Procter & Gamble (P&G) believes the closer an individual is to the business, the easier it is to make evaluations; the further away one is, the harder. P&G breaks out their Return On Investment (ROI) evaluations into two different sections:

1. Collocated

2. Non-Collocated

It is nearly impossible to perform a single ROI that will cover (1) the entire corporate learning environment and (2) the entire plant learning environment. There are always different factors that are involved in terms of the types of performance measured in each environment, and some are not as simple as the cost of travel. Consider this:

If you are in a collocated area, your travel is going to be from Line A over to Plant C. Whereas in a non-collocated area you are flying into Cincinnati just to take a course in the John Pepper learning center.

Sticking with the collocated model, P&G really started noticing much of the savings could be defined. Examples include:

• Without having to purchase manuals, there is a definable reduction in the training budget.

• If there is one person creating web-based training, the need for individuals to stand-in the classroom decreases.

It is much easier to measure ROI effectively in the collocated environment due to machine downtime, overtime, and instructor and material reduction. In the past, P&G had to shut their city plant down twice a month for two hours, just to do all the mandatory safety training. They found a way to avoid shutting down the plant, and were able to save $500,000 — not including many other factors involved. Recently, another plant just evaluated their overtime and downtime elimination to about $450,000.

As you get into other areas, the cost of having someone fill a seat at the corporate learning center comes to mind. P&G took several courses and measured the ROI. Bill Martin, Senior Leader of Interactive Media at P&G, used to train the Creative Innovative Learning Solutions course quarterly with 20 people in each class — a total of 80 students. He realized — by looking at the following factors — that if they could eliminate just one person from the classroom, they would save $1937.50. Costs to consider include:

• How many people traveled and from where did they travel?

• What is the average cost of the hotel, rental car, and dinner?

• What is the cost of the classroom, materials, and instructors to bring it all together?

Martin noted that using this method, he can evaluate classroom training versus web training, and “it’s not an ROI in the classroom, but it’s whether I do it one way or another. ”

For example, when reviewing communication and leadership skills, it is extremely hard to determine whether they played a role in the environment. The reason being is partly due to the number of factors that have the potential of disrupting the study. These can include:

1. A change in boss

2. An individual moves into a new role

3. The organization just changed or morphed from — for example — IDS to GDS

Over a period of time it is difficult to measure whether or not what was taught in communication skills actually paid off in a dollar amount. If it is looked at more from a collocated/non-collocated point of view, it is easier to see what it costs to eliminate an individual out of the classroom, simply by doing it in a more effective manner.

Duration : 0:3:31

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