When should ROTI be calculated?

As a rule, calculating the ROTI from a training programme should only be carried out when the following conditions apply (ie if not all these conditions apply, then you should seriously consider whether spending time, effort and resources on conducting an ROTI analysis would be worthwhile):

• the training programme requires a significant financial investment
• the training objectives are clearly defined and their achievement is likely to impact on areas of strategic or operational importance
• there are enough learners to make an impact on business performance and draw financial conclusions
• learners have good opportunities to apply their learning to the workplace
• data on relevant changes to performance is available
• changes in performance can be attributed credible financial values by key stakeholders (see Note 1 below)
• training factors can be isolated from non-training factors and the financial benefits apportioned accordingly (see Note 2 below)
• direct and indirect costs of training can be identified
• an ROTI analysis is likely to be meaningful/important to the programme's sponsors.

Note 1: Changes to some performance measures, such as those related to employee relations or contribution of ideas, may be more difficult to quantify in monetary terms than others, and attempts to do so may be treated with some scepticism. You will need to be especially certain of the basis for assigning financial values in these cases. Similarly, some relatively easily monetised outcomes, such as benefits achieved due to time savings, need to be treated with caution as they may not tell the whole story (for time savings to translate into real financial benefits the time saved must have been used productively).

Note 2: When collecting business performance data from respondents, they should where possible estimate the relative influence of the programme as compared to other organisational and external factors, such as new working practices, performance incentives, new competitors, legislation or environmental factors. The proportion of influence ascribed to the training programme can then be applied to the data.

For example, if gains in staff retention have resulted in a financial benefit to the organisation of £5,000, and it is estimated that the training is responsible for 50% of the change in retention (the other 50% being attributed to other factors), then the total financial benefit attributable to the training is calculated as £2,500 (ie £5000 x 50%). It is this figure that is then used as part of a Return on Training Investment calculation.

Respondents should be encouraged to remain on the conservative side when providing financial estimates.as if they are unreasonably high this may damage the credibility of the final ROTI figures.

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When should ROTI be calculated? How do I collect ROTI data and create the ROTI report? Why calculate ROTI? When should ROTI be calculated? Over what time period should ROTI be calculated? What is the ‘Payback Period’?