As a business owner, you want your employees to succeed and hope that will reflect on the business and boost the bottom line.
Investing in your employees to give them the best opportunities to succeed is one way of doing that. Training workers, however, can be an expensive proposition for any size business.
Human resources industry think tank the Human Capital Institute estimates that it can take more than six months for a new employee to make enough of a contribution for a business to break even on the initial training he or she received.
Measuring the return on investment for employee training can be harder to quantify because of the many variables you have when trying to weigh and judge individual performance, including learning and retention abilities.
Here are five ways to see whether the training you've spent money for has stuck and is paying back.
1. Work logs. One way to measure the effectiveness of training is to have your employees make logs of their daily tasks. The logs can be as detailed or as informal as you want to make them, the idea being is that they show what an employee accomplishes on a daily basis.
Such logs are useful when your business needs to track things like outbound sales calls made or if the employee is required to meet a minimum number of invoices completed each day.
2. Self appraisals. These types of measurements keep the lines of communication open among employees and your business.
For self-appraisals, ask your employees about the training and seek input on what they believe were the effective and not-so-effective parts of training. Let them assess how they have put the training to work in their daily work routine.
3. Team appraisals. Work teams also can benefit from the open communication that self-appraisals fosters from frank, open discussions of what works, what doesn't and what could be done to make something better.
In the deadline-oriented world of marketing, TCB Marketing LLC in Pennsylvania puts team appraisals to work each week through weekly Monday morning meetings to review the projects for the week, according to company president Tanya Bamford.
In addition to the meetings, the three-person company and its team of freelancers also uses a project-management system to keep track of its projects.
"Having these weekly meetings not only keeps us on target for meeting deadlines, but also gives us the opportunity to celebrate our successes and discuss areas where we need to improve," she says.
4. Qualitative assessments. When using qualitative assessments, your business will be looking at how effectively an employee works in a situation, puts training into use and how the worker handles a crisis. These assessments differ from quantitative assessments—such as work logs—because you're measuring not how much work the employee does, but how well the task is performed.
The measurement can be particularly useful in industries like information technology and database management, where employees need to be able to react and handle complex issues—sometimes at a moment's notice.
Businesses can measure "not just the task at hand, but what happens when a crisis situation brings up an issue that the employee has not had to handle before (and) has had no training in. What do they do?" says Eveline Taylor, chief information officer for database management company The Maranatha Group.
"A mature employee will not be afraid to ask questions, but will also be one who tries to keep up in the field. I say 'tries,' because software is constantly changing, and there is no way to keep up without some significant effort," she says.
5. Observation. Seeing is believing in this case, and you want to be able to see your employees put training into action. This type of assessment is particularly useful in measuring the performance of employees in sales or customer service positions. How they treat the customer can reflect on the business' credibility and reputation.
The drawback to this type of assessment is that, as a business owner, you have to be sure the employee doesn't see you observing their actions because they will be on their best behavior, according to Maranatha Group's Al Taylor.
That's where a "secret shopper" can be useful to test employees, he says. A related way to measure ROI on training is to ask for feedback from customers on employee performance.