Saturday, July 24, 2010

Putting a value on training

Life is funny and full of coincidences. No sooner had my MBA classmate Federico sent out an e-mail to the entire intake about the IE HR Club initiative on peer capacity building, that McKinseyQuarterly published this article the excerpt from which I am copying below. The coincidences are:

  • Federico and other HR Club members have come up with this initiative because building skills (particularly "softer" ones) is crucial in the MBA environment and very often can be overlooked because of the strict demands of the "core" MBA program;
  • IE HR Club and McKinsey posted their learning & development concerns in the same week, and
  • Federico works for McKinsey :)
A series of workshops and master classes will be scheduled shortly. They will be conducted by fellow students who have significant expertise in their respective areas and professional trainers. Everybody is welcome to contribute. I will be keeping you posted on the development.


Putting a value on training

Training programs generate greater value for organizations when the curricula reflect key business performance metrics. Testing real-world outcomes is crucial.

All organizations train their people, and most spend significant sums doing so. Yet they generally don’t have any idea whether they’re getting any business value from training. Beyond teaching new employees the specifics of their jobs, most companies train staff in areas such as leadership, communications, performance management, or lean operations. But they typically measure training’s impact by conducting surveys of attendees or counting how many employees complete courses rather than by assessing whether those employees learned anything that improved business performance.
This approach was, perhaps, acceptable when companies had money to spare. Now, most don’t. Yet more and more, organizations need highly capable employees—90 percent of the respondents to a recent McKinsey Quarterly survey said that building capabilities was a top-ten priority for their organizations. Only a quarter, though, said that their programs are effective at improving performance measurably, and only 8 percent track the programs’ return on investment.

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