TECHNICAL ISO/TS

SPECIFICATION 30428

First edition
2021-05

Human resource management -

Skills and capabilities metrics cluster

Management des ressources humaines - Indicateurs de mesure pour

Jes competences et aptitudes

Reference number
ISO/TS 30428:2021(E)

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Contents Page

Foreword ........................................................................................................................................................................................................................................ iv

lntroduction..................................................................................................................................................................................................................................v

1 Scope .. .. .. . .... .... . .

..... ............ ..... .. ..
.... .
..... ..... .. . . . . .
........... ...... ..... ...................................... ........... ......................... .. .
.......... ......................... .. ........................ 1

2 Normative references ....... .... .......... ... .......... ... .......... ............ ............. ............. ............ ...
.......... ............. ............. ................ ......... ....
......... ...
..... 1

3 Terms and definitions ..................................................................................................................................................................................... 1

4 Total development and training cost............................................................................................................................................... 2

4.1 General 2
...........................................................................................................................................................................................................

4.2 Description .. .. . . ..
........... .. ..
........... ........... . .
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........... . .. .. .. ..
........... ............ ............ ............ ........... .. 2 ........... ........... .......... ........... ...........

4.3 Purpose.. ... . ..

.......... . .. . . ..
........... ............ ... . ..
......... . . .
... ..... .. .
....... . ..
........... .. .. .. . .. . ..
....... ... ......... ........... .. . . 2
........... .......... ......... . ........ .. ........ .. .......

4.4 Formula 3
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4.4.1 General. . .. .. . ..
.... ........... ..
........... .. ..
..... ..... ..
........... ..
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........... .. .
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.......... ............3 ........... ........... ............ ............ .........

4.4.2 Case study 1 ......................................................................................................................................................................... 3

4.4.3 Case study 2 ........................................................................................................................................................................ 4
4.4.4 Case study 3 ........................................................................................................................................................................ 4
4.5 Use 5
.....................................................................................................................................................................................................................

4.5.1 General...................................................................................................................................................................................... 5
4.5.2 Internal users...................................................................................................................................................................... 5
4.5.3 External users ..................................................................................................................................................................... 9
4.5.4 Academic users ................................................................................................................................................................. 9
5 Percentage of employees who participate in training .. .... .. .... .. .... .. ... . .. .... ... .... ... .... ... ..... .. ...
... ......... .... .. ...
.... ... .. ... 9
..... ... .

5.1 General ........................................................................................................................................................................................................... 9

5.2 Description 9
.................................................................................................................................................................................................

5.3 Purpose ..
.......... ..
........... .. ............ ..
........... .
........... . . . .. ..
........... ............ ............ ............ ............. . ..
........... ..
........... 10 ........... ........... ........... ........

5.4 Formula ...................................................................................................................................................................................................... 10

5.5 Use .................................................................................................................................................................................................................. 11
6 Average formalized training hours per employee ... .......... .. .......... ... .......... ... .......... ... .......... ............ ...
.......... ............. ... 12
.

6.1 General 12
........................................................................................................................................................................................................

6.2 Description ..............................................................................................................................................................................................12

6.3 Purpose ....................................................................................................................................................................................................... 13
6.4 Formula ...................................................................................................................................................................................................... 13
6.5 Use .................................................................................................................................................................................................................. 13
7 Percentage of employees who participate in formalized training by category ................................ 14
7.1 General ........................................................................................................................................................................................................14
7.2 Description 15
..............................................................................................................................................................................................

7.3 Purpose .......................................................................................................................................................................................................15

7.4 Formula ......................................................................................................................................................................................................15
7.5 Use .. .......... ........... .. .. .
.................................... ........... . .. .
..... ............................... ..................................... .. . . 16
........... ........................ ........... ...... ..

8 Workforce competency rate ..... ... .......... ... .......... ............ ............. ............. ... .......... ..
.......... ............. ............. ............. ...
......... ....
......... .... 1 7
.

8.1 General 17
........................................................................................................................................................................................................

8.2 Description . . . . . . . . . 17
. ............ ........................ ............ ............ ............................................................... ............ ............ ........................ .........

8.3 Purpose .......................................................................................................................................................................................................18

8.4 Formula 18
......................................................................................................................................................................................................

