Would you sell short an investment with a 500% return?
Return on Investment (ROI) has been a point of discussion and study in recent years. Research by the International Personnel Management Association (IPMA) concluded that training increases productivity by at least 22%, while training combined with coaching increases productivity by at least 88%. Fortune magazine quotes a study which says managers report a return of about six times what the coaching cost their companies. Hence, the 500% return.
As you start to develop your budget for 2012, you should consider the pros/cons of cutting training before you allow development goals to be stalled. The pros may be a short-term savings, but the cons will quickly outweigh them as you consider that stalling the development of people is pretty risky. Rather than eliminating training budgets, consider choices with training dollars that will drive the best ROI in your best people.
Slow Times: Good Training Times. Although it may be hard to believe, a slow time in business can be a great time for training. When people aren’t overwhelmed, they are more likely to take the training seriously and invest the time to implement it.
Invest in the Best. If you need to be selective with training dollars, invest to hold onto your best. Lack of coaching and mentoring is the number one reason super stars leave companies.
Explore New Formats & Options. If you can’t execute an extensive training program for everyone, consider short programs that can raise awareness and introduce skills. While this won’t yield the same benefits as more intensive training, it can provide new ideas and stimulation that can push a group to explore new choices.
While the ROI numbers on coaching are impressive, the words of our clients send the strongest message about investing in people. A recent workshop attendee wrote the following:
“This has been the greatest gift the company has ever given me. No matter what I do within this company, I know that I will use these skills. And, I am grateful that the company has invested in me.”
While 2012 may be a difficult year for some investments, it’s an excellent year for investing in people.
