{"id":103,"date":"2026-09-26T20:16:34","date_gmt":"2026-09-26T20:16:34","guid":{"rendered":"http:\/\/localhost:8080\/smallhrtools\/blog\/?p=70"},"modified":"2026-09-26T20:16:34","modified_gmt":"2026-09-26T20:16:34","slug":"training-roi-phillips-model-practical","status":"publish","type":"post","link":"https:\/\/smallhrtools.com\/blog\/training-roi-phillips-model-practical\/","title":{"rendered":"Training ROI: The Phillips Model Made Practical for Small Business"},"content":{"rendered":"\n

Short answer:<\/strong> training ROI is (net benefit \u00f7 total cost) \u00d7 100<\/strong> – but the number is only as defensible as its two inputs. The Phillips methodology adds the discipline: count all<\/em> the costs (participant wages during training are usually the biggest, most-forgotten line), monetize only benefits you can trace to a metric, and then discount for attribution<\/strong> – the honest admission that training wasn’t the only thing driving the improvement. Done that way, a “70% ROI” survives a CFO’s questions. Done sloppily, a “300% ROI” gets your next training budget cut, because nobody believes it.<\/p>\n\n\n\n

The five levels, in one table<\/h2>\n\n\n\n

Donald Kirkpatrick’s four evaluation levels have been the L&D standard since 1959; Jack Phillips added the fifth:<\/p>\n\n\n\n

Level<\/th>Question<\/th>Evidence<\/th><\/tr><\/thead>
1. Reaction<\/td>Did they like it?<\/td>Post-course survey<\/td><\/tr>
2. Learning<\/td>Did they learn it?<\/td>Test \/ demonstration<\/td><\/tr>
3. Behavior<\/td>Are they doing it at work?<\/td>Observation, 30-90 days later<\/td><\/tr>
4. Results<\/td>Did a business metric move?<\/td>Error rate, output, retention, sales<\/td><\/tr>
5. ROI (Phillips)<\/td>Was the metric movement worth the cost?<\/td>Monetized Level 4 vs full cost<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The practical insight for a small business: most training evaluation stops at Level 1<\/strong>, and happy-sheet scores have close to zero correlation with business impact. You don’t need a measurement department to reach Level 5 – you need one metric chosen before<\/em> the training, and the arithmetic below.<\/p>\n\n\n\n

Step 1 – Count the full cost<\/h2>\n\n\n\n

Direct costs are the easy half. The complete inventory:<\/p>\n\n\n\n

Cost<\/th>Example (12-person customer-support training)<\/th><\/tr><\/thead>
Trainer \/ course fees<\/td>\u20b91,20,000<\/td><\/tr>
Materials, platform, certification fees<\/td>\u20b925,000<\/td><\/tr>
Venue \/ travel (if any)<\/td>\u20b915,000<\/td><\/tr>
Participant wages during training<\/strong> – 12 people \u00d7 24 hours \u00d7 \u20b9450\/hr loaded<\/td>\u20b91,29,600 (round \u20b91,30,000)<\/strong><\/td><\/tr>
Coordination and admin time<\/td>\u20b920,000<\/td><\/tr>
Total cost<\/strong><\/td>\u20b93,10,000<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Note the shape: wages-during-training are ~42% of the total, and they never appear on an invoice. Leaving them out understates cost by nearly half and produces the inflated ROI numbers that destroy credibility. (The Training Budget Calculator<\/a> itemises these lines; the Learning Hours Calculator<\/a> checks whether the hours are even available.)<\/p>\n\n\n\n

Step 2 – Monetize the benefit (conservatively)<\/h2>\n\n\n\n

Pick the Level 4 metric before<\/em> training, measure it 90 days after. Standard monetizations:<\/p>\n\n\n\n