original question—-Usually when there is an economic downturn, the first item on the budget to be cut is training. This is usually because managers do not understand what specific benefits are derived from training and development initiatives, especially with soft skills training. In light of this concern, what is “ROI of Training” and how can it be used to select and justify training programs
Response questions. Student must respond to two classmates with at least 200 words and please cite the sources.
Student 1 from Scott, Tiffany, posted 08/15/2018 04:12 PM CDT
In the event of an economic downturn, the first item to be cut from the budget is training. Managers don’t understand the benefit of training and how proper training impacts the business. The development of employees is an important aspect to any line of business as it greatly contributes to the growth of the business. The return of investment is “monetary value of the results (benefits of training minus cost of training; expressed as a percentage)” (Bernardin and Russell, p.112, 2013). Management must analyze the effects of training, particularly what their desire is to get out of the training and what they want their trainees to accomplish. Furthermore following the training it has to be determined whether the aspects of training was exceeded and met their standards (Rowden, 2005). When management is reviewing the ROI of training, they must consider all things that make up training of the employee including the training facilitator and the materials that are being used for the training. It has to be determined whether the return of investment of training greatly differs if the employees are not properly trained, and can the business afford to not properly train the employees and deal with inconsistency as a result. The return of the investment when it comes to training is beneficial once the management team fully understands the impact it has on the organization. “Many companies do not undertake the huge effort needed to evaluate a training program. The companies that maintain detailed records on employee performance and characteristics are best suited for analysis” (Return on Investment, 2000). Perhaps if companies maintain a record of employee performance they will see the benefits of the return on investment when it comes to their training program.
Student 2 from Benson, LaTonya, posted 08/14/2018 09:18 PM CDT
In a time of economic crisis, managers are forced with the challenging decision to eliminate training to accommodate the budget; however, the future of organizations lies on the shoulders of well-trained employees. As organizations recognize the importance and necessity for training and development, budgets continue to increase annually by organization, industry, and country. (De Alwis & Rajaratne, 2011).Measuring the return on investment (ROI) in training and development and performance improvement has consistently earned a place among the critical issues in the Human Resource Development (HRD) field. HRD plays a significant role in supporting and driving a continuous improvement culture. Training can be a powerful building block in allowing a business to achieve its goals, indicating that it must be seen as a strategy and not an event. Training in any field is imperative for the successful development of employees; if employees are not trained properly, they are not able to meet performance expectations. (De Alwis & Rajaratne, 2011). For example, if an employee is hired in the payroll department and has the proper education but lacks experience and training, this creates many opportunities for errors. With that said, skill training and upgrading are necessary to develop the core competencies needed to maintain a productive labour force. (De Alwis & Rajaratne, 2011).
Job training services have been found to increase long-term earnings. Hollenbeck et al. (2005), Mueser, Troske, Jeon, and Kahvecioglu (2010), Barnow and King (2005), Macro et al. (2003), Couch (1992) and Hollister, Kemper, and Maynard (1984). The evidence shows that training programs generate at best modest increases in earnings in the short run but generate larger gains in the long run. (Fleissig, 2014) This also applies for high school students entering the workforce. Training programs are effective in helping individuals find and retain jobs. Individuals with at least some schooling have over a 60 % probability of finding a job. While the probability of finding a job is highest for those without schooling, only ten individuals with no schooling were enrolled in a training program. Studies show an augmented return on investment (ROI) that includes the likelihood of finding and retaining employment. (Fleissig, 2014)