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What's the ROI on Leadership Training?

If you’re an HR Manager responsible for the training budget, there’s a good chance that you’ve been giving some thought to planning for 2017, and how much you can allot to which types of training.

The thing with training budgets is that there is no way to ensure that everyone gets a fair share. Even when you think you’ve got it right, you can bet that around May or June next year, someone is going to be unhappy because they want to attend an event that will help them to develop professionally and what’s more, it’s absolutely critical to their current position – and the entire training budget is already allocated.

That’s unfortunate, but it’s impossible to see into the future and to accurately guess who is going to need what.

As an HR Manager you’ll probably be bound by parameters such as the seniority of staff, length of training courses set against length of absence from the office, as well as the results of your training needs evaluation that you did a few months ago.

How are you going to judge whether what you've planned brings value to your company – because you know that as an HR Manager, you are frequently the first person to be blamed if staffing issues arise.

Specifically I’m thinking about the vast amount of money that companies spend on sending their senior staff for leadership courses or executive coaching.

Last week I went to a fabulous networking event in Linz in Austria, brilliantly organized by the Austrian Chamber of Commerce and ‘Sales Teams & More’, and had the opportunity to meet some other business owners who are passionate about what they do.

One of them works for a recruitment agency, and we got onto the subject of staff engagement and how dreadful it is. She agreed with me that businesses pay huge fees to consultants and trainers to provide their managers and directors with leadership development programmes.

But frequently, little or no change can be seen in their leadership approach, and no improvement to the work of their team is evident.

How Much Money Are You Wasting?

If you spend 1000s of £££s or $$$s or €€€s on training courses, and the beneficiaries fail to apply their learning in the work place, regardless of how good the programme was, that learning was worthless.

Yet very few businesses look at their potential return on investment (ROI) for professional development, and therefore fail to agree on key performance indicators that would justify investing in their staff.

You must have a system in place that is going to allow you to evaluate how effective/useful/beneficial training has been whereby the results for soft skills are much harder to gauge than technical skills.

For example, if your company is implementing a new ‘Customer Relationship Management’ system, your staff is going to need to know how to enter relevant data, and you may therefore send your colleagues on a one day workshop to learn the basics.

If you have employed the right people for the job, you are going to expect that your colleagues return to work, ready to use their new skills to the benefit of the business. You’ll be able to assess almost immediately whether the training programme was a worthwhile investment.

But what if you have a section head or a director who comes to you saying ‘I want to go on this fantastic executive leadership course because I’m a manager and I need to learn about new management tools’?

Follow these suggestions and you’ll find yourself in a much stronger position to say yes, or no, the next time your training budget is called into question.

Define SMART goals and answer these five questions:

1. How do YOU believe that the business will benefit? Is it a viable request? Is it in line with company policy?

2. Why does your colleague want to attend the training? What do they hope to achieve? Ask them to justify their request. Don’t rely purely upon the outcomes that the training company or consultant give you.

3. How are you going to measure the results of your colleague’s new learning?

4. If the workshop/training is focused on leadership or coaching skills, do you anticipate an improvement in staff engagement or productivity, and within which time frame?

5. What action will be taken if your colleague fails to meet these pre-agreed outcomes? Does your company have a mechanism that allows the business to reclaim training expenses from its staff?

If you want others to be accountable for spending your training budget, begin by being accountable for yourself and the decisions you take about how you allocate the funds. Your decisions will never be accepted by everyone, but then effectively managing human beings isn’t about being popular …

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