PRESS

PRESS RELEASE - SPRING 2005

ARTICLE FOR NEXUS MAGAZINE, WARWICK BUSINESS SCHOOL

Measuring the Return on Investment in Training

Hedda Bird and Jon Hill, both Alumni from the DLMBA programme have recently joined forces to create a practical approach to help organisations measure the return on investment in training.

As with all the best projects, it has grown as a direct result of client demand. ‘A number of our blue chip clients have said to us that the current investment climate means they need to measure training evaluation in the same way that they measure other capital projects,' says Hedda.

Hedda's company 3C Associates runs learning and development programmes for blue chip and public sector clients. ‘In the past, the challenge of actually measuring intangible benefits and ‘soft issues' in training has typically been limited to 360 degree feedback techniques and “happy sheets” filled in by delegates,' she says. ‘We think we have developed a credible method of linking business performance to training delivery through training evaluation which a board of directors will take seriously.'

She is working with Jon Hill's company Wexner to link financial and organisational goals with the work processes of individuals. Wexner is a specialist consultancy set up by Jon and a colleague to improve the efficiency and performance of corporate finance departments.

‘If training is tied to individual performance, as well as financial and organisational goals, it is possible to make the final link between training and overall business performance,' says Jon. ‘This sounds like a simple concept, but the actual delivery is demanding. Managers have to make quantitative judgements about the contribution of the work they manage to corporate results.'

Jon's corporate career with Ford of Europe, Ernst & Young Cap Gemini and Deloitte means he can show HR teams how a finance department will view their attempts to justify training from a financial perspective.

‘Finance teams measure intangibles and make risk based judgements on future asset values all the time. We have developed an approach that combines HR's language and tools with a hardheaded financial perspective,' he says.

3C and Wexner recently led an open seminar with HR professionals at Henley Management College explaining how ROI in training can be implemented in large organisations. ‘HR managers are used to looking at the training needs of individuals within an organisation. They find it much harder to judge how individual training might affect the bottom line performance of the organisation,' says Hedda.

Several of Hedda's clients have already started to measure the financial return of their investments in ‘people'. The first completed project has assessed the point at which a leading contact centre has recouped its initial investment in new staff (customer service training, contact centre training). The next stage will estimate the lifetime value of each staff member at the centre. Another project in the public sector is establishing the value of a customer service team for a police force.

Hedda is a serial entrepreneur, having founded and built several businesses over the last 15 years. She is currently Managing Director of 3C Associates. She met Jon at a seminar group during the DLMBA PART A residential week. ‘I was running an environmental marketing agency at the time, and found it very challenging to be studying alongside highly qualified engineers from Ford,' recalls Hedda.

As often happens with DLMBA students, Hedda and Jon's study time followed complicated paths. ‘We met once more during an exam week' remembers Jon, ‘Hedda was doing part B and I had got as far as part C'

Then, earlier this year when the Business School hosted an open evening to encourage potential projects for the fulltime MBA students, Hedda and Jon found themselves both looking for students for projects.

In the event, neither found a student, but they realised they were both working on closely linked projects. ‘We have enjoyed collaborating on this project as it complements our respective backgrounds in marketing, training & finance' said Jon.

‘Have we established the Return on Investment on an MBA from Warwick? Well not yet, but perhaps we already know it's been one of our better investments.' commented Hedda.

Two more open seminars that look at ROI in training are planned for the spring of 2005. If you would like more details contact 3C Associates on +44 (0) 1491 411 544 or by email.