Defined as (Value-Cost)/Cost (Waddington, Aaron, & Sheldrick, 2005). For example, an ROI of 22% tells you that for every dollar spent, you get $1.22 back.
Published in Chapter:
Return on Investment in Training
Tad Waddington (Accenture, USA)
Copyright: © 2009
|Pages: 6
DOI: 10.4018/978-1-60566-198-8.ch264
Abstract
In 1992, the economist, Gary Becker, won the Nobel prize for his work that demonstrated the importance to organizations of human capital and of training, in particular. Despite the importance of human capital to the long-term health and growth of organizations, they continue to under-invest in training (Becker, 1993). In The Human Equation, Jeffrey Pfeffer (1998) explained why, “Training is an investment in the organization’s staff, and in the current business milieu, it virtually begs for some sort of return-on investment calculations” (p.89). In other words, because organizations do not adequately measure the value that training adds, they fail to reap the benefits of fully investing in training. This article shows you how to measure your return on investment in training.