How to measure your Return on Investment for training

Sept. 1, 2016
This article will tackle the cost of creating a training plan, where to find quality content, and how to measure your return on investment and effort.

Hopefully this thread is peaking your interest and inspiring you to make a concerted commitment toward establishing a training plan for your team. If this is your first visit to this department, I encourage you to review the first two installments as a precursor to a deep dive around this latest installment – the cost of creating a training plan, where to find quality content, and how to measure your return on investment and effort. Return on investment (ROI) is an interesting discussion when it comes to training, no matter the industry.

In a past life, I worked for a major tool company where I helped form a technical training program. We had a tag phrase about training ROI: ‘Training Doesn’t Cost, It Pays!’ We had buttons made and other collateral material to promote the fact that there is, in fact, a positive return on investing in training people. But we really didn’t have metrics that could support this statement, and in reality, it is difficult for a training organization to measure ROI. It’s also difficult to measure a return in the conventional sense of how much was spent versus how much additional revenue was generated. Our industry offers such a variety of services and lacks measurable data from point-of-sale systems, making an ROI calculation on training is difficult. So this month, let’s look at ways we can measure training’s ROI and discuss how you can implement them into your business today.

Having spent the last 25-plus years training technicians and shop owners, I can tell you that there are two desired, measurable points that are incredibly difficult to pin down. The first is measuring the student technicians’ abilities to apply what they learned during a training event or class. And the second, did the investment in training my team positively impact the shop’s bottom line?

Let’s look at the variables in each ROI scenario. The desired result for a shop owner committed to training their team is ultimately a team member who grows their skills and abilities, which should result in a positive return on investment. Makes sense, right? If I send Joe to an air-conditioning update class in the spring, I should expect Joe to be more productive when servicing AC issues. Sounds reasonable, and in many cases is what’s assumed by most shop owners. However, this example is wrought with assumptions that prevent any chance of accurately measuring ROI, let alone seeing a measurable or even a perceptible improvement in Joe’s skill set. Unfortunately, this scenario is typical of how shop owners choose to train their team.

Using the AC update class as an example, it’s usually held prior to AC season, and most likely delivered by a parts supplier in an effort to sell him AC products that year. It is somewhat a rite of spring to send techs to these “training” events as a way to grow their skills and impact the bottom line. However, there are problems with this strategy. Sending your team to an annual update class is not a well-planned, thought-out learning plan. It is simply throwing training at a perceived problem. All training should be assigned for the purpose of improving a skill that has been measured, and deemed inadequate. Sending your team to training that they see no value in because they weren’t involved in the decision or because they already understand the topic or skill only creates animosity in your team. They will come back and say it was a “waste of time” or “I could have taught the class” because the content didn’t match their skills gap.

In the previous installment, “The Learning Manager,” we shared how important it is to include your team in creating this plan and getting their buy-in and commitment. If they are a part of the equation and you actually listen to their input, they are more likely to participate in the training in a way that creates a positive ROI.

So, let’s assume you have gained your team’s commitment and identified the learning manager for your company, who in turn has created all the job roles and identified the team’s knowledge gaps. Further, assume you have engaged everyone on the team in designing the program and chosen the content provider, resulting in a well-thought-out plan that everyone is on board with. As spring arrives, you are approached by your parts supplier with an AC update class opportunity, to which your learning manager responds by identifying team members who can actually benefit from the class, or by saying, “Thanks, but we included that topic in our current learning plan.” Only then will you see a positive impact on your bottom line. Anything else is wasting money by providing untargeted training and not including your team in the plan to leverage those funds effectively. Do you see the difference? To summarize, having a well-thought-out learning plan prevents you from just wasting training on a perceived problem, and instead results in a team that is more likely to engage in the training prescribed, which will deliver a better ROI.

Now let’s look at the first measurable we described: how to know if a team member is able to apply the knowledge learned in the classroom or through the online course? There are a couple of traditional methods used today that are limited in their accuracy. One is the typical, multi-question, written assessment test that uses multiple-choice questions to try to measure the student’s knowledge base. These are similar to ASE tests, with some questions focused on trying to measure the student’s overall knowledge base with, for example, 100 questions. Considering there are more than a few systems on a modern vehicle, it is nearly impossible to accurately measure a student’s knowledge base by asking only a handful of questions. The other traditional method is probably what most do today – nothing. You send a tech to class and hope they come back and apply what they’ve learned. This assumption will typically not work out well. You might send a tech who really needs AC training to a good AC class with the goal of helping them reduce their return rate on AC services. If, in fact, the tech did not choose to apply any of what they learned in class, it may take months for you realize this as the vehicles they serviced start returning for re-repairs.

There is one other legacy method of knowledge transfer confirmation. It consists of having a mentor who is knowledgeable about the system in question observe the tech who attended class to determine if they can apply the new skill effectively. This, in my humble opinion, is an option that we need to revisit, and as a training provider, something I am working on implementing to assist my customers. However, the issue of scalability needs to be addressed first. Today, there are some new technologies that allow the learning manager to challenge the learner by giving them a problem to solve using virtual simulation technologies. These technologies replicate a broken vehicle, provide virtual tools, systems and components, and create a realistic opportunity for a learner to apply new skills in a way that mirrors what they do every day, without requiring someone to challenge them or a vehicle to bug. These new simulations are available from Carquest Technical Institute and several others as well.

So, this installment probably didn’t go down the path you expected. Instead of trying to create a traditional financial ROI, we focused on how to get the most out of your training dollars. I think most shop owners will agree that they need to invest in their people. The key is not to worry about the percent of return on your investment, because that is almost impossible to measure. Rather the key is to plan and execute the plan as a team. A best practice after every training class is to meet as a team the next day to discuss what was learned and how best to implement this new knowledge into the business. That new knowledge could apply to everyone, or it could be that one of your team members learned the proper way to diagnose AC leaks, which will prevent comebacks. As a team you should evaluate this new knowledge no matter the skill learned.

Finally, I’m sure many are wondering where to find good training. I’m biased and would say come see me, but in reality the best resources for this are your competitors and suppliers. Ask who has training that fits your needs. Visit with the trainer and/or training manager and ask questions. Ask to sit in on a class to see if the trainer and curriculum are a good fit for your team. Lastly, seek a provider who delivers an ongoing program that allows you to commit for the long run, instead of one class at a time. At the end of the day, these actions will serve you and your team well.

Please send comments directly to me at [email protected].

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