The AM & IMI People Conference 2014 was co-sponsored by:
Dr Paul Spear, return on investment manager at the Institute of the Motor Industry, said it is possible to achieve a high return on investment (ROI) from targeted training, but non-targeted training that’s merely a box-ticking exercise will not give good results.
“Skills development is a proven route towards improving efficiency and productivity,” he said. “It’s about thinking way into the future and developing individuals.”
The IMI’s research shows training can really make a difference and it has created an ROI calculator hosted on its website at theimi.org.uk/roi.
About 68-70% of businesses believe training had no impact on profitability, said Spear. However, the problem is if you don’t measure it you can’t see it.
'Skills development is a proven route towards improving efficiency and productivity' - Dr Paul Spear, IMI
– Click quote to tweet
“Average retail margins in motor retail are very thin, around 3%, and to invest in training there needs to be a high degree of certainty that you’ll get some kind of return, so an ROI approach at the start is a good one.”
The ROI research looked into apprenticeships and leadership development. For leadership development, the IMI looked at two managers from Scottish franchised dealer John Clark Motor Group, who undertook an AMA (automotive management accreditation) assessment. From their project-based management training, designed to fill an identified knowledge gap, they achieved an ROI of 184% and 212%.
Separately, the IMI looked at a BMW manager who was struggling with CSI, and it found a link between his team performance with increased CSI and a reduction in the variance of CSI spread month-on-month.
In another case, a Mercedes-Benz Commercial Vehicles service team manager transformed the business through a management accreditation and achieved 100% ROI on her training.
He surveyed 13 graduates of Loughborough University’s BSc degree in automotive management. All benefitted significantly, and most got their next position as a result.
One aspect is key, he said: “As well as the individual focusing on their development it’s really critical that the senior management focus on that individual for the long term, because if you lose them that’s a lot of cost to the business. Identify these people carefully and carry them through the journey after the BSc programme.”
From studying results of 30 apprentices in several companies over two years, the study demonstrated that an apprentice can deliver an ROI of 150-300% net of employer costs. After 18-24 months, apprentices will have covered their costs, and as their skills and knowledge increase, their productivity rises.
“We now understand how the progress of productivity maps through three and four years of an apprenticeship,” said Spear.