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This chapter summarises and updates the report 'Analysing enterprise returns on training investment' (TD/TNC 64.08). It focuses on what the literature has to say about measuring enterprise returns from training. This information is then used to identify key issues that need to be addressed to encourage increased evaluation of training benefits by enterprises. Methodological approaches suited to enterprise needs for practical and cost-effective evaluation practices are also identified, including a taxonomy of over 50 possible training outcome indicators.

In this chapter a cost-effective training evaluation model is developed. The model consists of four sequential steps, commencing with collecting data, pre- and post-training exploration of performance, linking performance outcomes to training and, finally, the calculations of return on investment (ROI). The model has been designed to suit a wide variety of organisations and training programs. The model is applied to two leading Australian organisations.

This chapter reports an attempt to replicate significant overseas survey results on the productivity and profitability payoffs to enterprise training using information collected on more than 90 firms in Australia. The research team also undertook three in-depth case studies. The results suggest that: Australian firms provide more training to their incoming employees than their United States (US) counterparts; there exists a positive association in Australia between a firm's profitability and the quantity and quality of training offered by the firm; and there is a positive correlation between training and other forms of investment by Australian firms. The results overall are suggestive of a positive impact of Australian firms' investments in training and their own productivity and profitability.

Evaluating the returns to training at an enterprise level requires analysing the multi-layered and interconnecting set of relationships and decision-making processes involved in being in business. Training is not conducted in a vacuum, and the need for it, its design and conduct and its outcomes depend on the nature of the enterprise's skills requirements, work organisation, job design, employment practices and its product, production and investment strategies etc. This chapter reports on the findings of a project that sought to investigate these inter-relationships and the impact they had on the efficacy in a number of manufacturing and service industry enterprises located throughout Australia. The methodology was developed out of the research program conducted in the United Kingdom (UK) by Sigmund Prais and colleagues over a number of years. This called for a detailed comparative approach between enterprises of similar size and producing similar goods or services. What the study found was that there was no single set of 'proven winner' or 'best practice' relationships between training effort and the host of other factors impacting upon enterprise performance. Indeed, it found that these relationships are contingent upon the idiosyncratic characteristics of each enterprise.