The Importance of Training & Development
In the past few years, Oil & Gas organisations are operating in very tough economic times; oil prices are low, and business uncertainty is high. In response, many organisations workforce, cutting back on services, increasing outsourcing and cutting training budgets. Training & Development
However, it may surprise you to hear that some of the world’s leading organisations are doing the opposite. Yes, they are increasing their workforce, sometimes employing the talent other short-term thinking employers are letting go. Many leading organisations are even increasing their training spend. In fact, current research suggests that over one-third of the top 100 companies report increasing their spend on learning and development. These are the companies that understand and appreciate the value of training.
There is a vital need in the Oil & Gas sectors to prove the connection between an investment in training andimprovement in organisational performance. While this is understandable, it creates some difficulties for those involved in training. The benefits of sustained long-term investment in training are so complex to estimate accurately.
An organisation that has sanctioned a significant increase in training expenditure will also be doing other things differently: there will be new managers, new products, and new markets, and so on. However, it is not acceptable to use this as a rationale to justify lack of accountability, and those involved in training must be able to make some estimation of the impact of their efforts or lose credibility.
There is, therefore, a strong case for attempting to evaluate training & development, particularly given the vast sums of money that are spent on it. However, there are some problems associated with the evaluation process which also must be considered. These are explored below.
There are various reasons for evaluating training:
- The evaluation enables the effectiveness of an investment in training to be appraised which can help to justify expenditure on future programmes.
- It allows the effectiveness of different approaches to be compared.
- It provides feedback for the trainers about their performance and methods.
- It enables improvements to be made, either on the next occasion or if the evaluation is ongoing, as the training proceeds.
- Recording learning achievements can be motivational for learners.
- The evaluation indicates to what extent the objectives have been met and therefore whether any further training needs remain.
Many different models have been developed by various writers; however, in this course, we follow the model proposed by Jack Phillips (Phillips, 2002)
Phillips has taken Kirkpatrick’s famous framework for evaluation (Kirkpatrick, 2005), and added two more levels. His modified version of Kirkpatrick’s four-level evaluation model, adapted to include measuring for return on investment (ROI), it looks like this:
- Reaction and planned action
- On-the-job application
- Business results
- Return on investment
- Intangible benefits
This model allows us to look more deeply at the financial implications of the impact of the training process and by analysing this in cost-benefit terms is producing a cash value for the training. This can, of course, be an adversefinding if the training & development is ineffective or unduly expensive. It is, however, important to remember that not everything is measurable. This is why Level 6, Intangible benefits are essential.
Intangible benefits refer to situations where the available data is too difficult to convert to monetary values or would be too costly to convert to monetary values, or where the line management (or others) are satisfied with intangible data.
An example could be where there is a noticeable improvement in employee satisfaction following a training intervention – the management may decide that there would be no real point in spending time and money in quantifying the value of this, even though they believe that a value exists.
Kirkpatrick, D. Land Kirkpatrick. J. D. (2005) Evaluating Training Programs: The four levels, 3rd edition, San Francisco, Berrett-Koehler
Phillips, J. J. and Stone, R. D. (2002) How to Measure Training Results, New York, McGraw Hill