Calculating the Economic Viability of Corporate Trainings (Traditional & eLearning) using Benefit-Cost Ratio (BCR) and Return On Investment (ROI)

Abstract

The intent of this paper is fourfold: (a) to document chronologically the history of corporate training; (b) to discuss the importance of corporate training highlighting the reasons why eLearning is gaining traction; (c) to report the results of a research study conducted with 85 sales employees in a U.S.-based organization; and (d) to calculate the return on investment (ROI) for the training costs incurred by the company and validate if the training was economically viable. Forty-two employees received the Traditional mode of training and the remaining 43 received the eLearning mode. The researcher made several comparisons. First, pre-training test scores were compared to post-training test scores to determine differences between training modes (Traditional or eLearning). Second, post-training test scores of Traditional vs. eLearning mode were compared to determine differences between the modes of training. Third, pre-training sales numbers were compared to post-training sales numbers to determine differences between training modes (Traditional or eLearning). Finally, post-training sales numbers of Traditional vs. eLearning mode were compared to determine differences between training modes. Previous researchers have compared pre- and posttest scores. Some have documented the cost-benefit analysis of training programs and described the ROI percentage achieved from training. However, previous researchers have not detailed the exact dollar value of the benefits achieved from training programs, discussed actual sales numbers, or discussed actual revenue data to show how these were used for tangible ROI in dollar value. To the author’s knowledge, this will be the first peer-reviewed study to document, describe, and calculate the aforementioned details.