Getting to a Return on Investment for Transportation Training

Presented by: Victoria Beale, JD, SPHROhio LTAP Center Director

August 1, 2012 – Grapevine, TexasNational LTAP Association Conference

Why an ROI for training?

Every dollar from the transportation budget

MUST be spent on value added activities.

The true value of training is not an easy investment

benefit to quantify.

The Ohio PerspectiveDetermined we needed to have a systematic

method to provide quantifiable, data driven cost savings to executive leadership on the value of

our training programs.

Our Foundation - Kirkpatrick

Kirkpatrick levels

Leve

l 1To what degree participants react favorably to the learning event. Le

vel 2To what degree

participants acquire the intended knowledge, skills and attitudes based on their participation in the learning event.

Leve

l 3To what degree participants apply what they learned during training when they are back on the job.

Leve

l 4To what degree targeted outcomes occur as a result of the learning event(s) and subsequent reinforcement.

Leve

l 5To what degree the investment in training saves the agency money in its core business functions.

When Should ROI be Calculated?

• Importance of program to agency in meeting its operational goals

• Training closely linked with agency’s strategic initiatives

• Programs which are expensive to implement

When Should ROI be Calculated? (cont’d)

• Programs with a large target audience

The Kirkpatrick Levels Explained

ROIResults

TransferLearningReactions

Kirkpatrick – Level 1

• Often referred to as ‘smile sheet’ feedback

• Measures a participant’s immediate reaction to the training attended

Kirkpatrick – Level 1 Focus Areas

Pacing of course materials

Content objectives

Instructor knowledge and discussion facilitation/responsiveness

Perceived impact

General questioning (what was liked, what could be changed, etc.)

Kirkpatrick – Level 1 Results

Measures short-term success of the training delivered.

Kirkpatrick – Level 1

So they liked the training. Did they learn anything?

Kirkpatrick – Level 2• Knowledge

assessments conducted while training is occurring

• Measures immediate understanding and short-term retention of training information

Kirkpatrick – Level 2 Examples

Written testing

Role play/simulation

Activities and games

Kirkpatrick – Level 2 Results

Confirms to the trainer and the

training program that learning

occurred.

Kirkpatrick – Level 2

So learning occurred. Are they actually going to apply it?

Kirkpatrick – Level 3• 60 day follow-

up to both participant and manager

• Ask for specific examples of how participant is now applying the information in his/her work

Kirkpatrick – Level 3 Examples•Recommended as a low-cost method to collect data from participants around the state at 60 days or longer after the participant has completed the training to determine applicability of training information to the participants job functions.Follow Up Survey

•Recommended as a method to collect individual data throughout the state from participants on the application of training learned to their assigned work tasks. Interview•Recommended as a method to collect group data throughout the state from participants on the application of training learned to their assigned work tasks. Focus Group•Recommend the observation technique in conjunction with other work site audit procedures, such as QARs, in order to determine whether or not the training was applied.Observation

•Recommend "Individual Implementation Plans”. Each participant completes a plan for 3 – 5 specific things they will implement or undertake as a direct result of the training experience. The plan is given to each supervisor and the program manager does a follow up on selected participants as a spot check.Work Review

Kirkpatrick – Level 3 Results

Confirms that the participant is applying what

he/she learned in the training to his/her job responsibilities within the agency.

Kirkpatrick – Level 3

So they are applying it. To what degree are the targeted outcomes from the training occurring as a result of the participants applying the information

learned?

Kirkpatrick – Level 4

Must be customized to the business process

and performance measures specific to

the topic area.

Kirkpatrick – Level 4 Examples

Borrowed MetricsSurvey

Focus Groups

Kirkpatrick – Level 4 ResultsEquipment• Decrease in accidents• Decrease in cycle time/job

completion time

Highway Workers

• Liability avoidance after vs. before training received• Work zone safety incidents before vs. after• Reduction in number/cost of change orders due to

increased flexible work force

Safety• Decrease in injuries, lost time

and severity of accidents

New Manager Training

• Errors made in payroll process, purchasing, etc. for those trained vs. those not trained

Fraud & Ethics

• Reports made after training began vs. before and funds saved from possible continued violations

Level 4 Examples

Timekeeper Training to Reduce Errors

Level 4 – Example 1

Sep-10 Oct-10 Nov-100

2

4

6

8

10

12

14

16

Time Keeper Errors

Group A - Experimental GroupGroup B - Control Group

Num

ber o

f Err

ors

Used a Control Group and an Experimental Group

Great Statistical Method to Obtain Measureable

Improvements from Training

Level 4 – Example 1 (cont’d)

Cost to correct errors before training Cost to correct errors after training $-

$1,000,000.00

$2,000,000.00

$3,000,000.00

$4,000,000.00

$5,000,000.00

$6,000,000.00

$5,563,777.44

$855,965.76

Cost Savings on Payroll Errors Attributed to Training

Annual Cost

Level 4 Examples (cont’d)

Mechanics Training

Level 4 – Example 2

2008 2009 2010 2011 2012 2013 2014 2015 2016 $-

$10,000.00

$20,000.00

$30,000.00

$40,000.00

$50,000.00

$60,000.00

$70,000.00

$80,000.00

$90,000.00

$100,000.00

Trend Analysis for Trucks Repair/Transit Costs

Repair/Transit Costs

Estimated Repair/Transit Costs

Year

Repa

ir Co

sts

Level 4 – Example 2 (cont’d)

