The Unbelievable $300 Training that Gives $1.7 million profit in a year

everyone knows training pays, but is the return really infinite? I design this '4-Ways Training Leverage Chart' to illustrate how training pays:

(the highlighted lines are the areas that training works on)

No. of hours work

        x

Output per hour

        =

Output

        x

Quality of output

        x

Value Add

       =

Employee Value

Now let's put in some numbers:

No. of hours work is 40

x Output per hour is 100

giving me output of 4,000 units

If the quality of each output is 80% and the value add is $10, the employee value is simply 4,000 x 80% x $10 = $32,000

Suppossing the training increases this employee's productivity by 10%, all the highlighted numbers above will increase by 10%:

No. of hours work              44

x                                         x

Output per hour                110

=                                        =

Output                             4,840

x                                         x

Quality of output               88%

x                                         x  

Value add                         $11

=                                        =

Employee value               $46,851

As can be seen, there is a 46% increase in employee value if the training merely increases each area by 10%

What happens if the training increases each area by 20%?  The result will be:

No. of hours work              48

x                                          x

Output per hour               120

=                                         =

Output                            5,760

x                                          x

Quality of output             96%

x                                          x

Value add                         $12

=                                         =

Employee value            $66,355

There is an increase of employee value by 107%, i.e. more than double. Note that the Employee Value increases by $34,355. If your training costs you $300, your Return on Training is $34,355/$300, giving you 114%. Isn't this return huge? 

But bear in mind that we are only talking about a week. If there are 49 weeks in a year, your return in a year is $34,355 x 49 = $1,6833,395.  Your Return on Investment is $1,683,395/$300, giving you 561,113%. Isn't this return close to infinite? 

Written by Andy Ng, Chief Trainer Coach at www.asiatrainers.com.  Andy specialises in success-basis traning in the areas of sales, customer servie and leadeship. Contact him at 65-8201 4347 or email to andy@asiacoachingtraining.com now!