Real-value Training

Optimizing the Returns of Your Training Expenditure

How much does your company spend on Training? ………………$. Whether you are spending a three, four or five digit figures on your Corporate Training this does not change the fact that Training is a very risky Business! On one end, it can prove to be of great value with high returns still, on the other hand, it can easily slip into a low impact activity with minimal returns. We consider that the second scenario, though, is currently predominant in the majority of companies that provide training to its staff.

The question of whether Training is an investment or a cost is an all time classic. Probably, originally asked by a CFO (or a CEO) who is trying to justify why the company should spend money on an intangible activity with a ‘very-difficult-to-measure’ ROI. What is interesting to note is that the validity of this question still defies time and continues to stand out as a critical factor for making Training expenditure decisions; but why?

Apparently, the answer is very simple. The question in itself is not the right one to ask because it does not bid for an answer that would let companies know how to determine whether Training is a cost or investment; it rather categorizes Training either as a corporate activity or a cost activity. By the same token, the invoice of Training continues to be on the rise despite the implicitly dominant skepticism of many numbers-people, a fact that keeps the ‘Investment or Cost’ question open.

With the above in mind, companies – specifically HR Professionals – are always on the look for ways to build the case for Training Expenditure, once and for all. Still, other companies, who already embraced training as a value adding activity, continue to look for ways to optimize their training investments.

Why are companies willing to spend money on Training?

Within the numbers-driven business world, it sounds a bit strange that companies refer to an intangible activity that is very costly and difficult to measure like Training. Ideally, the story began with the need of companies – specifically industries – to provide new joiners with the skills to operate machines or execute specific mechanical/routine tasks; for example, assembly line skills, material stacking skills, filing skills, basic computer skills, etc. In other words, companies initially embarked on technical training as an indispensable need for efficiency of business operations.

Still, time proved that technical training is not enough to cover all types of skill deficiencies. Jobs vary in terms of complexity and hence in terms of required skills. Obviously, technical training is ‘more fit’ for lower level jobs. Yet, this is not the case when we move up the organizational ladder where the nature of required skills becomes more complex. Higher level positions tend to require more behavioral and strategic capabilities (of course without disregarding technical skills) that cannot only be fulfilled through basic technical training. Senior jobs require a breed of technical and behavioral capabilities mostly recognized as Competencies.

Based on the above, one can deduce that, regardless of whether companies seek training to teach a skill or to build a complex competency, the bottom line reason of why companies train their staff is that they want to impact behavior. At one point in time, experience has proven that there is a relationship between skill/competency mastery and job performance. By the same logic, the conclusion was drawn on the relationship between training and change in behavior. Thus, the case of why companies continue to spend money on training is no more an enigma, rather it is a pragmatic intentionally made decision, sometimes by choice and many times by obligation!

Is it a Cost or an Investment?

Until a time comes when every single training activity is clearly, objectively and scientifically measured in terms of impact on behavior and consequently on business bottom-line performance, we will not be able to determine for sure whether training is a cost or an investment.

Although many companies have already embarked on measuring the impact of their training activities, this practice remains limited to specific businesses that can afford doing so. Yet, we consider that regardless if the impact of training on employees’ behavior – and consequently on business performance – is scientifically measured, the mere fact that a Training activity was delivered makes of every training expenditure an Investment.

By virtue of simple statistical logic, if your company delivers no training activities to its staff, the probability that change in behavior will take place is equal to or less than zero. On the other hand, however, if your company delivers training to its staff, then the probability that behavior change will happen is for sure not equal to and mostly greater than zero!

The above makes of every training an investment. However, from a business perspective what matters most is not only whether training brings value, but more so how big this value is. We consider that the ROI on Training should be measured at three levels:

  1. ROI on bottom-line Business Performance: this refers to direct and indirect impact of training on productivity, sales, cost optimization, profits, etc.
  2. ROI on Employee professional performance and personal development: this is where training has a direct and/or indirect impact on the employee’s competencies (knowledge, skills, and attitude) but with no impact on bottom-line performance. Similarly, this type of ROI refers to the direct and/or indirect impact that training has on the personal life of the employee.
  3. ROI on Business Environment: this ROI refers to the impact of training on the overall business environment including non-trained staff, organizational culture, talent attraction and retention, etc.

The primary goal behind training is to ensure that the acquired competency is being channeled directly towards boosting bottom-line performance, while the secondary objectives are to provide direct benefit to the trainee’s professional and personal competence, and positively impact the business environment.