8.5 Use .................................................................................................................................................................................................................. 20

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Foreword

ISO (the International Organization for Standardization) is a worldwide federation of national standards
bodies ( ISO member bodies). The work of preparing International Standards is normally carried out
through ISO technical committees. Each member body interested in a subject for which a technical
committee has been established has the right to be represented on that committee. International
organizations, governmental and non-governmental, in liaison with ISO, also take part in the work.
ISO collaborates closely with the International Electrotechnical Commission ( IEC) on all matters of
electrotechnical standardization.

The procedures used to develop this document and those intended for its further maintenance are
described in the ISO/IEC Directives, Part 1. In particular, the different approval criteria needed for the
different types of ISO documents should be noted. This document was drafted in accordance with the
editorial rules of the ISO/IEC Directives, Part 2 (see www.iso.org/directives).

Attention is drawn to the possibility that some of the elements of this document may be the subject of
patent rights. ISO shall not be held responsible for identifying any or all such patent rights. Details of
any patent rights identified during the development of the document will be in the Introduction and/or
on the ISO list of patent declarations received (see www.iso.org/patents).

Any trade name used in this document is information given for the convenience of users and does not
constitute an endorsement.

For an explanation of the voluntary nature of standards, the meaning of ISO specific terms and
expressions related to conformity assessment, as well as information about ISO's adherence to the
World Trade Organization (WTO) principles in the Technical Barriers to Trade (TBT), see www.iso.org/
iso/foreword.html.

This document was prepared by Technical Committee ISO/TC 260, Human resource management.

Any feedback or questions on this document should be directed to the user's national standards body. A
complete listing of these bodies can be found at www.iso.org/members.html.

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Introduction

ISO 30414 highlights guidelines on the following core human capital reporting ( HCR) clusters or areas:

compliance and ethics;

costs;

diversity;

leadership;

organizational culture;

organizational health, safety and well-being;

productivity;

recruitment, mobility and turnover;

skills and capabilities;

succession planning;

workforce availability.

This document deals specifically with the cluster of metrics in the skills and capabilities area of
ISO 30414. Future documents will address other learning and development metrics, including measures
for informal or unstructured learning.

Organizations invest significant sums to increase the skills and capabilities of their employees. The
expectation is that this investment will help the organization accomplish its mission, achieve its goals
and address its critical needs at lower cost or in less time. Research has shown that organizations which
invest more in their employees tend to perform better. Furthermore, investing in employee skills and
capabilities is often critical to attracting and retaining the most desirable employees. Finally, in many
organizations, investing in the skills and capabilities of employees leads to higher employee engagement,
which is associated with higher motivation and productivity in addition to higher retention.

For all these reasons, investors, analysts and employees will benefit from greater transparency about
the investment in skills and capabilities. Investors and analysts can value an organization more highly
if it invests in its employees. Existing employees can find greater opportunities to grow and develop
if the organization invests more heavily in their skills and capabilities. And job seekers can be more
attracted to an organization that invests in its people.

Given the significant investment organizations make in their human capital, it is important to be able
to accurately and consistently measure the cost of this investment. It is also important to understand
how many employees participate in formal training, how much training they receive and what type
of training is provided. Senior leaders, as well as learning and development professionals, will also be
interested in the competency levels of the workforce, both as a guide to the need for training and as
a reflection of the impact of the investment in skills and capabilities. In other words, investment in
human capital should produce a more competent workforce which in turn will help the organization
succeed.

The metrics within the skills and capabilities cluster as documented in ISO 30414 are as follows:

a) Total development and training cost: this metric is defined as the sum of all spending on training
and development within an organization.

b) Percentage of employees who participate in training compared with total number of employees
per year: this metric is defined as the number of employees who participate in at least one formal
training experience divided by the total number of employees.

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c) Average formalized training hours per employee: this metric is defined as total formal training
hours for all employees divided by the number of full-time equivalent (FTE ) employees.

d) Percentage of employees who participate in formalized training in different categories: this metric
is defined as the number of employees who participate in at least one formal training experience
divided by the total number of employees shown by category (e.g. leadership).

e) Workforce competency rate: this metric is defined as the average competency ratings assigned to
employees.

