Return on Investment: calculating the value of staff training

Whether you’re a new employee or a manager looking for ways to bring your team together, staff training is an opportunity that can help everyone in the org


Whether you’re a new employee or a manager looking for ways to bring your team together, staff training is an opportunity that can help everyone in the organisation. It shows employees that managers are committed to employee development and that everyone has the opportunity to learn new skills and grow their careers. But how much should you invest in providing training? 

If you don’t have a clear strategy in mind, it might be difficult to determine the ROI of investing in staff training. This article will help you evaluate what kind of value your company gets from offering training programs, and show you how to calculate Return on Investment (ROI).

What is Return on Investment?

When considering whether or how much to invest in staff training, you have to first understand what return it will generate. The return on investment is the value of staff training that a company gets for the resources it puts into training. 

It’s important to note that return on investment does not measure the effectiveness of training. Rather, it’s a way to help you determine how much impact your company’s training programs can have. 

A company’s return on investment is influenced by a number of factors, including how much time is spent providing training, how many employees are involved, and the type of training provided. In addition, the return on investment can vary based on the industry. For example, companies that operate in high-growth industries, such as healthcare or technology, are likely to see higher returns on investment than those in less-demanding industries.

Why is calculating the value of staff training important?

If you don’t understand the return on investment of your staff training programs, you may end up investing too much or too little. However, by calculating the value of staff training, you can ensure that everyone in your organisation knows what to expect from training programs. This will make it easier to determine the best strategies to create a training culture and create more effective training programs. 

When companies don’t know the value of their staff training programs, they may not recognise the opportunity to invest in education. This can lead to a “training hoarding” culture, where managers are reluctant to create training programs for fear of wasting resources. If this happens, employees may be left feeling undervalued and uninterested in continuing to learn new skills.

How to calculate ROI for staff training

To calculate the value of staff training, you will need to determine how much revenue a new or existing employee would generate after training is complete. If you don’t have data on the revenue generated by new employees after they’ve been trained, you can measure the value of training new employees yourself or survey your managers to find out which new employees generate the most revenue. 

Once you’ve gathered that data, you can use a formula to determine the ROI. To calculate the value of staff training, you first need to determine the revenue a new or existing employee would generate after training is complete. To do this, you need to know the average revenue of new hires in your industry. Once you have that data, you can use a formula to calculate the average salary a new employee would generate after training.

Which staff training should you offer?

Before you decide how much to invest in staff training, you have to ask yourself: 

  • What do employees need most from their managers? 
  • Where are there skills or knowledge gaps? 
  • And what do your employees believe will be beneficial to them?

When you know the answers to these questions, it will be easier to determine what types of training to offer, which training to prioritise and how much to invest.

Which staff training should you invest in?

When it comes to deciding which staff training programs to invest in, you must first decide how much time and energy you want to put into creating these programs. You can’t just decide to start offering staff training. You also have to determine what training strategies are effective and what employees want to learn. 

That being said, there are some staff training programs that have been proven to generate higher ROI. One example is formal training programs that are conducted by qualified trainers and delivered on a regular schedule. Other types of training, such as on-the-job training, may not always generate as much revenue as other types of training but can come with many other benefits such as ease, cost-efficiency and higher engagement.

Wrapping up

Staff training can help your employees learn new skills, grow their careers, and feel more connected to your organisation. It’s important to decide how much time and energy you want to invest in creating staff training programs. Once you have that figured out, you can use this guide to help you determine which staff training programs to invest in.

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