In this way, all items involved must be considered, if the course was in person, location, accommodation, transportation, food, value/hour that employees are not working, facilitator, among others. If the environment was online, the LMS (Learning Management System) platform , video production, among other hidden costs.
Creating a culture of learning and development in organizations, so that people grow professionally, the company has better results and is more efficient.
Even so, there are still many companies that do not allocate part of their profits to reinvest in their employees, or even directors who do not believe in the potential impact of this type of education, making it necessary for the Human Resources sector to do everything possible to convince them through data, indicators and reports.
One of the most relevant ways to calculate this return is by calculating the Return on Investment, or, to put it simply, the ROI in corporate training.
Although the method is clear, it is often not so simple to jordan email list perform such a calculation based on information from courses or training provided. With the advent of distance learning, this has become easier and such a calculation is increasingly useful for demonstrating to company managers the returns from the financial value invested.
Throughout this article we will explain what ROI is, the importance of calculating it, how to apply it clearly and the benefits obtained from investing in training, all in practice!
What is ROI in corporate training?
This concept, widely used in other areas with financial investments in the company, such as marketing, can also be applied to training in your company.
Return on investment (ROI) is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of several different investments. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or ratio.
Importance of calculating ROI
Education in companies has been growing significantly in the last decade, as positive consequences are generated such as increased productivity, efficiency and effectiveness of employees, a better work environment, and the development of new skills and competencies for the team.
Despite all these benefits, measuring it in a practical way is not easy. There are sectors that are easier, such as sales, where it is possible to crudely compare numbers between other cycles, but in others, it is a process that works as a sequence of positive spillover, with the efficiency of one sector affecting the other, which received clearer information and was able to make a faster and more accurate decision, for example.
Calculating ROI in training can make all the difference in a company's decision to invest in this important sector, as it makes it easier for HR to demonstrate the positive results that this culture of ongoing improvement can have on the company.
Kirkpatrick
How to calculate ROI in training?
The ROI formula is the same used for all sectors that use this metric, that is:
ROI = (Final Result – Cost)/Cost
In other words, you divide the difference between the amount raised and the amount spent on training and divide it by the same cost used previously. Let's look at an example:
A training for the entire company cost R$15,000.00 and the monthly result increased by R$45,000.00 after it was provided. The calculation will be:
ROI = (45000-15000)/15000 = 2
This shows that for every real spent on employee training and development, there was a return of R$2 in the company's results.
How to calculate training costs?
The costs involved must be calculated accurately so that the ROI in training is as accurate as possible. In this way, all items involved must be considered, if the course was in person, location, accommodation, transportation, food, value/hour that employees are not working, facilitator, among others. If the environment was online, the LMS (Learning Management System) platform , video production, among other hidden costs.