Importance of Training as a Return on Investment

618 Words2 Pages
For many companies, training will be best approached as a return on investment. The company needs to know that the great amount of money and resources invested in training and going to pay off. A return on investment (ROI) analysis will help the company to compute quantitatively the type of training options, the estimated cost of implementation, and the predicted returns in terms of increased productivity, reduced turnover, and other factors associated with the bottom line. As Phillips (2010) puts it, "Our greatest barrier"¦is that they are afraid that the results won't be there. This fear comes from the perception that if something doesn't add value, it reflects on them, the program, their department, and the function." The fears and opportunities associated with formal training apply as much to employee training as to managerial or executive training. The ROI Institute's Case Study entitled "Nations Hotel" shows how the ROI approach works. First, Nations Hotel created a division called Nations Hotel Learning Organization (NHLO), which was dedicated to the future of the organization via such things as training and development. Second, there must be a needs assessment. In this case, a brief survey of Nations Hotel executives by the NHLO revealed that executives sought "customized learning" as well as coaching (Phillips, 2007, p. 1). Thus, the NHLO responded immediately with a formal and structured coaching program designed specifically with senior executives in mind. The
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