Measuring the ROI of Soft Skills Training: How To Assess Business Impact

Measuring the ROI of soft skills training often feels like quantifying the intangible. Unlike hard skills, the effects of soft skills such as leadership, communication, and emotional intelligence may not be immediately visible. Yet, in a B2B environment, these skills are critical for fostering strong client relationships, enhancing team collaboration, and driving sustained business growth. 

So, how do you prove their worth? The key is knowing where to look and how to connect the dots to business outcomes.

A study by the Society for Human Resource Management (SHRM) indicates that organizations investing in employee training programs experience profit margins that are 24% higher than those that do not prioritize training. This underscores the significant impact of employee development on overall business performance​.

In this blog, we’ll walk you through a simple, practical approach to measuring the ROI of soft skills training. By the end, you’ll have a clear picture to confidently measure and present how these programs impact your organization in a meaningful way. So let’s get started. 

Step 1: Identify and Calculate Your Training Costs

Accurately measuring ROI starts with fully understanding the direct and indirect costs of the soft skills training program.

1. Direct costs include:
   • Training materials (if needed)
   • Software or e-learning platform costs
   • Venue rentals (if applicable)
2. Indirect costs encompass:
   • Lost productivity during training hours
   • Administrative overhead
   • Temporary staffing or overtime for roles covered during training sessions

For example, let’s say your organization implements a communication skills training program for 40 employees, with a total cost breakdown like this:

Direct Cost = $35,000
Indirect Costs = $15,000

Total Costs =  $35,000 (direct) + $15,000 (indirect) = $50,000

By capturing both direct and indirect costs, you’ll have a complete view of the investment required.

Step 2: Define Measurable Outcomes

To calculate ROI, it’s crucial to link the training program to specific and measurable business outcomes. For soft skills, these outcomes may be less immediately quantifiable but still have a significant financial impact.

Here’s how you can quantify key outcomes of soft skills training:

• Employee Engagement: Evaluate the potential productivity gains and cost savings. Gallup’s latest State of the American Workplace study shows that engaged employees are 21% more productive and have lower absenteeism rates. 

• Reduced Turnover: Calculate the cost savings from lower employee turnover rates. According to the Society for Human Resources Management (SHRM) on average, replacing an employee can cost 33% of their annual salary.

• Increased Productivity: Estimate the financial benefits of improved collaboration and leadership, translating to higher output or faster project delivery times.

Let’s use an example. Suppose you anticipate the following benefits from a communication training program:

1. 15% increase in productivity across a team of 40 employees, where each employee generates $120,000 in annual revenue.
2. 7% reduction in turnover (7% of 40 employees = 3 employees), resulting in fewer recruiting and onboarding costs, typically $55,000 per replacement.
3. 12% improvement in employee engagement, leading to fewer absences and improved morale.

Quantifying these benefits:

1. Productivity increase:
   Increased Revenue = 40 employees × 120,000 × 0.15 = 720,000
2. Turnover reduction savings:
   Turnover Savings = 3 replacements avoided × 55,000 = 165,000
3. Employee engagement improvements (fewer absences):
   Assume each engaged employee leads to an additional $2500 in savings per year due to reduced absenteeism:
   Engagement Savings = 40 × 2500 = 100,000

Now, sum these benefits:

Total Benefits = 720,000 (productivity) + 165,000 (turnover) + 100,000 (engagement) = $985,000

Step 3: Use the ROI Formula to Measure the Impact

Now that you have the total costs and benefits, it’s time to apply the standard ROI formula to measure the financial return of your soft skills training investment.

ROI =   Total Benefits – Total Costs   ×   100
     Total Cost

Using the example data:

                       ROI =    985,000 − 50,000   ×   100   =   1870%
      50,000

This means that for every $1 invested in the training program, the organization received a $18.70 return—a substantial ROI that proves the training’s value.

Step 4: Leverage the Kirkpatrick Model for Deeper Insights

In addition to financial ROI, it’s essential to measure qualitative outcomes that enhance business success. The  Kirkpatrick Model, a well-known training evaluation framework, offers a comprehensive way to measure soft skills training effectiveness:

1. Reaction: Did participants find the training engaging and relevant?
   • Use surveys to gather feedback on the program’s value and delivery.
2. Learning: Did participants gain the intended knowledge or skills?
   • Test participants before and after training to assess improvement.
3. Behavior: Are participants applying the skills in their work?
   • Observe behavior changes on the job or gather manager feedback.
4. Results: How has the training impacted key performance indicators such as productivity, engagement, or turnover?
   • Use these data points in your ROI calculation.

This multi-level approach provides insights into not only the immediate impact but also the long-term behavioral and organizational improvements resulting from the training.

Step 5: Present ROI in a Business-Centric Manner

Understanding and keeping ROI calculations for soft skills training is vital for leaders and managers. These insights not only provide a clear picture of training effectiveness but also allow for comparisons with future training data points, enabling you to identify trends and areas for improvement.

Moreover, showcasing the ROI throughout the organization can serve as a powerful motivator for employees. When teams see the tangible benefits of skill development reflected in the ROI, they are more likely to engage in training programs, recognizing their value in personal and professional growth.

For those moments when you need to communicate these findings to stakeholders, using visuals like charts and graphs can amplify your message. This approach makes the data more accessible and compelling, ensuring the value of training investments resonates with your audience. Decision-makers are more likely to support continued training investment when they see clear links to:

• Financial growth (e.g., increased productivity or revenue)
• Cost savings (e.g., lower turnover or absenteeism)
• Operational efficiency (e.g., faster project completion, improved teamwork)

Highlighting these results not only reinforces the commitment to employee development but also cultivates a culture of continuous improvement within the organization.

For large organizations, especially those with distributed teams, our user-friendly online training platform ensures that employee development initiatives can reach every corner of the business efficiently. When entire departments are engaged, the impact is not only individual but transformative for the organization.

Lastly,

By following these steps—capturing both direct and indirect costs, setting measurable outcomes, applying ROI formulas, and using the Kirkpatrick Model—you can confidently demonstrate the value of soft skills training to your organization. With clear metrics in hand, you’ll not only justify the investment but also secure continued support for developing the soft skills that drive business success.