Of course, the best case scenario is to reap the returns at all three levels where the bottom-line performance is boosted, Employee professional and personal competence is built up, and where the positive business environment is sustained.


Driving Training Execution

Having answered the classic question of whether training is a Cost or an Investment, we move into covering our second goal behind this study, which is providing a model for optimizing your Training Investment.

The Model we will provide is based on a Psychological Model of Human Behavior. This Psychological Model called LAT© was developed by the renowned Dr. Javier Bajer, CEO of Workforce Performance LLP. A prominent behavioral scientist and researcher, Dr. Bajer’s model focuses on understanding the change/evolution of human behavior and how we can utilize this understanding in implementing Organizational Transformation and Corporate Change. It defines the evolution of human behavior across four stages taking it from Belief, to Intention, to Promises and ultimately to Behavior (Habit).

He states that in order for change to happen it has to start with the belief of the person. If there is belief in the value of change then a coherent intention will be born. When believing in their intentions (or plans), then people are able to promise or commit to standards of work.   Yet, as promises are not enough for change to happen, it has to be practiced. Dr. Bajer states that more too often a lot of people go to the gym but not all of them do exercise. Still, and since exercise alone is not enough to sustain change and drive it forward, Behavior needs to become a Habit, i.e. people in the gym need not only exercise but exercise regularly. When behavior is translated into a Habit, this is where change would have happened.

Projecting this model onto Corporate Training proved to generate a robust Training Model that enable Businesses to drive their Training Execution track and hence optimize/maximize their Training Investment Returns. The LAT© model of Dr. Bajer can correspond to levels of impact that Training has over employees.

  • Belief corresponds to the company’s buy-in into the value of training.
  • Intention refers to the training plans, the assignment of budgets and time. This also marks the initiation of training delivery in the company, and is where learning mostly happens.
  • Promises account for the commitment expressed to employees regarding the role of training and its availability. This is where the link between delivered training, trainee’s commitment to practice and the consequent impact on this trainee’s status (i.e. career progress) is made.
  • Behavior is associated with driving learning towards a built-in habit for trained employees. It is the stage where the impact of what has been learned starts to be demonstrated through the trainee’s behavior. Habit relates to the transformation of Behavior into an internalized conviction where what has been learned and practiced through training is transformed into a habit reaping the results that were originally aspired behind the training. This is where the learning becomes second nature and skills can be seen in reality (i.e. focus on customer during a customer service conversation is realized); this is where Real-Value training lies.

At this point it becomes clear that company buy-in into training is not enough and accordingly will deliver minor Training ROI. However, when the company reaps the outcome of training in terms of hard results, then that is where the real value of training lies.

What is wrong about Training?

It has been shown above that training is/should be delivered within a company in order to impact behavior. Now, we all know that human behavior is a significantly complex concept that is the subject of numerous research and studies, including the studies of Dr. Bajer. Another point that we need to be aware of concerning human behavior is that, in as much as some of our basic behaviors are innate, most of our social behavior is acquired, i.e. learned either through teaching or by observation. In this respect, a key aspect of learning is time, meaning that learning and consequently behavior – let alone habits – cannot be acquired overnight. This is exactly what is wrong about training!

The majority of companies that provide training to their employees spend the bulk of their training budgets on the ‘Learning’ stage. Few spend the biggest part of their training budget on the ‘Learning’ and ‘Practicing’ stages, while, still very few companies have matured to drive Training Execution all the way from buy-in to Business Results.

The consequences of the above practice are the following:

  1. Non-value adding training activities
  2. Non-optimized training Budgets
  3. Weakened case for training

Bottom line, training continues to be perceived as a Cost and not as an Investment.


Real-value training is dependent on the degree of corporate awareness about the Training Execution continuum. The equation is very simple, as long as companies continue focusing on the Learning stage of training and spending most of their training budgets on this type of activities, training will continue to face credibility issues.

Unless HR Professionals take the initiative to drive Training Execution and shift their focus into a more comprehensive model where every training activity is intended to be driven to execution and not stop at the learning stage, they will not be able to build the case for training.

If training is meant to influence behavior and lead to habits that impact bottom-line performance of the business, then this needs to be proven through concrete measurable results. This is only possible by taking a deep breath and making sure that every training activity evolves from a Learning Session, to a Practiced Behavior to an internalized Habit!

Charles S. Saliba
Positive Thinker
Organizational, Leadership & HR Expert