This document describes the following components for each of the above metrics:

general;

description;

purpose;

formula;

how to use.

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Human resource management - Skills and capabilities

metrics cluster

1 Scope

This document describes and defines the five metrics of skills and capabilities. This document also
provides the formula for each metric and describes the common metrics which employ the five metrics.

This document also highlights issues that need to be considered when interpreting the skills and
capabilities data, especially when deciding on the appropriate intervention internally and when
reporting these to external stakeholders (e.g. regulators, investors).

2 Normative references

The following documents are referred to in the text in such a way that some or all of their content
constitutes requirements of this document. For dated references, only the edition cited applies. For
undated references, the latest edition of the referenced document (including any amendments) applies.

ISO 30400, Human resource management - Vocabulary

ISO 30414, Human resource management - Guidelines for internal and external human capital reporting

3 Terms and definitions

For the purposes of this document, the terms and definitions given in ISO 30400 and ISO 30414 and the
following apply.

ISO and IEC maintain terminological databases for use in standardization at the following addresses:

ISO Online browsing platform: available at https://www.iso.org/obp

IEC Electropedia: available at http://www.electropedia.org/

3 .1
learning
<learning and development> broad, multifaceted set of activities focused on improving the performance
of individuals and organizations through the knowledge, skills and abilities of people

Note 1 to entry: Learning is the act of obtaining or acquiring new knowledge, skills and abilities and occurs
through the impact of education, training and instruction, practice or study on the individual.

Note 2 to entry: Formal learning is when the learner outcomes are defined and structured by the curriculum,
learning and instructional design and by the organizing body or individual.

Note 3 to entry: Can include reflective learning, which is a formal or informal process that deliberately draws on
experience to thinking about events, relationships and learning activities to identify what has been learned and
to generate and consider ideas.

Note 4 to entry: Can include team learning, which is a social and relational process that occurs from collaboration
between individuals leading to coordination of knowledge and behaviours as a feature of their work processes.

Note 5 to entry: Workplace learning is the acquisition of work-related knowledge and skills that is the result of
training that takes place at work.

Note 6 to entry: Can include learning through the means of communication technology, sometimes referred to as
e-learning.

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to achieve for any given workforce competency level. Likewise, a less proficient workforce (lower
competency rating) can require a higher level of investment for any given level of challenge. A second
important purpose is to provide the information to external stakeholders and employees so they can
make informed decisions about the organization's commitment to invest in its workforce. A third
purpose is to provide information so that researchers can better explore the correlation and causality
between higher levels of investment in skills and capabilities and organizational performance.

4.4 Formula

4.4.1 General

Total development and training cost is simply the sum of all spending on training and development by
an organization.

The operational formula is:

Total development and training cost = sum of spending by all training departments within the
organization + sum of spending on training by other departments not already captured by the training
departments (if available) + sum of spending on tuition assistance for certificate or degree programmes.

In practice, data for the first part of the formula should be readily available for any organization that
has one or more training departments. Most of the spending on training and development should be
captured in the training departments' expense statements.

Some organizations are too small to have a dedicated training department and, in this case, there can
be an expense line item for training which can be used.

Even in organizations with a training department, it is not uncommon for spending on training to
occur outside the training departments. Often, units send their employees to training outside the
organization and this training is not typically captured by the training department. If data on these
outside expenditures is available, it should be added.

Tuition assistance can be managed by the training department, a different HR function or the business
units.

Total development and training cost should be calculated using the most aggregated data available.
Start with the departmental expense statements for the training departments which should include all
the costs associated with providing the training, including staff expenses, overheads (e.g. room rental,
materials, travel, consultants, vendors, LMS), and internal charges (e.g. some organizations charge
their training departments for space, HR, IT ). Starting with aggregate costs is much easier and more
accurate than trying to build up the cost of training on a programme-by-programme basis.

4.4.2 Case study 1

An organization with one centralized training department and five business units.

This example shows the calculation for an organization with five business units and one centralized
training department. The tuition assistance budget rests outside the training department. In this
example, training is highly, but not completely, centralized in the one training department.

Consequently, the training department accounts for about 80 % of the total development and training
cost.

