The second half of cost-benefit analysis is identifying and measuring the beneficial results from a training program. Benefits come in two types. Tangible benefits are those that can be measured and assigned some kind of number or dollar value. Intangible benefits are benefits that can not be measured or even quantified.

Tangible Benefits

Tangible benefits are ones that can be measured and ideally quantified in dollars. For example:

• A sales training program increased sales by 2 percent.
• A customer service program increased customer satisfaction survey results by 10 percent.
• A safety training program reduced the number of accidents over one year by 30 percent.
• A quality control program reduced defects by 20 percent.
• A software training program reduced calls to the help desk by 30 percent.
• A communication training program increased the ratings of managers by their direct reports by 10 percent.

These examples all show very real, measurable, tangible results. To get valuable return on investment information, however, these results must be turned into dollar values.

Before translating results into dollars, though, make sure that you are studying an isolated, control group. Similar to how scientists conduct experiments, the goal is to minimize the number of other variables that might be contributing to the results. Without an isolated control group, your peers will challenge your findings. Consider these retorts to various training claims:

• "How do you know the sales training caused sales to go up in the third quarter? Maybe it was the new incentive plan we rolled out in September."
• "Maybe it wasn't the safety training that reduced accidents at that plant location. Perhaps the layoffs resulted in fewer total workers to have accidents."
• "I understand you think the software training reduced calls to the help desk. But maybe the new operating system itself is easier to use."
• "You said direct reports scored their managers higher because of the management training. I think everyone is just happier because of the profit-sharing results."

The easiest way to isolate a control group is to roll out new training programs in phases. Although this is not always practical, it will enable you to measure results with the newly trained group, versus the untrained group. Some examples of how this could be done follow.

To create a control group for sales training, identify two regions that have historically produced consistent and similar revenue results. Distribute the new sales training program to one region, and then measure growth in sales over the following three-month period. If the trained region has a significantly higher sales growth rate than the untrained group, it is likely that the training can be credited with the increase. Make sure, however, that there were no other significant differences between the regions, such as the roll out of new technology to one group, a change in senior management, or other factors explainable by geographic differences.

When conducting quality control training, first analyze error rates over the previous year at different factories, or, if there is only one factory, look at error rates among different shifts. Then to create a control group, pick one factory or one shift of workers to complete the training. Measure the increase or decrease in product defects over the next three or four months. If there is a decrease with the trained group and no change with the control group, the training likely had an impact. Follow-up investigation should ensure that no other factors in the time period could have caused the difference.

Once you have isolated and validated the measurable results of your training program, it is time to quantify it in dollar terms. Sometimes this is straightforward, other times it requires some additional industry benchmarking. Some examples of quantifying training results:

• Sales training. If a sales training program increased revenue generated in the control group by 2 percent, this increase can be applied to the entire sales force's revenues. For example, if in the previous time period sales totaled $500 million, a 2 percent increase would be worth $10 million.
• Interviewing skills. A training program on recruiting is shown in the control group to reduce turnover from 20 to 15 percent due to interviewers ability to find a better match between company and contact -- a 25 percent improvement. This reduction can be applied to the total anticipated turnover rate. If in the previous year 1,000 people left the company, after training that number should drop to 750, a net savings of 250 employees retained. Additional research into HR issues might uncover that it costs on average $18,000 to hire and train each new employee. Total cost savings can then be projected to be 250 employees x $18,000 = $450,000.

Intangible Benefits

These types of benefits are the ones that are usually assumed to result from a training program, but are difficult or impossible to measure. Although specific dollar values can not be attached to intangible benefits, they are still important to discuss and to document. Examples of intangible benefits from specific training programs might include:

• An increase in morale and employee engagement resulting from new hire orientation training.
• Improvements in teamwork resulting from diversity training.
• Additional sensitivity and a more professional workplace resulting from sexual harassment training.
• Less stress among students who complete conflict management training.
• Less anxiety after completing a change management program.