5 Steps for Building a Business Case for Employee Training
5 likes9,032 views
The five elements that should be included in a business case for employee training are: 1. A scenario analysis that explains the most likely, best case, and worst case outcomes of the training. 2. Linking each expected benefit of the training solution to an expected operational effect. 3. Identifying key performance indicators (KPIs) for each expected benefit to show how success will be measured. 4. Stating the risks of not implementing the proposed training action, such as becoming less competitive. 5. Aligning the training proposal with the organization's strategic goals to show how the training will support those goals.
5 Steps for Building a Business Case for Employee Training
- 1. Steps to Building a Business Case for Employee Training
- 2. The Steps When presenting a proposed training program to senior leadership, don’t make the mistake of getting caught only discussing the ROI. Executives expect something much different in a true business case. You can certainly add complexity – if needed – but if you cover these basic 5 elements in your business case for employee training, you significantly improve the chances of getting your proposal approved. 1. Scenario analysis – most likely outcomes, best case and worst case. 2. Link each expected benefit of the solution to an expected operational effect. 3. Identify the KPI (key performance indicator) for each benefit. 4. State the risk of not taking the proposed action. 5. Align proposal with organization’s strategic goals.
- 3. 1. Scenario Analysis The scenario analysis explains the most likely outcomes, best case and worst case scenarios. Most Likely outcomes. The outcomes have to be based upon solutions aimed at specific business problems or challenges. Examples might be: • Customer retention • Employee engagement • Productivity • Sales Be realistic, but make sure you are explaining in clear, direct terms what a successful employee training initiative could deliver. Best case scenario. What might happen if things really go well? Frankly, we are not strong advocates of using this narrative very often. If you say it – this is likely WHAT the executives will remember. But . . . . Worst case scenario. This IS a good thing to explain. Make some assumptions about lower than usual adoption, and lower than expected learning transfer, but even at these LOWER than expected rates of success, you will STILL see positive results. 2. Link each expected benefit of the solution to an expected operational effect. This element can be a bit tricky, so be conservative! Yes, you expect benefits, but don’t overstate your case. Make sure the benefits you identify can be directly tied to the employee training you are proposing. For instance, if you are offering communications skills training, you might be hard-pressed to ties the benefits of that training to customer retention. But, if you are proposing customer service training and how to handle difficult customers as a PART of a communications curriculum, you are on the right track.
- 4. 3. Identify the KPI (key performance indicator) for each benefit. This is an element of every business case that can get bogged down in endless details. Don’t let that happen to your proposal. KPI is not the same as the old-fashioned ROI calculation. Think of it this way. If you are trying to improve customer retention, what is each customer worth? What would a 1% improvement in customer retention be worth? That’s the way to shift the thinking from a COST analysis into a true business benefit analysis of the benefits of the employee training you are proposing. So – identify the key performance indicators for the business problems you seek to solve. If you are not sure what they are, ask your self a very basic question. If this training works, HOW will we know it? WHAT will improved performance look like, and HOW will we know? The answers to those questions will get you pointed in the right direction for your KPI. 4. State the risk of not taking the proposed action There is a great comfort level with the status quo. It doesn’t threaten us. It’s known. We don’t have to worry about upsetting anyone, and best of all, we don’t have to change a single thing. That is certainly a common point of view we run into quite a lot. Here’s an alternative perspective. There’s our competitor, and guess what? They aren’t making a single change! Cool. We can move forward without any fear of competition from them for this new market segment, and our innovative new product will stand alone in the market. Change is a crucial and necessary part of business. Without it, businesses go OUT of business. Our employee training programs are exactly the same. If we don’t change the way we train and relate to employees, we will see our employee training efforts become completely obsolete and irrelevant. An organization without highly trained and skilled employees will be far less competitive and profitable in this market, so up-to-date training really isn’t optional. It’s life sustaining.
- 5. 5. Align proposal with organization’s strategic goals. Not every organizational goal can be supported by employee training initiatives. If you think carefully about setting high level, strategic goals, the well-crafted goals are supposed to be attainable. If the goal required a substantial investment in time, energy or employee development to attain, it might not be a well-crafted goal. On the other hand, ALIGNMENT of training objectives to organizational goals so the training efforts support organizational goals is a completely different matter. Let’s use our customer retention objective of a 1% improvement. Enhanced customer service skills will clearly support that goal. But employee training should not be the ONLY strategy being implemented to achieve the goal. Download BizLibrary’s Strategic Implementation Guide