Stress in Telecom Sector

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  • Topic: Costs, Cost, Investment
  • Pages : 11 (3171 words )
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  • Published : February 24, 2013
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Assessing the ROI of training
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by Clive Shepherd
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If people really are your greatest asset, isn't it time to look at your training programmes as investments in your organisation's human capital and not just as an expense? In this article, Clive Shepherd argues the case for return on investment (ROI) as a primary tool for forecasting and evaluating the benefits of training and explains the steps involved in conducting an ROI analysis. Contents:

• Measuring the success of training
• Forecasting and measuring costs
• Forecasting and measuring benefits
• Calculating return on investment
• Making ROI work for you
Measuring the success of training
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The evaluation of training, like motherhood and apple pie, is inherently a good thing. But, because short term priorities always crowd out their longer term competitors, it's typically something we plan to do better next year - after all, we've got away with it so far, so another year won't hurt! And even if training evaluation is undertaken, it is usually at the easiest and lowest level - the measurement of student reactions through happy sheets. Reactions are important and the happy sheets serve a purpose, but will they be enough to back up your arguments when there is a need for a greater investment in training, when major changes need to be made in direction, when there is stiffer competition for resources, when times get tough? Why evaluate training?

Let's summarise the main arguments for better evaluation of training: To validate training as a business tool
Training is one of many actions that an organisation can take to improve its performance and profitability. Only if training is properly evaluated can it be compared against these other methods and expect, therefore, to be selected either in preference to or in combination with other methods. To justify the costs incurred in training

We all know that when money is tight, training budgets are amongst the first to be sacrificed. Only by thorough, quantitative analysis can training departments make the case necessary to resist these cuts. To help improve the design of training

Training programmes should be continuously improved to provide better value and increased benefits for an organisation. Without formal evaluation, the basis for changes can only be subjective. To help in selecting training methods

These days there are many alternative approaches available to training departments, including a variety of classroom, on-job and self-study methods. Using comparative evaluation techniques, organisations can make rational decisions about the methods to employ. Criteria for measuring training success

The form of evaluation that we undertake is determined by the criteria that we choose, or are told to use, to measure success: Numbers
One way of measuring the success of training is the good old ‘bums on seats’. Although by no means a true measure of the effectiveness of training, student numbers do reflect the fact that the training is addressing a need and that the design and methodology is meeting expectations. Direct cost

Direct costs are those costs that are incurred directly as a result of a training programme – external design and development, consultancy fees, travel expenses and so on. If the programme did not take place, these costs would not be incurred. Many organisations only ever take direct costs into consideration when measuring training costs. Indirect cost

Indirect costs are costs that may or may not be directly associated with a training event, but which would have been incurred anyway, whether or not the training took place. Examples are salaries of in-house trainers and students and the costs of rooms and equipment. Any analysis of the true costs of training will include both direct and indirect costs. Efficiency

Efficiency is a measure of the amount of learning achieved relative to the amount of effort put in. In practical terms this means the...
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