Element Number One – Training Costs
When to Measure Cost Effectiveness
Organizations have traditionally supported
training because it shows their concern for
employees, and higher management “assumes”
that the benefits exceed the costs. In any event,
when higher management “believes” that training
is operationally critical to the organization’s
competitive position, there may be little or no
demand for cost-effective information.
Therefore, despite the increasing
admonishment found in training literature about
the importance of demonstrating that training is a
worthwhile investment, many training managers
routinely avoid the use of economic justification.
However, when a belief in the value, worth, and
merit of training is not part of an underlying
business philosophy, reporting the cost
effectiveness of training can help the training
manager establish credibility and may enhance
the organization’s willingness to invest additional
resources.
The single greatest incentive for indicating the
cost effectiveness of training is its use in
justifying training expenditures with documented
benefits. Uncertainty about continued support for
the training function leads to the consideration of
cost-effective information as a defensive measure
– a way of showing higher management that
training is not a luxury. Consequently, a growing
number of training managers have a desire to
show a return on training investments similar to
that on other business investments