Learning & Development

3 Formulas for Better Training

To train better and to get more funding for training, do it “by the numbers.”

These days, business is increasingly ruled by numbers. But there are some things that can’t be quantified, right? Like how the human mind can be affected by training.

Not so, says training industry leader Bob Pike, speaking to a meeting of the American Society for Training & Development (ASTD) earlier this year. Pike started his address by first flatly stating that, no, not every problem can be solved by training.  “Coaching, systems changes and recruiting,” are also solutions to performance problems, says Pike.

But when training is the answer, Pike suggested two formulas trainers should keep in mind:

—The 90/20/8 Rule. Pike explained that trainers generally believe that a given audience can listen with understanding for 90 minutes, but that they only retain 20 minutes of the information presented. Those two factors are then dependent on a third: The trainee must be personally involved in the training every 8 minutes. Use visual and verbal stimulation, make the training relevant, and let people network with each other and you’ll keep them involved, Pike says.

—The Ebbinghaus Curve. Pike also explained that how fast trainees forget things they’ve learned has also been plotted. The first work in this area was published by a German psychologist, Hermann Ebbinghaus, in 1885, who explored the human rate of forgetfulness by memorizing nonsense words, then methodically testing himself over time as to how much he remembered. As explained by Pike, a trainee can remember 90 percent of what they’ve learned after an hour, 50 percent after a day, 25 percent after 2 days, and only 10 percent after 30 days. That’s the reason additional reinforcement training needs to be done, Pike maintained. Subject matter needs to be revisited 6 times before it’s truly learned. Importantly, he added, the more relevant the subject matter, the greater the retention.

Calculating Training’s Cost vs. Training’s Benefits

Another valuable way to quantify training is advanced in the BLR book, Building the Best Training Program. What the authors did was calculate a Return on Investment (ROI) analysis that can be used to sell management on spending the money for training, and that after the training is done, can measure its effectiveness in top management’s favorite language: dollars and cents. Here’s how it works:

First, quantify the costs of the training, including materials, instructor fees, facilities rental, lost productivity while workers are training, and administrative costs.

Next, quantify the monetary benefits from the training, including labor savings, productivity increase, new revenue, and lower turnover costs.

Finally apply these numbers in this formula:
ROI % = Monetary benefits – Training Costs x 100 / Training Costs

An example from the book: Say training done increases production by 20%, equal to $800,000 in new revenue, against a $200,000 total training cost. If so, then $800,000 – $200,000 x 100/$200,000 = an ROI of 300%, or $3 back for every $1 spent.

Bring in results like that from training and, with deference to Professor Ebbinghaus, your management won’t soon forget it.

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