The ROI of the Right Training

Blog Summary: (AI Summaries by Summarizes)
  • Investing in knowledge provides the highest ROI.
  • Training can save individuals and teams significant amounts of time.
  • The break-even point for training costs is typically around 2-4 weeks of time saved.
  • Great instructors can provide valuable insights and help avoid mistakes.
  • The intangible benefits of training, such as avoiding the wrong technology, can provide significant ROI.
An investment in knowledge pays the best interest.
Benjamin Franklin

Benjamin Franklin is saying that investing in yourself or your team’s knowledge will give you the highest ROI (return on investment). By investing in knowledge, you’re going to be far better off. Let’s talk about the specific ways that happens with training.

Time Saved

At the end of classes, we do a post-class survey. My surveys ask “how much time would you estimate this class saved you?” This is the easiest metric or direct ROI calculation of training. For teams, each person will have a different amount of time saved. This can be anywhere from a week to several months. The amount of time will depend on the individual’s previous experience with the technology or advanced programming skills.

Teams save an average of 1 month through a four day class

and individuals save 2 months or more.

Let’s take some calculations of the ROI based on the numbers from the previous post on training costs. We’ll start with an individual. If you make $100,000 per year with a 40 hour work week, that would be $96 an hour. Let’s assume you’re doing a course that takes 20 hours. And you take another 30 hours of practice.

Course Cost$3,000
Attendance Cost$1,920
Practice Cost$2,880
Total Cost$7,800

Your total cost to pay for, attend/listen to, and practice is $7,800. Now’s let’s calculate out your time saved.

Amount of TimeMoney Saved
1 Week$3,840
2 Weeks$7,680
3 Weeks$11,520
4 Weeks$15,360
8 Weeks$30,720

From these two tables, you can see that your break even point is saving 2 weeks of time. The break even point is when the amount you’ve spend is less than or equal to (<=) the amount time/money you’ve saved. It’s really when you get into +4 weeks that you see some real ROI.

Now, let’s calculate a team’s ROI numbers from the previous post on training costs. We’ll be using a 15 person team that makes an average of $100,000 per person. The class will be a four day class. Let’s calculate out the costs.

Course Cost$30,000
Salary Cost$46,153
Opportunity Cost (5x)$115,384
Total Cost$191,537

Your total cost to pay for, attend/listen to, and practice is $191,537. Now’s let’s calculate out your team’s time saved.

Amount of TimeMoney Saved
1 Week$201,921.25
2 Weeks$403,842.50
3 Weeks$605,763.75
4 Weeks$807,685.00
8 Weeks$1,615,370.00

From these two tables, you can see that your team’s break even point is saving 1 weeks of time. Once again, the break even point is when the amount you’ve spend is less than or equal to (<=) the amount time/money you’ve saved. It’s really when you get into +4 weeks that you see some real ROI.

Instructor Experience

Sometimes your take aways from a class aren’t just time saved; they’re how the instructor helped you. They’re everything from understanding a concept that you couldn’t before to advanced help like concepts you had no idea you needed to know.

Great instructors are the repositories of knowledge from many different companies. We peer into and experience many different companies and their challenges. A great instructor will help you avoid other companies’ mistakes and imitate their success.

 

It was frustrating. We were failing and the Vice President was watching us do it. We had all the books and tried to work through the steps, but our use of relationship database systems like MySql and Oracle meant we were approaching Hadoop in a fundamentally incorrect way. Our RDBMS solution was slowing down the Big Data solution.
Steve R.

Senior Hadoop Engineer

This is a quote from a student that was floundering in a project. They were six months behind and I turned them around during a week long training. Take another glance up at the team ROI table and think

Other concepts simply aren’t in books. Some books don’t cover the interaction of one technology with another. Other times, they can’t cover all of the best practices due to time or space constraints.

My students come in thinking they need one thing and don’t realize the other concepts or technologies they need. It’s my job as an instructor to teach what they know they need and what they didn’t know they needed.

The Intangibles

Perhaps my most fulfilling teaches are when I can help a company with what not to do. Yes, that is very odd and costs me money. If my customer or student is doing something wrong, it’s my job to help them. I’ve had several companies realize several days into a training that they were doing the wrong thing. Sometimes, it was that didn’t have a Big Data problem. Other times, it was that the technology didn’t do what they wanted or couldn’t do what they wanted.

What’s the ROI of these experiences. A casual observer might say they’ve wasted a week, plus all of the team’s costs. That’s not correct. I’ve saved them months or even years of pain from using the wrong technology. That’s some major ROI.

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This post is the third one in a series talking about costs in training and identifying good training. This first post considers the hidden costs of bad training. The second post shows how to identify good training, even if you’re not an expert.

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