2008 2009 2010 2011 2012 2013 2014 2015 2016 $-

$10,000.00

$20,000.00

$30,000.00

$40,000.00

$50,000.00

$60,000.00

$70,000.00

$80,000.00

$90,000.00

$100,000.00

Trend Analysis for Trucks Repair/Transit Costs vs. Repair Costs

Repair/Transit Costs

Estimated Repair/Transit Costs

Actual Repair Costs

Estimated Repair Costs

Year

Repa

ir Co

sts

Level 4 Examples (cont’d)

Supervisor Training on Handling Staff Issues

Any supervisor worth his salt would rather deal with people who attempt too much than with those who

try too little. - Lee Iacocca

Level 4 – Example 3

Manage

r 1

Manage

r 2

Manage

r 3

Manage

r 4

Manage

r 5

Manage

r 6

Manage

r 7

Manage

r 8

Manage

r 9

Manage

r 10

Manage

r 11

Manage

r 12

Averag

e0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Pre-Training Daily Manager Time Allocation

Time Spent Daily on Person-nel/Personality Issues - Pre-Training

Time Spent Daily on Core Business Tasks/Operations - Pre-Training

Managers

Perc

ent o

f Day

Spe

nt o

n Ac

tivity

Level 4 – Example 3 (cont’d)

Manage

r 1

Manage

r 2

Manage

r 3

Manage

r 4

Manage

r 5

Manage

r 6

Manage

r 7

Manage

r 8

Manage

r 9

Manage

r 10

Manage

r 11

Manage

r 12

Averag

e0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Post Training Daily Manager Time Allocation

Time Spent Daily on Personnel/Personality Issues - Post-Training

Time Spent Daily on Core Business Tasks/Operations - Post-Training

Managers

Perc

ent o

f Day

Spe

nt o

n Ac

tivity

Level 4 – Example 3 (cont’d)

Pre-Training Post Training0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Average of Daily Manager Time Allocation Pre vs. Post Training

Time Spent Daily on Personnel/Personality Issues Time Spent Daily on Core Business Tasks/Operations

Kirkpatrick – Level 4

So the training was customized to and impacted business process and performance measures.

The training saved the agency money. Was the savings more than the cost of the training?

Kirkpatrick – Level 5

Mathematical calculation:

Savings to the Agency ÷ Cost to Provide Training =Return on Investment (ROI)

Anything over 1.0 is a positive ROIAnything lower than 1.0 is a negative ROI

Level 4 Examples with ROI Applied

Level 5 – Example 1

Timekeeper training:

$4,707,811.68 / $41,978 = $112.15

Or a 112 to 1 ROI

Level 5 – Example 2

Mechanics Training:

$3,026,276 / $117,553 = $25.74

Or a 26 to 1 ROI

Level 5 – Example 3

Manager Training:

$216,682.50 / $3,500 = $61.91

Or a 62 to 1 ROI

Difference in ROI Calculations from DOT to LTAP

• DOT costs to provide training (development, travel, etc.) are all paid for by the DOT, so all costs go into the ROI determination of “how much did it cost”

• For LTAP Centers, local agencies would only count the registration fee and the travel to/from the training in their “how much did it cost”

So how can we apply ROI calculations to our LTAP Training?

Need to collect the pieces of the puzzle:

Pay Range for Participant

Amount of Time

Participants Spends on This Type of Work

Before and After

Knowledge Assessment

Before and After Assessment

Each increase in knowledge / skill level from before to after is calculated at 10% for formula purposes.

Time Spent on Type of Work

“During the next 12 months, I anticipate that approximately _______ percent of my total work

time/effort will relate to the topics/items discussed in this training session.”

Pay Range & Hours Worked Calculations

• Determined by:

– Pay range information publically available

– Question on whether they work full or part-time, and if part-time – how many hours per week

Calculating the ROI

• Assessment– Skills before at a 5– Skills after at a 6– 10% increase in knowledge base

• Time spent on work– Works Full-time – Spends 30% of time on this topic during the work

week

Calculating the ROI (cont’d)

• Hourly rate– $11.00 per hour average for this pay range– Include 33% fringe and benefits

• Calculation:– 10% less time of the 30% spent on the topic

• 12 hours (30% of work week) x 10% less time = 1.2 hours of efficiency per week

– $11 + $3.63 = $14.63 fully loaded payroll cost• 1.2 hours x $14.63 = $17.56 payroll dollars saved in one week

Calculating the ROI (cont’d)

• $17.56 x 52 weeks = $913.12 saved per year

• Cost of training - $105 (impact costs)– $50 attendance fee– Cost of Vehicle to and from the training $55.00

(100 miles roundtrip at .55 per mile)

• $913.12 / $105 = 8.7 Return on Investment

Where are we now?

• Need to have the ROI methodology (formula) validated.

The BIG Questions

They can tell us they improved their skills and are applying them (and their supervisors can confirm they are applying them), but how do we know that the application of the skills is REALLY saving the agency money? How do we measure the reduction in time to complete the work that we have hypothesized equals 10% time savings for each point of knowledge improvement?

Use DOT Data to Verify

• Training in a lot of cases is on same subjects – just a different focus for the locals

• Use the DOT time tracking data – the famous Ohio 502s and our TMS system

• Every hour of every day is coded to a work type in TMS

Using DOT Data to Verify (cont’d)

• All training has also been tracked, with extensive training that has occurred for the last ten years

• Proving/Disproving of methodology will then allow us to know whether or not it can be applied to the LTAP training data to reach ROI for the locals

RFP Issued for Research

• Issued twice – one proposal rejected first time, no proposals the second time

• Options –– Hire intern(s) to crunch the data– Look to Research’s task order consultant to

perform the analysis to prove/disprove methodology

ROI Methodology Must Be Established

Data driven information MUST be the foundation for proving the worth of our

programs

Questions