ASTD study: employee training increases a company's ROI

By David Essex, ITworld.com |  Business

While it's too early to say which types of training are most effective, the data is
yielding some answers that ASTD may soon publish in a report, Van Buren says. "The
training content that matters most is IT training," says Laurie Bassi, another study
coauthor. Bassi is director of research at Saba Software (based in San Francisco), a
maker of corporate-training software. This holds true for both major types of IT
training -- technical training for specialists and the basic computer-skills training
offered to all employees. Bassi adds that preliminary indications show that so-called
e-learning -- courses delivered over the Internet or corporate networks -- may
not be as effective as classroom training and other traditional educational techniques.
However, Internet-delivered training is a lot more economical

SEC reports

Having established training's ROI, ASTD advocates that publicly traded companies report
training expenditures in the quarterly and annual financial reports they file with the
federal Securities and Exchange Commission. This would accomplish two important things,
the study says: it would provide investors with new information that could improve
their portfolio performance, and it would give managers increased confidence that they
would be rewarded in the marketplace for putting money into human capital.

A related advocacy effort is underway at the Brookings Institution (based in
Washington, D.C.), which will soon publish a report, entitled "Unseen Wealth,"
detailing the conclusions of a task force studying the importance of intangible assets
in today's knowledge-based economy. The report was cowritten by Steven Wallman, a
former SEC commissioner; Bassi is chairperson of a subgroup that worked on the
human-capital component.

Brookings and the ASTD want the SEC to require companies to report human-capital
investments such as training expenditures, but they say that the wheels of bureaucracy
have been slow to turn. "The SEC seems unwilling to embrace change," Bassi
says. "Realistically, the best we can hope for is some companies will see it in their
interest to report things voluntarily." Says Van Buren: "We have had conversations with
the SEC. Their position is they have a pretty good system right now."

"The commission does not have anything on the table at the moment," admits SEC
public affairs officer John Heine. He adds that the SEC often takes its
financial-disclosure cues from the Financial Accounting Standards Board (FASB; based in
Norwalk, Conn.), the group that promulgates the familiar Generally Accepted Accounting
Practices (GAAP). Tim Lucas, FASB's director of research and technical activities, says
the profession is struggling with how to quantify intangibles. "These are hard
questions. For one thing, the definition of training can be troublesome, " he says.

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