Training Metrics: Calculating Training ROI

            

Details


Case Code : CLHR043
Period : -
Publication date : 2016
Subject : Human Resource Management
Organization : -
Industry :Diversified
Countries : India
Length : 2 Pages

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

The HR managers of ABC Incorporated needed to evaluate the cost of conducting a training program for its new joinees. The case provides basic facts and figures associated with conducting the training program and asks the participants whether the company should invest in training the new employees and if so, in how much time the firm can expect to recover the costs through the trainees’ output. The case will help students grasp the concept of HR Metrics and orient them toward understanding the process of Return on Investment (ROI) calculation of training.

Issues:

1) Understand the process of measuring HR processes.
2) Understand training cost evaluation.
3) Learn the calculations involved in ROI calculation, with special focus on Training ROI.
4) Understand, as future HR managers, how to make their decisions more objective with the help of data.


Introduction

It was time for drawing up the HR budget for the financial year 2016-17. Nina, Head (Human Resources) of ABC Incorporated, was pondering on the amount to be allocated for the Training & Development (T&D) activities. The top management was getting increasingly wary of shelling out funds when it came to T&D expenditure, but Nina had to immediately get a training program underway for the 50 new joinees approved by the management. ABC Incorporated, an MNC headquartered at Bengaluru, had hired 50 new management trainees in November 2015 from a few of the premier business schools in India. These recruits had joined the company in April 2016. Nina was given the responsibility of putting the new joinees through a proper induction program that would make it easier for them to get acquainted with their job profiles. Nina, who was leading a team of four HR executives, decided to conduct a 5-day-long training program for the new joinees to facilitate the orientation process. ...

Key words:
HR metrics, HR analytics, Training and development, Training metrics, ROI of Training, Training cost evaluation, Direct costs, Indirect costs, Cost benefit analysis, Payback period

Note
* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.