Spending

$
Training department 515 000
Business unit 1 15 000
Business unit 2 10 000

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Business unit 3 35 000

Business unit 4 20 000
Business unit 5 25 000
Tuition assistance 30 000
Total 650 000

4.4.3 Case study 2

An organization with one small centralized training department, three business units with their own
training departments and two business units without training departments.

This example shows the calculation for an organization with a decentralized structure for training.
There are still five business units but three of those units have their own training department. There is
a small central training department with responsibility for leadership development. Tuition assistance
again rests outside the training departments.

Spending

$
Training department 65 000
Business unit 1 with training department 115 000
Business unit 2 with training department 145 000
Business unit 25 000
Business unit 4 15 000
Business unit 5 with own training department 230 000
Tuition assistance 30 000
Total 62 5 000

When aggregate data are not available in a small organization, the cost of training should be calculated
on a programme level and then summed, using the following formula for each programme:

Total cost of training and development= (staff time x fully burdened labour and related rate) + other
direct programme costs (e.g. room rental, materials, vendors or consultants, travel of staff )

4.4.4 Case study 3

An organization with no training department.

This example shows the calculations for a small organization with three programmes. The first
two programmes are developed and taught internally while the third programme is purchased and
facilitated by an outside vendor. The following have been calculated or estimated:

a) Programme 1

staff time to develop, deliver and manage= 40 hours (see NOTE 1);

average labour and related rate for staff= $35/hour (see NOTE 2);

burden rate for staff= $50/hour (see NOTE 2);

fully burdened labour and related rate= $35/hour + $50/hour= $85/hour;

direct costs= $5 000.

b) Programme 2
- staff time to develop, deliver and manage= 80 hours;

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average labour and related rate for staff= $ 40/hour;

burden rate for staff= $50/hour;

fully burdened labour and related rate= $40/hour + $50/hour= $90/hour;

direct costs= $10 000.

c) Programme 3

staff time to manage vendor= 20 hours;

average labour and related rate for staff= $50/hour;

burden rate for staff= $50/hour;

fully burdened labour and related rate= $50/hour + $50/hour= $100/hour;

direct cost= Vendor cost= $25 000.

NOTE 1 "Develop, deliver and manage" includes all the effort associated with identifying and confirming the
need for training, designing and developing it or selecting and managing a vendor to do the same, delivering the
training or managing a vendor to deliver, reinforcing the learning, measuring results and closing the programme
out.

NOTE 2 The labour and related rate includes hourly salary plus any benefits tied directly to hourly salary,
such as employer-paid taxes. The burden represents the overhead cost and can be calculated as departmental
expense less the labour and related and direct (programme-attributable) costs. The burden rate is the burden
cost divided by the number of hours actually worked in a year, which takes into account the fact that employees
don't work 40 hours per week x 52 weeks per year due to vacations, holidays, sick days and time sp ent in staff
meetings and training. (The accounting department can help determine the burden rate. As the example shows,
the burden rate can easily be as much or more than the labour and related rate.)

The programme costs can now be calculated as follows:

Programme 1 cost= (40 hours x $85/hour) + $5 000= $3 400 + $5 000= $8 400.

Programme 2 cost= (80 hours x $90/hour) + $10 000= $7 200 + $10 000= $17 200.

Programme 3 cost= ( 20 hours x $100/hour) + $25 000= $2 000 + $25 000= $27 000.

Finally, the total cost of training and development for the organization can be calculated as follows:

Total cost of training and development= $8 400 + $17 200 + $27 000= $52, 600.

4.5 Use

4.5.1 General

The use of this metric and its derivative metrics is explored for three different user groups: internal
users, external users and academic users.

4.5.2 Internal users

Total development and training cost is a key metric of an organization's investment in its workforce. As
such, every organization should know the value of this metric and it should be managed strategically
to produce the desired results. Key internal users include the CEO, CFO, heads of HR and learning
and development, and employees. The right investment in development and training differs for each
organization depending on the challenge of its goals and needs and on the existing competency of its
workforce.

It is common to track total development and training cost over time as illustrated in Figures 1 and .2_.

