THE 20 R’s OF HRD ROI IN THE RSA:
FROM REACTION TO RAND VALUE RESULTS

By Marius Meyer

 

ROI is all about the process of measuring the financial return on investment of a particular intervention in the workplace.  Business managers use it as a forecasting tool before they embark on new projects, open a new branch or launch an advertising campaign. Similarly, HRD can use it to determine the potential and actual value of training.  ROI is presented as a financial figure, usually as a ROI percentage (e.g. 22%), or as a cost benefit ratio (e.g. 1:3).  It helps us to answer the question: For every rand invested in training, how much money does the company get back for that investment?  Or to put it more provocatively; if you can’t achieve a positive ROI:  How much money did you waste on training? 

Having worked with a number of companies in the field of ROI measurement in training programmes over the last five years in South Africa, I have done some reflection on the processes, pitfalls and practices involved in ROI measurement.  I present them to you as practical guidelines, called the 20 R’s of ROI. See how many of these are relevant or visible at your organisation. 

  1. Readiness for ROI should be established first – you need a measurement culture that focuses on business performance improvement
  2. Reinvent yourself – from “training person” to “business partner”
  3. Remember who your customers are – not only the SETA, but the CEO and clients of your company!
  4. Relationships are critical – build and improve on your relationships with managers, learners and all other stakeholders
  5. Read more about ROI to improve your understanding of the application thereof
  6. Reprioritise your key performance areas by focusing more on measurement (you should spend between 20 and 30% of your time on measurement only!)
  7. Right questions should be asked – pose them to get the right answers
  8. Re-align ROI with other systems and processes such as quality management, business process re-engineering, just-in-time, Investors in People, balanced scorecard
  9. Results focus – focus more on outputs (not outcomes) than on inputs
  10. Responsibility for ROI – assign a good HRD project manager
  11. Roll-out needs strategy – an integrated evaluation and measurement strategy is needed
  12. Revitalise your training department – create a bottom-line focus
  13. Rework your balanced scorecard – make the tangible measures more visible
  14. Rethink your current training programmes – do you really need all of them?
  15. Retrain HRD practitioners if necessary – they need to know how to add value
  16. Refocus on responsibility and accountability of training – that is your real reason for existence as an HRD professional
  17. Review ROI results for accuracy and isolate non-training variables
  18. Report ROI results to management – use business language and terminology they like; no HR, SAQA or SETA jargon!
  19. Reward HRD for ROI results – ROI is real business performance achievement and should be rewarded
  20. Reflect on your ROI learning – use these learning points and other lessons from your reflection for continuous improvement to achieve even greater ROI results.

The 20 R’s of ROI are opportunities to transform your training function to a dynamic bottom-line driven training department. The challenge is to tackle these key principles and practices and make it part of the learning culture of your organisation. Calculating and reporting on the ROI of your training is the ultimate benchmark of HRD competence. It means much more than current statistics of the thousands of people you have trained, hundreds of training manuals and all your training venues, training officers and registered assessors.  More than the figures itself, ROI provides evidence that you are a real business partner.

 

Marius Meyer consults in ROI measurement for ROI ONLINE (www.roionline.co.za)
and can be reached on info@roionline.co.za