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Continuous staff development through different training initiatives is part of an organisation’s annual HR budget cost. Religiously catered for by best practice organisations, the allocated funds are treated as an ordinary, required and normal cost to enablBenefits of training and development
Continuous staff development through different training initiatives is part of an organisation’s annual HR budget cost. Religiously catered for by best practice organisations, the allocated funds are treated as an ordinary, required and normal cost to enable staff to meet their personal and career development needs. Yet the actual return that is generated from such training and development activities is rarely calculated. Costs paid are merely gauged in relation to the budget but little or no regard of other intangible or indirect costs and benefits. To calculate training and development’s return on investment (ROI), one should quantify all costs and benefits resulting from each activity and subsequently determine if that activity met the learning objectives. Training and development can be compared to other capital investments and projects, whereby the expected rate of return is higher than the cost of capital. Similarly, when investing in human capital, the organisation should expect a similar return from its investment in training that is higher than the costs of that. However, the crucial first step before determining the ROI from training and development is the... Read more