Corporate Training – Smart Investment, or Waste of Money?

Learning & Development

When business is bad and economic times are tough, training budgets are always the first to be cut.

Are these bad decisions? Or do the decision makers know something about the ROI of training that the rest of us (especially those involved in the L&D Function) are not willing to face?

Return on Investment

Here are several recent trends that I have witnessed that seem to be in direct response to the disappointing ROI of training.:

  • Cost reduction: One global IT company recently held a worldwide “negotiauction” (Basically an internet enabled, time limited, auction, similar to Ebay, but in reverse) to get all of their training vendors to compete directly against each other in order to lower the price per candidate/training hour as much as humanly possible. This makes some sense – if the ROI on training is not good, then lowering the investment should improve the ratio, right?
  • eLearning: Many global corporations are purchasing lower cost, eLearning solutions, which means that they can lower the cost per candidate/training hour by eliminating such things as classrooms and travelling costs. This also makes sense for the same reason as above – if the ROI on formal training is poor, then lowering the investment is a logical way to improve the ratio.
  • Time reduction: Many of our clients have asked us to compress two days of training into one-day formats, thus cutting instruction costs in half. This also makes financial sense – if the ROI on training is bad, then naturally, lowering the investment is a very logical way to improve the ratio.key

But I wonder if these logical, mathematical solutions are possibly missing the point? Isn’t it also possible to change the ratio by increasing the RETURN side of the ROI?

Does Training Work?

Sam Adkins upset some people with his Learning Circuits blog (American Society of Training and Development) from November of 2003 when he wrote:

  • “Training does not work.
  • eLearning does not work.
  • Blended learning does not work.
  • Knowledge management does not work.”

Surprisingly many learning and development professionals agreed with him. Of course he backed these statements up with data. And here are some of the data:

  • “…less than 20% of training transferred to the job.” (Brinkerhoff and Gill, 1994, p.22)
  • “Most of the investment in organizational training and development is wasted because most of the knowledge and skills gained in training (well over 80%) is not fully applied by employees on the job.” (Broad and Newstrom, 1992)

Jay Cross, in his book Informal Learning (2007, Wiley and Sons), states that “Only 10 to 20% of training transfers to the job.”

So how can we protect our L&D investments and make sure that learning is transferred back on the job?

My experience as a learner

When I was fresh out of university, I went to work for a global telecom company as a salesman. We were put through many training programs during the first few months, but the one I remember best was the sales training program – I was highly motivated because part of our compensation came in the form of sales commissions (and I like money). We spent two days doing simulated sales calls with a trainer acting as a customer and a huge video camera (this was1986) recording every embarrassing thing we said and did. Scary, but pretty effective.


I remember rigorously applying the sales methodology in the first week after the training. Somewhat less rigorously applying it in the second week. And haphazardly applying it in week three. By week four, I was pretty much back to my usual habits. Now and then, though, I found my memory triggered by sales meetings that followed the same pattern as the simulation (this was a rare case) and I used the techniques in those cases.

What was causing this reversal of the learning? Actually many things[1]. One would be simply forgetting. The reality is that on average, over a period of a couple of weeks, the human brain forgets about 80% of what has been learned (Memory: A Contribution to Experimental Psychology – Ebbinghaus,1885/1913). See the data in the graph below – pretty much self explanatory.


Figure 1 – Ebbinghaus Forgetting Curve

Ebbinghaus Forgetting Curve

The Learning Curve

Ebbinghaus himself proposed a workaround for the forgetting curve – spaced repetition. Below is an example of the forgetting curve with spaced repetition superimposed. It shows that the more times we review something, the better it sticks in our memory.

So my question would be – Why do we still conduct one or two day workshops with groups of employees and expect this single event to produce performance improvement or behavioral change?

Learning Curve

My Experience as a Trainer

The other day I played devil’s advocate with one of our trainers. We were just packing up after a workshop and I said to him; “You know training does not work, right?” He replied very quickly; “Of course it does, especially this training, because we can see the improvement by the end of day two.” I asked; “Have you ever seen trainees using the skills back on the job, six months later?” – “Of course not, I don’t work here.” Was his reply.

My question would be – who does work there, that has an interest in how their workers perform as well as the ability to provide feedback and support for learning? And if managers are not able to do this, how can we modify our standard pattern of training delivery to provide the needed repetition and feedback?

Lessons Learned

I think the answers to these questions are fairly self-evident, but let’s summarize the lessons:

learn keyboard-small

  • Relevance – The skills being taught need to be relevant to the learner, in other words they need to see a direct benefit. Remember that I was highly motivated to take sales training because I saw it as a way to increase my income.
  • Customization – Training needs to reflect the realities of the job – canned simulations and role-plays that are completely artificial will never trigger recall. And changing realities need to be accounted for – so training needs to evolve as the challenges evolve: off the shelf may be cheaper, but it rarely meets real needs.
  • Organizational Support – Managers need to be involved, from planning the training all the way through to measuring and reinforcing performance improvement, and removing organizational obstacles to change.
  • Repetition – Training must be designed with opportunities for spaced repetition built in, in order to ensure that the 80% that is usually forgotten does not get forgotten.
  • ROI – Decreasing investment might temporarily increase the ROI ratio, but it will also result in lower quality, which in the long term will mean a lower ROI. Perhaps spending the money a little more wisely will produce better ROI?