How to Measure the Effectiveness of Corporate Training

Do You Know How to Measure the Effectiveness of Corporate Training?
Although most believe that the ability to measure the effectiveness of corporate training is too challenging or too expensive, evaluating the impact and return on training investments can and should be done in the right situations.  For example, spending more time or effort on training measurement than the value of the measurement itself rarely makes sense.  But measuring training adoption and impact levels to reinforce coaching and accountability for change can provide a major boost.

Let’s look at the research and a proven model to measure the effectiveness of corporate training.

The Research: Measure the Effectiveness of Corporate Training
The research on the impact of corporate training is sobering.  While most companies believe in the need to upskill their employees to execute their strategies and retain top talent, leaders are frustrated with the return on their training investments.  The inconsistencies related to training measurement leave most L&D professionals scrambling to reactively prove the impact of training to justify their training investments before budget and executive team meetings.

There is a better way.

The Good News: Most Companies Think People Development Matters
If you follow the money, most companies think that investing in the development of their people matters.  Last year, U.S. Corporations spent over $160b on employee development.

• According to McKinsey, almost 90% of companies report critical employee skill gaps that need to be addressed to execute their business and people strategies.
• In the latest BCG survey, 75% of organizations plan to make significant investments in talent retention and development.
• PwC found that 79% percent of CEOs are concerned that a lack of essential skills in their workforce is threatening the future growth of their organization.

The Bad News: Most Leaders Are Frustrated with the Return on Corporate Training
Even though the majority of companies plan to increase investments in the development, engagement, and retention of top talent, investments in corporate training often yield disappointing results.

• Only 3% of respondents to a recent McKinsey survey said their companies’ skill-building programs are “always effective” at achieving desired objectives.
• According to a Forrester report, about 40% of employees and managers are unsatisfied with their current on-the-job training.
• Our own training measurement research of over 800 training projects found that only 1-in-5 participants change their behavior from stand-alone training.

What is the Disconnect?
One key disconnect is that most companies haven’t found an effective way to measure the effectiveness of corporate training.  Most argue that the true impact of corporate training programs is too difficult or too expensive to measure because of all the workflow and environmental variables that must be considered.  We find that the true problem lies in the training function’s inability to design learning solutions based upon desired business outcomes versus simply learning objectives or core competency matrices.

The History of How to Measure the Effectiveness of Corporate Training
Dr. Donald L. Kirkpatrick is credited with creating The Kirkpatrick Model as part of his Ph.D. dissertation in the 1950s.  Through decades of application and validation, it became the standard for demonstrating the effectiveness of training programs.  Here are the 4 levels of the Kirkpatrick Model Training Evaluation Model:

• Level 1: Reaction
  Level 1 Training Measurement measures the degree to which participants find the training favorable, engaging, and relevant to their jobs. It is often called training participant satisfaction.  While participant self-reported satisfaction alone does not equate to training effectiveness, it does offers helpful insights into the perceived value of the content, instructional design, and facilitator.

  We consider Level Training Measurement to be the ticket to play the game.  If these scores are low (e.g., less than 90%), you have a major problem.  If these scores are high, you have set the stage for potential learning, engagement, and career development.

• Level 2: Learning
  Level 2 Training Measurement measures the degree to which participants acquire the intended knowledge, skills, attitude, confidence, and commitment based on their participation in the training. This can be measured through behavior-based self-assessments, pre-and-post assessments, observations, simulations, performance tests, and skill demonstrations.

  But learning alone does not equate to training effectiveness.  Why?  Because it is possible to KNOW something and not be able to DO it consistently back on the job.  If designed properly, the level of learning sets the stage for desired on-the-job behavior and performance change.

• Level 3: Behavior
  Level 3 Training Measurement assesses the degree to which participants apply what they learned during training (e.g., skills, knowledge, approaches, and attitudes) when they are back on the job. This is where theory meets practice and KNOWING meets DOING. Level 3 Training Measurement is typically determined through performance metrics, supervisor evaluations, and peer feedback.

  Done right, Level 3 Training Measurement unearths evidence of behavioral shifts catalyzed by training interventions while isolating other variables.

