You know investing in training is valuable, but how can you demonstrate that return on investment (ROI) to your management? Whether you are the team lead or the employee who took the training, the methods and examples in this article will help you demonstrate the value gained from the training.

Investing in your people through training brings both tangible and intangible benefits. Let's discuss both and then explore examples that you may easily adapt for your situations.

Intangible benefits include:

  • Motivated employees - Team members looking to apply new skills, assist others, and share ideas with the team
  • Expanded skillsets - Being able to step up and assume additional responsibilities
  • Improved confidence - Willingness to take on new challenges and share their input
  • Better communications - Improved communication between team members, between teams, and with clients

These intangible benefits generally lead to tangible benefits, which can best be expressed as cost avoidance or actual savings. Folks feel those figures are hard to determine and fear being called to defend. Let's look at how to present these tangible benefits in a manner that defends itself.

Best Practice: Present cost avoidance or savings from an annualized perspective.

Let's explore some examples. Keep in mind that you will likely need to make some assumptions, so always document them. For the assumptions and details supporting these examples, please see the worksheet section below.

Examples of Monetizing Improvements 

Process Automation - After completing the database course, a team member developed a refresh tool for the test database in just 10 hours. This tool now saves our team 3 hours per database refresh and allows testers to initiate automated refreshes whenever they need. Averaging two refreshes per release and 24 releases annually, we’re seeing a first-year cost avoidance of $8,868. It also significantly improved the morale of our team, and the testers love having control.

Application Performance Improvement: During Web API training, I found a way to optimize a key API process and implemented it as part of our most recent regular release cycle. This process impacts 50 end-users who each call the API about 100 times daily. The improved API now runs 2 seconds faster, saving approximately 167 minutes per day. Annually, this efficiency gain equates to $47,794 in end-user productivity savings.

Form Automation: Using WPF training and direct collaboration with users, we automated sections of our customer data entry form. This improved data accuracy and reduced processing time by 18% (2.5 minutes per customer). With 375 service center form completions per week, the annualized savings equate to $53,768.

Some of the examples may seem like small amounts, but they demonstrate an attitude of constant improvement and justify the investment in training. 

Additional benefits to consider may include enabling the promotion of a team member to a senior position rather than hiring new people. Also, using cost avoidance/savings metrics to justify pay increases. 

Cost Avoidance/Savings Worksheet

Working assumptions:

  • Average Developer's Salary - $75,000 (This will vary based on the developer's role/location/industry. Junior developers' costs may be lower, Senior developers' may be higher.)
  • Average Client's Salary - $65,000 (This will vary based on the application user's role/location/industry. Call center employees' costs may be lower, while a loan appraiser's may be higher.)
  • Loaded cost of an employee - $135,000 (~180% of salary) *
  • Hourly loaded rate = $66 an hour ($135,000 / 2040 hrs) 
(*) Check with your HR or management for your organization's loaded cost. If no one seems to know, do some research and propose a reasonable number. Better to be conservative. In our examples, we used a base salary of $75K

Calculations:

Example 1 - Process Automation
Time spent building the tool 10 hrs
Time saved refreshing test data per release (2 x 3 hrs)    6 hrs
24 releases a year (6 hrs x 24) 144 hrs
Time saved in the first year (144 - 10 hrs to build) 134 hrs
First year impact (134 x $66) $8,868
Example 2 - App Performance Improvement
50 employees, 100 times a day ** 5,000 iterations
Improvement of 2 seconds 10,000 seconds
Convert to minutes (10k/60 ) 167 min per day
Annualize (260 workdays x 167) 43,333 minutes
Convert to hours (43,420 / 60) 722
Monetize ($66 x 723 hrs)  $47,794
Example 3 - Form Automation  
2.5 min x 375 customers a week 937.5 min/wk
Annualize (937.5 * 52 wks) 48,750 min
Hours per year (48,750 / 60) 812.5 hrs
Monetize (812.5 x $66) $53,768
(**) - Don't be afraid to talk to your end-users to gather this type of information. You could also search the application logs or enhance the logs to capture statistics.

Additional Best Practices:

  • Round to whole units (dollars in these examples) for ease of reading
  • As a manager, training your team to present their accomplishments in clear, measurable terms can make a performance review easier. It also streamlines the process of incorporating their achievements into your quarterly and annual reports for leadership.
  • Partnering with clients to assess the impact of changes can reveal unexpected benefits. Sharing the benefit analysis not only highlights the value of the work but also fosters a collaborative environment where everyone shares in the success.
  • Factoring in Paid Time Off (PTO) can make calculations far more complex and confusing, while generally having a minimal impact. If pressed, consider doing a 5%-8% PTO reduction in the overall number.
  • You don't have to wait for a HUGE improvement. Documenting several smaller success stories in every review shows a commitment to innovation and an eye for detail.

Share your success stories!

We LOVE to hear your success stories! Please share it with us at help@iamtimcorey.com. Please filter out any of the company's proprietary information. We don't want you sharing any secrets.

Need help?

Still struggling to determine the value you gained from the training, maybe we can help. Write up all the data and information about what you or your team did to your systems/applications. Protect your proprietary information! We don't want to see any company secrets.

When looking for the value, it may not be one specific nugget of knowledge that you gained from a course. Maybe it was the boost in confidence that pushed you to take the risk. Share it with us at help@iamtimcorey.com. Maybe we can help you find a way to quantify the value.