Return on Investment in Training. Myths and Realities.

Changes in the economy and declining profit margins are prompting many businesses to question the value of their training investments. Companies that had been operating under the assumption that they were reaping positive benefits from their training efforts are asking their human resource managers to provide proof that their training programs are resulting in positive returns. Cost/benefit analysis is one means of evaluating training returns because it provides evidence of bottom-line profits. If the reasons for evaluating training are to ensure a correlation between training and a specific outcome, this highest level of evaluation may be required. However, if the reason for training is to improve soft-data areas such as customer satisfaction, employee morale, and so forth, other methods, such as surveys and interviews, may provide the evidence required to support training. The literature has enough evidence to support the position that investment in training results in positive returns. The nature of these returns may vary among organizations and workers, but it is important to remember that wages and productivity are not the only variables guiding a company's investment in training. (Contains 17 references.) (YLB)