In an era marked by rapid technological progress, evolving job markets, and dynamic global economies, the Return On Investment (ROI) of further education and training holds exceptional importance. As individuals consider dedicating their time, resources, and efforts to advance their education and training, the potential returns extend well beyond immediate knowledge achievement. The pursuit of further education and training stands as a strategic investment in personal and professional growth and promises an increase in employability, career progression, and an increase in higher earnings. The article aims to discuss the ROI of further education and training and how it involves not only financial gains but also the enrichment of skills, personal and professional development, and long-term success in an ever-changing landscape.
The ROI in further education and training involves assessing the benefits obtained as compared to the costs incurred in pursuing additional educational qualifications or training programs. It requires evaluating returns derived from investing time, money, and effort into advancing one’s education (Kosloski and Reed, 2010). Higher education is commonly seen as an individual-level investment, where time and educational funds are expected to result in enhanced skills and increased earnings. There are various contributing factors that determine an individual’s ROI in higher education, such as the duration of education, the likelihood of completion, potential earnings based on qualification, recognition of the institution, demographic background, and local economic conditions (Blagg and Blom, 2018).
The challenge of measuring the ROI in further education and training within an organisation is becoming increasingly important. There is a need to evaluate and identify the organisations required skills, expected training deliverables, measuring training effects, and assessing their impact on organisational effectiveness and efficiency (Dziechciarz, 2016). According to Dawning Truth (2012), the ROI for education and training is driven by the transformational influence of improved skills within an organisation. The investment that an organisation provides in education and training for its employees can result in an improved working capital thus facilitating extensive organisational growth. The fundamental principle is to identify specific areas within the organisation where an investment in education and training can yield a significant improvement in an organisations overall performance – referred to as training leverage points. Policymakers are led to engage in strategies to mitigate risks and enhance the positive impact of further education and training investments when organisations become aware of factors that influence lower returns (Blagg and Blom, 2018).
According to Glover et al. (1999), the following are three essential preconditions that must be met before training can begin; employees must possess skills and knowledge that organisations lack, employees must be motivated to apply these skills and the organisation must effectively direct training efforts toward performance improvements. The ROI towards further education and training investments offer various advantages such as:
Firstly, it improves understanding of the critical role that the human factor plays in terms of productivity, growth and driving technological change within the organisation
Secondly, ROI aligns with the principles of “continuous improvement” in training and emphasises key elements like documentation, measurement, and feedback
Thirdly, it provides valuable understandings for addressing the challenge of insufficient knowledge and skills transfer from the training environment into the workplace
Lastly, ROI enhances accountability and efficiency in the training function of organisations, thus contributing to overall effectiveness
Jasson and Govender (2017) introduced the Kirkpatrick-Phillips Training Evaluation Model as a tool for measuring the effectiveness of organisational training programs. This model consists of six levels, each serving a specific purpose in evaluating the impact and success of training initiatives as follows:
Level 0: Results – involves the assessment of whether training initiatives indeed contributed towards the organisations goals and objectives
Level 1: Reaction – focuses on participants’ reactions and perceptions of the training program and involves feedback on the effectiveness of the instructor and overall training experience
Level 2: Learning – assesses the depth of knowledge to which participants’ have acquired new knowledge, skills, and competencies from the training program
Level 3: Application – evaluates the application of knowledge and skills from the training program into the workplace
Level 4: Impact – identifies the extent to which training has influenced the productivity and overall performance in the organisation
Level 5: ROI – involves a comprehensive financial analysis to determine the ROI of the training initiative as compared to profits generated
In summary, the ROI of further education and training is designed to enhance the workforce with gains in productivity and efficiency and the inclusion of a more skilled, adaptable, and engaged workforce. As organisations invest in the continual learning and development of their employees, the returns are evident not only in enhanced job performance but also in increased job satisfaction, employee retention, and a workforce equipped to navigate evolving industry transformations. The commitment to ongoing education and training develops innovation, resilience, and sustained success in the business environment. The ROI is reflected in the endurance of strength and enthusiasm within an organisation’s workforce.
References
Blagg, K., & Blom, E. (2018). Evaluating the return on investment in higher education: An assessment of individual- and State-Level returns. Urban Institute, Washington. Retrieved from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwipib3_k5SEAxV0TkEAHXfMCc8QFnoECCsQAQ&url=https%3A%2F%2Fwww.urban.org%2Fsites%2Fdefault%2Ffiles%2Fpublication%2F99078%2Fevaluating_the_return_on_investment_in_higher_e
Dawning Truth. (2012). How to get a training ROI. Dawning Truth: Live a Better Life. Retrieved from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiqhKy4lZSEAxUORkEAHTFXCGE4ChAWegQIBxAB&url=http%3A%2F%2Fwww.dawningtruth.co.za%2Fwp-content%2Fuploads%2F2012%2F12%2FHow-to-Get-a-Training-ROI.pdf&usg=AOvVaw0r1nchKRtM
Dziechciarz, J. (2016, December). Measurement of the return on investment in education and in-house training. Acta Universitatis Lodziensis Folia oeconomica, 51-64. doi:10.18778/0208-6018.325.04
Glover, R. W., Long, D. W., Haas, C. T., & Alemany, C. (1999). Return-On-Investment (ROI) analysis of education and training in the construction industry. The University of Texas at Austin, Center for construction industry studies. Retrieved from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwipib3_k5SEAxV0TkEAHXfMCc8QFnoECEQQAQ&url=https%3A%2F%2Fwww.elcosh.org%2Frecord%2Fdocument%2F1561%2Fd000132.PDF&usg=AOvVaw1PhR1IHhxBGRrK74yGpkbu&opi=89978449
Jasson, C. C., & Govender, C. M. (2017). Measuring return on investment and risk in training – A business training evaluation model for managers and leaders. Independent Research Journal in the Management Sciences, 17(1), 1-9. doi:doi.org/10.4102/ac.v17i.401
Kosloski, M., & Reed, P. A. (2010, January). Determining return on investment for professional development in public education: A model. Journal of Workforce Education and Development, 5(1), 1-12. Retrieved from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiqhKy4lZSEAxUORkEAHTFXCGE4ChAWegQIAhAB&url=https%3A%2F%2Fwww.researchgate.net%2Fpublication%2F45724240_Determining_Return_on_Investment_for_Professional_Development_I
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