The value of expenditures related to training

The gap analysis generates a list of training options/needs.Now you can assess the list based on the goals and priorities of theorganization, both currently and in the future.A scale of 1 to 3 could be used with number 1 beingcritical, 2 being important and 3 being not important at all.

Here are someexample criteria for rating the level of importance for training options:Solution to a problem. For example, when there is an employeeperformance problem that has clearly been identified as a training issue, thenproviding the training would generally solve the problem and the company wouldhave a fully competent employee.Cost. Cost of training is a significant factor that needs tobe weighed in terms of importance. Depending on the situation the organizationmay be willing to invest a significant amount in one training but not inothers.Number of employees trained x cost of training = total costof training Return on investment.

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Return on investment is a calculationshowing the value of expenditures related to training and development. It canalso be used to show how long it will take for these activities to pay forthemselves and provide a return on investment to the organization. See, HumanResource Development Series Part III: Measuring Training & Development ROI.Legal compliance.

If any of the training needs from the gapanalysis are legally required based on federal, state or industry laws or tokeep employees’ licenses or certifications current, then typically thesetrainings would be a high priority. See, Legal and Regulatory Training: WhatTraining Must Employers Provide to Employees?Time. Sometimes the amount of time involved to build thecapacity within the organization will create more of an issue because it willtake away from employees’ completing their other job duties. In this case, itmay be more beneficial to hire the talent from outside the organization oroutsource the task.

In other cases, like succession planning, the organizationcan afford a long-term commitment to building the capacity from within.Remaining competitive.This may including being competitivein the marketplace or the ability to hire top talent, among others.

Maybe alack of employees’ competencies in a particular area is affecting companyrevenue. For example, if the employer trains employees in a new product orservice and that product or service can be used to generate more revenue, therevenue could possibly far outweigh the cost of training.After you have assessed all the training needs/options, youwill have a list of training priorities for individual employees, departmentsor the organization as a whole. 

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