ROI on training

The ROI of training can be determined (if it indeed has one). There
is a chain of evidence to be followed that goes beyond the acquisition
of knowledge (although that makes a good starting point).

Presumably, the training results in the acquisition of knowledge and
skill. Let's treat them separately for now.

The acquisition of a new skill means the trainees are able to do
something they could not do before. Typically, skills are taught or
developed when what the trainees are to do is known and specified in
advance.

Knowledge has value with respect to performance only when it is
applied in some way. Knowledge provides the capability or capacity
for action. However, the precise nature of the application can't be
specified in advance and so it is often the case that the performer
must, at least in part, figure out what to do.

Both cases (skill and knowledge) tie eventually to the performer doing
something in an on-the-job setting. That something, whatever it is,
has direct and immediate effects. These effects might be felt in the
form of changed information, transformed materials, or changes in
other people. The direct and immediate effects of action also "ripple
through" the structure of the larger situation or context in which the
performance takes place, making themselves felt elsewhere. For
example, a direct, immediate effect of a salesperson's proposal to a
customer might be an order. That order is then booked and later shows
up as an incremental increase in the organization's sales. It might
also be used in some functional calculation such as
orders-per-salesperson, etc. In any case, there are indirect and
delayed effects of actions to be considered.

The chain of evidence of the ROI of training that I referred to
earlier goes something like this:

Training --> Improved/Increased Skill/Knowledge --> New and Different
Actions --> Direct and Immediate Effects of Actions --> Indirect and
Delayed Effects of Actions.

The effects of actions, whether direct and immediate or indirect and
delayed, are typically such that economic value can be assigned to
them. This is what makes it possible to ascertain the ROI of
training. The typical focal point for evaluating training (i.e., the
acquisition of skill and/or knowledge) is only a starting point in the
chain of evidence.