FEATURE TRAINING
How to measure the ROI of training
To overcome the negative consequences of the much-debated skills gap, manufacturers are investing heavily in training programmes to upskill their existing workforce. Everyone realises that training is a valuable resource, but how valuable exactly? In this article, Neil Ballinger, head of EMEA at automation parts supplier EU Automation, explains how to calculate the return on investment (ROI) of training for a manufacturing workforce.
A
famous motto states that if you think hiring a professional to do
the job is expensive, you should just wait and see the cost of hiring an amateur. Nowhere is this truer than in manufacturing — repeated human error can be expensive, it can damage equipment, compromise a business’ reputation and credibility, and ultimately be a threat to employees’ safety. To prevent this, manufacturers need to properly train their employees to do their job safely and effectively. Proper training is also paramount
to accelerate manufacturers’ journeys to Industry 4.0 — even the latest automation technology will not help maximise productivity unless it is used correctly. The point is not whether or not
manufacturers should upskill their workforce, but what training programme will add the most value to the company. So, how do you calculate that?
ASSES THE COSTS The first step is to be aware of how much a training programme will actually cost. Most manufacturers will carefully consider the direct costs of hiring experts and paying for trainees’ transport and accommodation, but there are other factors to take into account. The cost of promotional material –
such as brochures – and of manuals, software, or other educational tools also add up. Moreover, while employees are taking the training or teaching colleagues, they do not actively contribute to the overall production.
32 SPRING 2021 | INDUSTRIAL COMPLIANCE / INDUSTRIALCOMPLIANCE You should know approximately how
much work an employee can do in an hour, and the value of that work. Now multiply that for the whole duration of the programme and add the result to the other costs — the temporary loss of productivity is often the most expensive aspect of training.
FORECAST BENEFITS, VERIFY RESULTS The next step is to forecast the benefits of training. These can be savings realised by reducing the amount of time required by each
THE VALUE OF KNOWLEDGE
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