  While behavior change alone does not equate to training effectiveness, it helps to set the stage for your desired results.

• Level 4: Results
  Level 4 Training Measurement assesses the degree to which you achieve desired outcomes as a result of the training. Ideally, Level 4 Training Measurement is judged against strategic priorities using rigorous data analysis and correlation studies.  Examples of desired Level 4 outcomes from training include:

  — Increased sales revenue, margin, win rate, portfolio mix, deal size, and cycle time.
  — Higher levels of customer acquisition, loyalty, growth, and satisfaction.
  — Improved leadership execution effectiveness of key corporate strategies.
  — Better employee attraction, development, performance, engagement, and retention.
  — Achieved project cost, quality, and time targets.

  Level 4 Training Measurement is required to truly assess whether corporate training initiatives drive meaningful business results.

3 Steps to Better Measure the Effectiveness of Corporate Training
To measure the effectiveness of corporate training, you need to understand three main steps.

1. Agree Upon Desired Results
   Just like any other important business or change initiative, your first step is to create a solid business case that identifies the desired outcomes you are trying to achieve. Without this step, it is impossible and unnecessary to measure Level 4 Results. And frankly, without it, it is most often unnecessary to measure Levels 2 through 4.

   Sadly, most learning and development strategies skip this step.  They mistakenly focus solely on skills, competencies, or learning objectives in a vacuum.  While these are easier to define, they are not enough.  Unless you know the value of upskilling compared to everything else on your target audience’s plate, how can you decide if it is worth the time to train them or measure the results?

   The truth is that many training programs are simply training events offered as a hygiene approach in response to employee engagement survey results to provide career development opportunities and to build a healthy workplace culture.  There is nothing wrong with this approach.  In fact, it can be your business case as it informs your measurement plan to only measure Level 1 Participant Reaction.

   Are you and your key stakeholders clear on what you are trying to achieve from a business AND learning perspective?

2. Identify the Metrics to Move
   Once you and your key stakeholders agree upon what you are trying to achieve, your next step is to agree upon how success will be measured. For each business and learning objective identify how you will measure success or failure.  Ideally, you and your key stakeholders should agree upon one or two key success metrics that matter most.

   Here are two recent client examples:

   Desired Result
   Increased awareness and insight about how to begin to make better decisions in a pressure-packed and matrixed environment.

   Metrics to Move
   (1) Level 1 participant satisfaction to assess their receptiveness to new ways of decision making
   (2) Level 2 participant self-reported knowledge gain of the agreed upon decision making process, language, and tools to assess lessons learned

   Desired Result
   Improve sales revenue

   Metrics to Move
   (1) Level 4 Results of 20% overall revenue increase
   (2) Level 3 Behavior showing 100% completion of pre-call planning preparation for all key accounts

3. Create a Measurement Plan
   Remember, not every corporate training program needs to be measured. Once you and your key stakeholders agree upon what you are trying to achieve and how success will be measured, your next step is to design a measurement plan that makes sense for your unique culture, budget, and situation.

   For example, at one client where the goal was to upskill leaders responsible for running business units as part of a company-wide restructure, we used leadership simulation assessments to measure current skills and behaviors against needed leadership skills and behaviors.  This allowed us to develop 1×1 coaching programs supported by customized behavioral nudges to help close the key leadership skill gaps.

   At another client that wanted to increase sales win rate, we measured pre- and post-training win rates and compared the results to a control group that did not receive business sales training or sales management training.  That allowed the client to target the sales processes and solution selling skills that had the greatest impact to their specific situation.

   To be valuable, each measurement plan must be customized until it is practical and relevant to the participants, their boss, and the company as whole.  Where you should be on the training measurement spectrum from Level 1 Participant Reactions to Level 4 Tangible Results depends upon what you are trying to accomplish and how important the desired results are compared to other pressing priorities.

The Bottom Line
The ability to measure the effectiveness of corporate training is not overly difficult once you know what you are trying to accomplish and how success should be measured.  Don’t start with “How to Measure.” Start with “What to Measure and Why?”

To learn how to create a training measurement plan, download Training Measurement Best Practices – 5 Practical Steps to Make it Happen