ROI in training: how do HR executives make investment decisions?

Abstract

Abstract — This paper intends to provide a deeper understanding about the current ROI in Training practices applied in organizations. Although the well advanced practices on how to estimate and measure business initiatives benefits, it is still an uncommon practice to apply this knowledge and methodologies on HR initiatives, in particular, training programs. The ability to keep a business sustainable in such a current globalized world, hugely comes from the human capital in organizations, or in other words, from the dynamic competences owned by the company teams. For this reason, the investment in professional training is increasing hence the need on assuring that the right training programs are implemented and contributing to the business goals. Knowing how to measure the ROI in Training is becoming a critical skill for HR Executives as they need to justify whether that investment was effective, or in other words, whether there was any return generated with the training programs to their organization employees and ultimately to the business goals. This paper presents the main results from a research about the current ROI in Training practices used by organizations, where it was possible to conclude that level 1 and 2 (reaction and learning evaluation) is frequently used, however the remaining levels (Impact, Application and ROI analysis) are often neglected. Finally, the article also points out some recommendations and directions for future research on the topic.