Put a dollar value on your training programs

A training budget should factor in the following costs:. Upon approval, your training budget needs to be carefully managed if you want to stay on track. This responsibility lies with the HR department. Naturally, every now and then there will be extra costs due to unforeseen events, such as employees quitting or temporarily leaving the company maternity leave, sick days, vacations, etc.

Bear in mind that training costs increase if you need to rely on external resources. As your company and staff grows, your training cost per employee will increase as well. Keep in mind that the most important item in effective cost management is understanding the cost-revenue structure of your business. When you take a strategic view of your training program, you can accurately determine what your company needs and how to go about delivery in the most cost-efficient way possible.

This will allow you to achieve the desired results without going over the budget. Once you have prioritized the training needs of your employees and drafted an initial training budget, you can look at ways to maximize its cost-efficiency. Once you look at the cumulative expenses of training cost per employee, you can consider several ways of reducing them:.

These include:. You can use these techniques individually or try a combination based on your business needs. Ultimately, having the right training program in place will save you money in the long run.

Ultimately, efficient training cost management comes down to employee commitment. If you want to be successful you need to factor in this component. This means setting specific goals for employees that you expect them to achieve. This includes setting specific training goals for each employee and letting them know they are monitored.

If you are paying for outside classes to improve their knowledge on a specific subject, get employees to commit to working for you for a specified period of time after completing the training. Ultimately, you want to have the full support for training efforts from your senior staff and HR employees. If they understand the long-term value of employee development and training budget allocation, they will be able to assist you in every way possible.

We also use this access to retrieve the following information:. At some point in time, most companies are going to have the need to develop in-house training. In design career, you may have encountered a number of different types of training. But regardless of the subject matter, the bottom line revolves around money either to increase revenue or decrease costs.

And, with that in mind, it is a very safe bet to assume that the stakeholders and sponsors the ones flipping the bill for the training are interested in that one thing too; money. They are probably very interested to know how well the training you developed will ultimately bring the business in more money or reduce costs through evaluation, right? All in all, stakeholders and sponsors typically want to see evidence that the training you are developing for the firm has worked through some type of measurable proof.

So how do you do this, you ask? Well, believe it or not, there is a fairly easy method and it revolves around 4 levels of the Kirkpatrick Model. This is the first level and is the most basic in reviewing how well your training went. Surveys smiley sheets after class are an example of this. Here are some more examples of Reaction Level remember, this is the basic level of determining how well your training did.

A step up in terms of evaluation from level 1, this level measures the attitudes, knowledge and skills developed as a result of the training. Post-tests, simulations, or hands-on assignments fall into this category. Learners attending a class on implementing effective meetings might create a simple meeting agenda as part of this second level. Here are some more examples:.

At this level, evaluation peers into whether learners apply the training back on the job. Examples include:. This fourth level evaluation determines whether the training program goals were met and what business results have been achieved.

Additional examples might be to analyze:. This baseline measure has an advantage because even organizations that do not produce a profit can calculate it. On occasion, company executives or the CFO will accept external data as representative of the performance multiplier of a top performer over the average employee at your firm. If that is true in your situation, the following historical data points of multipliers may be useful.

Your next step is to determine the percentage or multiplier above the previously determined average output that a top performer produces. The performance differential definitely varies based on the job being analyzed. Start with product design jobs. Work with design executives to identify the creative ideas, product feature ideas, and product ideas that were originated by each design employee during the past two years.

Next, use a small team of executives to estimate the dollar value and business impact of each idea. Once the best-to-worst list is completed, simply calculate the percentage difference between the value produced by the average employee on the list and the value produced by the top-performing design employee on the list.

Next, conduct the same differential analysis on other creative or design jobs like web designers and programmers. Follow that up with an analysis of jobs that require a high level of adaptiveness and problem solving, like managers, traders, and those who work in highly competitive environment. The multiplier percentage may range between a low of 33 percent and a high of 1, times. Obviously when you find a high multiplier in a job family, that means that you should prioritize and direct the best HR resources towards hiring and retention in those jobs.

If you find a zero or low performance differential between top and bottom performers you must conclude that either you have an effective top grading hiring process or you have a serious labor issue that is unnaturally restricting employee performance. This may seem like an outrageous economic impact, but if the employee invented the iPod, the iTunes site, or the Siri feature on the iPhone, it may actually be an underestimate.