Best Practices to Help You Define the Return on Investment for Skilling within Public Sector Organizations (Part 2)

Microsoft’s Public Sector Center for Digital Skills recently collaborated with the ROI Institute and used their methodology to conduct a comprehensive evaluation study to assess the return on investment (ROI) of one of Microsoft’s customer’s skilling programs, revealing an ROI of 43%. This customer, who manages a shared services organization, is recognized for its innovative and digitally transformative approach to public servants’ training.   

In part one of this series, we highlighted the importance of defining the return on investment for skilling within public sector organizations. Now, let’s explore best practices to consider when you conduct your own ROI evaluation of one of your public sector skilling programs.  

About the ROI Institute’s ROI Methodology

The ROI Institute’s ROI Methodology outlines a process that links programs, strategies and initiatives to bottom-line measures. The ROI methodology balances financial outcomes with metrics that consider individual perspectives, along with the systems and processes that facilitate learning transfer.  

The four phases of an ROI evaluation

According to the ROI Institute, the four phases of an evaluation are:

1. Planning the Evaluation
   1. Start with why: Align programs with the business.
   2. Make it feasible: Select the right solution.
   3. Expect success: Plan for results.

2. Collecting Data
   1. Make it matter: Design for input, reaction and learning.
   2. Make it stick: Design for application and impact.

3. Analyzing Data: Make it credible
   1. Isolate the effects of the program.
   2. Capture costs of the program.
   3. Convert data to monetary value.
   4. Calculate return on investment.
   5. Identify intangible measures.

3. Optimizing Results
   1. Tell the story: Communicate results to key stakeholders.
   2. Optimize results: Use black box thinking by looking at what went wrong and improve or prevent resulting in opportunity for stronger programs and further funding.
      (Reference: Syed, M. (2016). Black Box Thinking: Why Most People Never Learn from Their Mistakes–But Some Do United States Penguin Publishing Group.)

Shift from activity-based metrics to results-based approaches

The ROI Institute recommends public sector organizations adopt a results-based approach which can help demonstrate the value of your skilling program. This strategy also offers insights into their effectiveness and enables you to make data-driven decisions for enhanced impact.  

Shifting from activity-based metrics to a results-based approach ensures that skilling programs run smoothly, deliver real benefits and foster a culture of continuous improvement and accountability.  

To help you shift to a result-based approach follow these best practices from the ROI Institute:  

• Align with Business Goals: Focus on results to link skilling programs directly to business priorities and strategic goals. 
• Measure Effectiveness: Assess performance to ensure participants gain and apply useful skills and knowledge. 
• Set Clear Objectives: Identify objectives for job application and business impact, providing a roadmap for success. 
• Communicate Expectations: Clearly communicate results expectations to stakeholders and participants for better engagement and accountability. 
• Support Skill Utilization: Prepare the work environment to support the application of new skills, leading to improvements and innovations. 
• Build Partnerships: Gain support from key stakeholders and managers to align program outcomes with their needs. 
• Benefit-Cost Analysis: Measure results, including benefit-cost analysis, to understand the program’s financial impact and justify investments. 
• Outcome-focused Planning and Reporting: Focus on outcomes to ensure planning and reporting are centered around actual benefits and changes. 

Use these strategies to enhance the success of your skilling programs 

By measuring and communicating ROI, organizations not only justify existing programs but also secure support for future initiatives. The strategies outlined in this article can enhance the success of your skilling program, fostering confidence among stakeholders and ensuring the efficient allocation of resources. 

We invite you to read the final article in our three-part series, titled Return on Investment Results (Part 3), where the ROI Institute used their methodology to conduct a comprehensive evaluation study with one of our government customers. This case study summarizes the evaluation results, including ROI, their procurement program and showcases the practical application of these principles. 

And in case you missed it, read part one of our series, The Importance of Defining the Return on Investment for Skilling within Public Sector Organizations (Part 1).

References 

Jack J. Phillips, and Patti P. Phillips, Handbook of Training Evaluation and Measurement Methods, 4th edition. New York, NY: Routledge (2016). 

Patricia Pulliam Phillips, Jack J. Phillips, Gina Paone, and Cyndi Huff Gaudet, Value for Money: How to Show the Value for Money for All Types of Projects and Programs. Beverly, MA: Scrivener Publishing (2019).