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900
800

/-
-
700
600
500
400
300
200
100
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 x
Key

X year
Y total development and training cost, $

Figure 1 - Total development and training cost

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30
26%
25

20

15

10

5 4% 4%
3% 3% 3%

0 I I I I 0%
I
I
-5
I
-6%
-4%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 x
Key

X year
Y annual change in total development and training cost, %

Figure 2 - Annual change in total development and training cost

Figure 1 shows the level of spending each year while Figure 2 shows the change. The annual percentage
change is a commonly benchmarked metric. In this example, spending increased by 3 % to 4 % per
year until 2015 when it increased significantly in support of a major organizational initiative. Spending
then decreased in 2016 and 2017 and finally stabilized in 2018 as the initiative was completed. Trend
growth resumed in 2019.

With the caveat still in mind that the optimal level of spending is unique for each organization and
should reflect the level of organizational challenge and workforce competency, organizations often
benchmark their own level of investment in training and development against other organizations.
Since the amount invested typically scales with the size of the organization, it is common to express
the cost of training and development as a ratio which makes comparisons to other organizations more
meaningful. The four most common ratios are:

1) Average expenditure per employee= total development and training cost/number of employees.

2) Average expenditure per learner= total development and training cost/number of learners.

3) Total development and training cost as a percentage of payroll = total development and training
cost/total payroll.

4) Total development and training cost as a percentage of revenue = Total development and training
cost/total revenue.

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The average expenditure per employee is widely used and benchmarked, so it is relatively easy to
compare one organization with another. For example, suppose we have data for two organizations:

a) Organization 1

total development and training cost= $100 000;

total number of employees= 50;

average expenditure per employee= $100 000/50= $2 000 per employee;

b) Organization 2

total development and training cost= $200 000;

total number of employees= 50;

average expenditure per employee= $100 000/50= $4 000 per employee.

It is clear from the data that organization 2 invests more overall than organization 1 and that it spends
more per employee. However, it can be the case that the goals of organization 1 are easier to attain than
those of organization 2, and it can be the case that the competency rate of the workforce is higher in
organization 1. Consequently, both organizations can be at optimum investment levels for training and
development based on their unique situations. It can even be the case that organization 1 is spending
too much while organization 2 is spending too little, given their respective levels of challenge and
workforce competency.

If an organization uses contingent workers, an alternative measure of per-person spending is to divide

total development and training cost by the number of workers, where the number of workers equals
employees + contract workers + temporary employees.

NOTE Total development and training cost does not include training provided by the contracting or
temporary agencies. It does include training provided by the organization to contract or temporary workers.

This is appropriate if the contingent workers require the same type of investment as employees to be
productive. If different categories of the workforce require different amounts of training then a table
showing the average spending per worker by category is recommended.

Some benchmarks for this measure use FTE rather than headcount for number of employees. This
produces a larger average expenditure than headcount since FTE < headcount. Use of FTE can be
appropriate when FTE greatly exceeds headcount and when part-time employees need the same amount
of training as full-time employees.

Another common comparison is average expenditure per learner, which simply replaces the number
of employees with the number of learners. For example, if organization 1 has 30 learners, the average
spend per learner is $3 333:

Average expenditure per learner= $100 000/30= $3 333 per learner.

Some prefer to compare the total cost of training and development to payroll or revenue. If the
organization spends $100,000 on training and development and has a payroll of $2 500 000, the
percentage of payroll is 4 %:

Total cost of training and development as a percentage of payroll= $100 000/ $2 500 000= 4,0 %.

If revenue is $10 000 000 the ratio is 1 %:

Total cost of training and development as a percentage of revenue= $100 000/ $10 000 000= 1,0 %.

These two metrics are also commonly benchmarked, but the same caveats apply. An organization
with training cost as a lower percentage of payroll or revenue than the benchmark (or a comparison
organization) does not necessarily need to spend more. Likewise, an organization spending a higher
percentage on training than the benchmark should not necessarily reduce its budget. The right level

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of investment depends on individual circumstances. Furthermore, these ratios vary significantly by

organization size and industry.

Internal users should also examine the distribution by categories of interest. For example, it is
interesting to know if average expenditures are similar or different across units and regions or
across different categories of employees (e.g. management versus non-management) or by employee
demographics (e.g. gender or age).

