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Training Roi Calculator
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Assessing training effectiveness often entails using the four-level model developed by Donald Kirkpatrick (1994). According to this model, training evaluation should always begin with reaction to the training (level one), and then, as time and budget allows, should move sequentially through learning, transfer, and results – levels two, three, and four. Information from each prior level serves as a base for the next level’s evaluation. Thus, each successive level represents a more precise measure of the effectiveness of the training program, but at the same time requires a more rigorous and time-consuming analysis.
The Fifth Level of Evaluation
Kirkpatrick’s four-level model, however, does not require a specific cost savings to be ascertained. To obtain a true return on investment (ROI) valuation, the cost savings of the training program are compared to the cost of implementing the training program. According to Phillips (2005), this process moves Kirkpatrick’s four-level model to the next level. During the fifth level of evaluation, Level 4 data is collected, converted to monetary values, and compared to the cost of the program to denote the return on the training program’s investment..
The ROI formula, according to Phillips (2005), is the annual net program benefits divided by program costs, where the net benefits are the monetary value of the benefits minus the costs of the program. Phillips (2005) ROI formula is as follows:
ROI (%) = Benefits – Costs x 100 ÷ Costs
As an example, let’s assume that the benefits of a project management training program, isolated from other factors occurring within the organization, are $350,000.
Let’s also assume that the total cost of the program is $125,000.
The net program benefits are $350,000 – $125,000 = $225,000.
Following the formula above:
ROI = $225,000/$125,000 (1.8) x 100
ROI = 180%; thus for every $1.00 invested, $1.80 is returned after the costs of the project management training program are recovered.
The ROI Calculator is designed to help you calculate the ROI of a training program.
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