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Measuring the Impact: Key ROI Models for Effective HRD in 2024

Measuring the Impact: Key ROI Models for Effective HRD in 2024

This article equips HR Business Partners (HRBPs) with the knowledge to demonstrate the value of Human Resource Development (HRD) and measure the effectiveness of training programs. Understanding how to develop talent aligns with strategic business goals and maximises return on investment (ROI).


The Strategic Role of HRD

HRD goes beyond training. It encompasses activities that empower employees to acquire new skills and knowledge, preparing them for future roles and challenges. Effective HRD contributes to:

  • Organisational Impact: Remaining competitive, retaining top talent, addressing skill shortages, and succession planning.
  • Employee Value: Increased job satisfaction, career growth, and contribution to the organisation’s success.

Human Resource Development (HRD) is critical in building a future-proof workforce. But how do you demonstrate the effectiveness of training programs and ensure they deliver a measurable return on investment (ROI)? This article explores key training evaluation and ROI measurement models for HR professionals in 2024.


Moving Beyond Satisfaction Surveys

Traditionally, training effectiveness was often gauged through participant satisfaction surveys. While valuable, these don’t tell the whole story. Modern HR professionals need robust models to assess the impact of training on employee performance and organisational outcomes.


Laying the Foundation: Essential Building Blocks for Effective Training Programs

  • Needs Assessment: Identify the gap between desired and actual employee performance to determine if training is necessary.
  • The ADDIE Model: This five-phase model (Analyze, Design, Develop, Implement, Evaluate) provides a framework for developing and delivering training programs. It helps ensure the training is well-structured, meets the needs of the learners, and can be effectively delivered.
  • Learning Methodologies: Understanding adult learning styles (visual, auditory, kinesthetic) and the 70/20/10 model (learning through experience, interaction, and formal training) is crucial for designing effective programs.


A Toolbox of Measurement Models

Here are six key models HR practitioners can leverage:

  • Kirkpatrick’s Four Levels of Training Evaluation: This classic framework assesses training at four levels: reaction (participant satisfaction), learning (knowledge acquisition), behaviour change (application of learning), and results (impact on business objectives). By evaluating across these levels, HR can identify areas for improvement and demonstrate the program’s contribution to broader goals.
  • CIRO Model (Context, Input, Reaction, Outcome): This model takes a holistic approach, considering the training context (needs assessment), inputs (resources invested), participant reactions, and most importantly, the training’s outcomes on individual and organisational performance.
  • Phillips ROI Methodology: Building upon Kirkpatrick, this model calculates the financial ROI of training programs. It helps quantify the cost-benefit analysis by considering pre- and post-training performance metrics, cost savings achieved, and increased productivity.
  • Brinkerhoff’s Success Case Method: This approach identifies “success stories” and “failures” resulting from training programs. Analysing these extreme cases provides valuable insights into the program’s effectiveness and helps refine future iterations.
  • Kaufman’s Five Levels of Training Evaluation: This model expands on Kirkpatrick, adding levels for “input” (resources and program design) and “process” (delivery methods and learner engagement). This comprehensive evaluation helps identify areas for improvement across the entire training lifecycle.
  • Anderson Learning Evaluation Model aligns training goals with the organisation’s strategic objectives. It utilises a three-stage cycle to:


Choosing the Right Model

The best model depends on your specific training goals and the resources available. Here are some considerations:

  • Complexity of Training: Kirkpatrick’s model may suffice for simple programs. Complex programs may benefit from a more comprehensive model like CIRO or Phillips ROI.
  • Data Availability: Some models, like Phillips ROI, require more data collection and analysis.
  • Organisational Priorities: Is financial ROI a primary concern, or are you focused on broader business objectives like improved customer satisfaction?


Data Analytics: Powering Informed Decisions

Data analytics plays a crucial role in utilising these models effectively. HR professionals can leverage HRIS data, learning management system data, and performance metrics to measure the impact of training on key performance indicators (KPIs).


HRBP Proficiency Indicators

  • Competency Gap Analysis: Use data to identify skill and knowledge gaps in the workforce.
  • Learning & Development Activities: Design and deliver programs to close these gaps.
  • Resource Utilisation: Leverage internal and external resources to develop effective programs.
  • Knowledge Sharing: Foster knowledge sharing through internal social networks.
  • Leadership Development: Monitor the effectiveness of leadership development programs.
  • Long-Term Talent Strategy: Develop long-term strategies to build and retain talent.


The Takeaway: A Multi-Faceted Approach

There’s no one-size-fits-all approach to measuring training effectiveness. By using a combination of models and leveraging data analytics, HRBPs can demonstrate the value proposition of HRD and gain valuable insights into the impact of HRD initiatives. This empowers them to demonstrate the true value proposition of training programs, optimise learning experiences, and ensure HRD delivers a measurable ROI in 2024 and beyond.


Investing in Your Future

Consider exploring our University Micro-credential HRBP Master Class – Strategic Training Investment And ROI Analysis as a launchpad for mastering Human Capital Development.  This program equips you with the foundational knowledge and practical skills to support HR initiatives within your organisation. Contact us now and explore our University micro-credential master class as a pathway to the Executive Master in HRM and the SHRM Double Certificate to learn more and unlock your career growth opportunities with our affordable instalment fee plan and flexible schedule.

Author picture

Dr. Roy is the Group Managing Director & Chief Executive Officer and holds responsibility for the overall strategic management & leadership in achieving the graduate schools’ vision & goals. His own belief for lifelong learning, as well as his drive for business management excellence, has brought him to achieving his passion for being part of the postgraduate education sector in Malaysia.

Dr Roy Prasad

(Hon Professor) FInstAM 

MHRM (MY), Grad Mgt (AU)

Group Managing Director &
Chief Executive Officer

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