TrainingCheck Help Centre

 

Calculating Return on Training Investment (ROTI)

[Note:  You can download this guidance as a PDF by logging in to your account and clicking the Training Evaluation Guidance tab at the top of any screen.]

Overview

Return on Investment (ROI) is the relation between financial benefits gained from something (in this case a training programme) and the total cost of that thing. The purpose of an ROI analysis is generally to see whether the benefits outweigh the costs, ie to see whether the investment was worth it.

Please note that ROI of training can only be calculated reliably using TrainingCheck provided that:

  • reliable data on changes to relevant business performance measures is available (or can be reasonably estimated by key stakeholders)
  • changes to the selected performance measures can be assigned a financial value
  • the costs associated with developing, delivering and managing the training can be identified.

If these criteria can be met, then by following the steps below you will be able to use TrainingCheck to create a Return on Training Investment (ROTI) report using the ROTI Calculator function.

Once you have entered relevant financial data, the Calculator will automatically calculate the ROTI % as follows:

((£ Benefits - £ Costs) / (£ Costs)) X 100 =  ROTI%

The Benefit to Cost ratio will also be calculated as follows: 

£ Benefits : £ Costs

The ‘Payback Period’ (ie the time taken to pay back the investment) will also be calculated.

Notes on ROTI Results:

It is advisable to get early agreement from training programme sponsors as to what the target level of ROTI should be. As a general guideline, ROTI levels below about 20% are usually considered to be low. In practice, however, it is quite common for ROTI percentage figures to be very high, eg 500% or more.

While high ROTI figures can impress senior managers they may also raise doubts. This is just one reason why it is important to combine ROTI calculations with other levels of evaluation. Evidencing a consistent link between the training and improvements in job and business performance will add significant credibility to ROTI figures.

Click on the links below for more information on how to calculate ROTI using TrainingCheck:

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