How do you calculate the ROI to gauge the success of your training program?

Question

Accepted Answer

ROI can be calculated by dividing the net profit from the training program by the total cost of the program and multiplying by 100.

Calculate the net profit by subtracting the total cost of the program from the revenue generated as a result of the training.
Divide the net profit by the total cost of the program.
Multiply the result by 100 to get the ROI percentage.
For example, if the training program cost $10,000 and generated $20,000 in revenue, the net profit would be $10,000. The ROI would be (10,000 / 10,000) * 100 = 100%.

Accepted Answer

By tying training directly to a quantifiable factor, such as improved productivity or process improvement, you can come up with a dollar figure that reflects the value of the training to your company's bottom line. Choosing the right factors to measure, both before and after training, enables you to show how training has resulted in benefits to your employees and your company.

The standard formula for computing your ROI for training is ROI (percentage) = ((Monetary benefits – Training Costs)/Training Costs) x 100. ROI may also be measured in terms of decreased per-item product cost or time.

How do you calculate the ROI to gauge the success of your training program?

Popular interview questions of Management Trainee