Study Says Employee Training Increases a Company's ROI

By David Essex, ITworld |  News

"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.

One company's top-level commitment
For all this to happen, companies need standard metrics for evaluating
their training efforts.

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