Training and development

Company training programs: What are they really worth?

May 27, 2011: 11:09 AM ET

Many companies analyze the return on investment for advertising campaigns and other company initiatives, but not training. Why not?

By Gary M. Stern, contributor

FORTUNE -- Whether it's harvesting pearls of management wisdom from the works of William Shakespeare, workshops on building better teams, or an in-depth exploration of the latest application development software, training business is big business at American corporations. But do any companies actually track what comes out of these programs? And, if so, how?

American businesses spent a staggering $125.9 billion on employee learning and development in 2009, according to the American Society of Training & Development's 2010 industry report. While companies track every data point of an advertising campaign, they often ignore the return on investment on their training dollars. Are companies getting any bang for their training buck?

While many companies collect data on the number of employees they train and the cost of training per person, most do not establish metrics that connect training sessions to the ultimate goals: improved sales, generating new customers and increased productivity.

Staff training programs largely fall into two broad categories:  product, sales, and technical training, which teach specific skills; and more "intangible" workshops on leadership, team effectiveness and diversity, says Homa Bahrami, a lecturer in management at The University of California-Berkeley's Haas School of Business. More

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