4.5.3 External users

Another purpose of the training and development cost metric is to allow external stakeholders to
compare organizations against each other and the benchmark, and to provide time series data to
analyse an organization's investment in training and development over time. Key users here include
investment analysts and the CEOs and CFOs of other organizations. They will be interested in the same
ratios described in .4..5...1. and be able to calculate all four ratios with data generally available for publicly
traded companies.

Given the limitations discussed in 4.5.1 about comparisons to other organizations and to the benchmark,
it is important for management to provide background and context when sharing the total cost of
training and development externally. Management will possibly want to discuss the level of challenge
and the competency rate of the workforce as well as their expectations for the impact of the training.

The same issues are likely to be present when comparing trends over time for a single organization.
Here again there is a need for management to provide context and explain why the current year metrics
are higher or lower than previous years.

Other key external users include potential employees who would prefer to work for an organization that
invests in its workforce. Prospective employees are likely to be particularly interested in the average
expenditure per employee and learner.

4.5.4 Academic users

A final use for the total cost of training and development is in academic research to identify how it relates
to a variety of outcomes, including employee engagement, turnover, sales, productivity, compliance, and
profit or surplus. With large enough data sets and with information provided by management, it can be
possible to predict the outcomes from training and development while controlling for other factors.

5 Percentage of employees who participate in training

5.1 General

The percentage of employees who participate in training provides an important measure of the breadth
or reach of training within an organization. This metric helps answer the question of whether an
organization provides training and development opportunities to just a few or to many. This metric of
breadth or reach complements metrics of depth, such as average expenditure per learner and average
hours of formal training. ISO 30414 recommends this metric be used for internal reporting by all
organizations.

5.2 Description

The percentage of employees who participate in training is defined as the number of employees who
participate in at least one formal training experience divided by the total number of employees. Formal
training includes learning activities such as instructor-led training, virtual instructor-led training
(instructor is at a different location than the participants), online or e-learning, simulations and formal
coaching (where a designated coach mentors the participant, as opposed to informal coaching or
feedback, which can occur at any time and is generally not measured). Structured or formal mobile
learning which is part of a formal course is also included.

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The number of employees can be further segmented by category of employees (management, non­
management), location or unit, or by type of training (e.g. non-compliance-related training).

NOTE Many organizations have an LMS to record participation in formal training. The LMS provides the
number of employees who have participated in at least one instance of formal training (referred to as "unique
participants"). For example, if an employee takes two courses during the year, the employee is counted as one
unique participant with two instances of total participation.

5.3 Purpose

The purpose of this metric is to evaluate the breadth or reach of the organization's training effort. The
organization can have above-average spending on training and development, but the effort is focused on
a small number of employees. For example, some organizations can invest heavily in leaders, managers
and a few specialists, but provide very few development opportunities for most employees. This metric
is of particular interest to senior leaders, including CE Os and heads of HR and learning and development,
especially when there is a goal to improve employee engagement and surveys indicate that employees
currently are not satisfied with their development opportunities. It will also be of interest to existing
and potential employees.

5.4 Formula

The formula for percentage of employees who participate in training is:

Percentage of employees who participate in training= number of employees who participate in at least
one formal training experience/total number of employees

For example, suppose the organization has the following numbers of employees:

Number of employees who participated in training= 950.

Total number of employees= 1 000.

In this case the percentage who participated in training is 95 %:

Percentage who participated in training= 950/1 000= 95 %.

The number of employees who participate in training can be segmented by categories of interest. For
example, suppose the following breakdowns are available:

Number who participated in non-compliance-related training= 450.

Number of management employees who participated in training= 97.

Total number of management employees= 100.

Number of non-management employees who participated in training= 853.

Total number of non-management employees= 900.

The percentages of employees who participate in training can now be calculated:

Percentage of employees who participated in non-compliance training= 450/1 000= 45 %.

Percentage of management employees who participated in training= 97/100= 97 %.

Percentage of non-management employees who participated in training= 853/900= 95 %.

If the organization uses a contingent workforce, workforce can be used instead of number of employees
to provide an alternative measure of participation.

