Developing our Return on Investment in Education and Training Jonathan Evans Regional Director, Skills for Health October 5 th 2010

A word from our sponsors “Our staff are our most valuable resource”

A word from our sponsors “Our staff are our most valuable resource” “Money is our most valuable resource” Dilbert

Introduction  The context  Underlying issues  Why use ROI Analysis?  ROI methodology  What should we do about it?

The context The NHS must resist the indiscriminate tactics of the past for delivering savings and look to find true efficiencies that deliver improved quality, maintain patient safety and are sustainable in the long term. An indiscriminate approach to reducing services, staffing and education and training will alienate the public and staff and cause long term damage. Improving quality and productivity in the NHS whilst facing the financial pressures A joint statement from the Academy of Medical Royal Colleges, Healthcare Financial Management Association and the NHS Confederation, September 2010

Underlying issues  Training and development delivers skills  Skills drive performance outcomes  Performance outcomes deliver key business benefits – time, quality, costs etc  But when money is tight……..  So “show me that it is so, Joe”

Show me!  How good are we at demonstrating the value of what we do?  We can’t demonstrate impact and value unless we have measurement systems in place  If we can’t report impact and value, we can’t demonstrate our contribution to the organisation’s well being  We can’t make choices about where and how to invest without the right data  So when money is tight…….

8 ROI Methodology A systematic approach to evaluation - generates six types of data: 1.Reaction to a project or program 2.Learning skills/knowledge 3.Application/Implementation progress 4.Business impact related to the project or program 5.Return on Investment 6.Intangible Benefits …..and includes isolating the effects of the program

9 Exercise … Of the following 6 types of evaluation which do we do most/ least frequently? Reaction to a project or program Learning skills/knowledge Application in the workplace Business impact Return on Investment Intangible Benefits

How frequently do major corporations go there?

Why Use Impact and ROI Analysis? Discussion (5 minutes)

12 Why Use Impact and ROI Analysis?  Presents training and development solutions as an investment, not a cost  Ensures alignment of programmes to service and business needs  Improves support for programmes from your sponsors  Sells the benefits to your own organisation  Gives credible measure of your value to your organisation It also  Enhances the design and implementation process if you don’t design for Return on Investment, you probably won’t get it!

If you don’t design for Return on Investment, you probably won’t get it!

14 Defining the Return on Investment Benefits/Cost Ratio ROI Monetary Benefits Programme Costs Net Monetary Benefits Program Costs = = X 100

15 ROI Example Costs for project£80,000 Benefits from project £240,000 BCR = ROI = £240,000 x 100 = 300% £80,

ROI Calculation: Exercise

Show me!  We all have some good case studies – but “we would say that wouldn’t we?”  We can’t persuasively demonstrate impact and value unless we have measurement systems in place  If we can’t report impact and value, we can’t demonstrate our contribution to the sector  THE QUALITY AND DESIGN OF EDUCATION AND TRAINING IS MISSION CRITICAL!!!  We can use ROI to improve education and training design

Designing for ROI Needs based Addresses competences required Learning outcomes – based on application Success criteria – based on improvement Activities which force application in the workplace – not just learn about but do it Costings to be accurately measured Value of outcomes accurately measured See the quick checklist!!

The Health PICKUP Model Final module assessment includes the following: “Does your project make an actual or potential contribution to improving workplace performance”. This will be assessed by your adviser and line manager

20 Exercise: So why not use ROI?

21 So why not use ROI? Lack of knowledge: “It can’t be done”; “I don't understand it” Lack of time Fear: An unsuccessful evaluation will reflect poorly on our performance. The data will be misused A negative ROI will damage our programme/ organisation. Our budget won’t stretch to this We are not asked to do it.

22 How should we move ahead? 1.Ensure needs are mapped!!! 2.Ensure mapping of provision to need 3.Evaluate for application and impact and….. ROI? 4.Insist on cost effectiveness at the design stage

Do you want to move forward with this? Contact Jonathan Evans, Skills for Health Tel

24 Isolating the Effects of the Program Use of control groups Use of control groups Trend line analysis Trend line analysis Forecasting methods Forecasting methods Participant’s estimate Participant’s estimate Management’s estimate of impact (percent) Management’s estimate of impact (percent) Use of experts/previous studies Use of experts/previous studies Calculate/Estimate the impact of other factors Calculate/Estimate the impact of other factors Customer input Customer input

25 Converting Data to Money Credibility Resources Needed Standard valuesHighLow Records/Reports analysisHigh DatabasesModerate Expert EstimationLow

26 Cost of a Sexual Harassment Complaints 10 Complaints Actual Costs from Records Additional Estimated Costs from Staff Legal Fees, Settlements, Losses, Material, Direct Expenses EEO/AA Staff Time, Management Time £300,000 Annually Cost per complaint = £10,000 £300,000 10