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5.5 Use

This metric is intended to demonstrate the breadth or reach of the training effort. The percentage of
employees who take training will be of particular interest to CEOs and heads of HR and learning and
development. This metric complements the ratios of average expenditure and percentage of revenue or
payroll, and the two types of metrics taken together provide a more holistic picture of an organization's
investment in its workforce.

The overall percentage of employees who participate in training should reflect the organization's
learning strategy. For example, does the organization strive to ensure that every employee has learning
opportunities beyond compliance training? If so, is a target or plan set at the start of the year and is
the percentage who participate in training then managed throughout the year towards the plan? This
is particularly important if the organization wants to increase its employee engagement score and
if employees have indicated that they would like more learning opportunities. The organization can
analyse and manage this metric by category of employee as well.

An example of showing the calculations in total and by category is shown in Table 1.

Table 1 - Percentage of employees who participate in training

Percentage of employees who

participated in training
Number who partici- Total number of
Category pated in training employees %
All employe es 9SO 1 000 9S
Compliance 930 1 000 93
Non-compliance 4SO 1 000 4S
Male S60 600 93
Female 390 400 98
Management 97 100 97
Non-management 8S3 900 9S
Length of employment
::; 1 year so so 100
1 to 3 years 2SO 2SO 100
4 to 10 years 390 400 98
;:: 10 years 260 300 87
Total 9SO 1 000

Table 1 clearly illustrates the importance of at least showing the non-compliance-related training. The
headline figure that 95 % of employees participated in training hides the fact that only 45 % of the
employees took at least one non-compliance-related course. Female participation (98 %) is slightly
higher than male participation (93 %), and management participation just slightly higher than non­
management participation, although further analysis for just non-compliance training is desirable.

Table 2 provides an example of an organization which uses a large contingent workforce. Jn this example,
there are 500 contingent workers in addition to 1 000 full- and part-time employees. The participation
rate is lower for contingent workers (70 %) than full- and part-time employees (95 %). Just as with full­
and part-time employees in Table 1. the participation rate for non-compliance-related training is much
lower than for compliance training.

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Table 2 - Percentage of workforce who participate in training

Percentage of workforce
who participated in train-
Number who
ing
participated in Total number in work-
Category training force %
Total workforce 1 300 1 500 87
Contingent workers 350 500 70
Contract workers 10 50 20
Temporary Workers 340 450 76
Compliance 325 500 65
Non-compliance 120 500 12
Full and part-time employees 950 1 000 95
Compliance 870 1 000 87
Non-compliance 450 1 000 45
Male 560 600 93
Female 390 400 98
Management 380 400 95
Non-management 570 600 95
Length of employment
:5 1 year 50 50 100
1 to 3 years 250 250 100
4 to 10 years 390 400 98
� 10 years 260 300 87

At a mm1mum, a table for an organization with a large contingent workforce should include an
addendum showing the percentage of contract and temporary workers who receive training.

6 Average formalized training hours per employee

6.1 General

The average formalized training hours per employee is another important metric of an organization's
investment in its workforce. As with average training expenditure per employee, this is a measure of
the depth of commitment to employee development and is readily benchmarked. For a complete picture
of an organization's commitment to its workforce, it should be analysed together with a breadth metric
such as percentage of employees who participate in training. ISO 30414 recommends this metric for
internal reporting by all organizations.

6.2 Description

The metric for average formalized training hours per employee is defined as the total formal training
hours for all employees divided by the number of employees. Formal training includes learning activities
such as instructor-led training, virtual instructor-led training (instructor is at a different location than
the participants), online or e-learning, simulations and formal coaching (where a designated coach
mentors the participant, as opposed to informal coaching or feedback, which can occur at any time and
is more difficult to measure). Structured or formal mobile learning which is part of a formal course is
also included. With the exception of formal coaching and perhaps mobile learning, the training hours
should be captured by an organization's LMS in most organizations.

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6.3 Purpose

The purpose of this metric is to evaluate the commitment of an organization to developing its
workforce. In general, an organization providing more hours of training than another organization is
making a greater investment in its employees. Of course, all training is not equal, and it is possible
that an organization is providing fewer average hours of training than the benchmark or another
organization, but its training is of higher quality and greater impact, which can be reflected in a higher
average expenditure per employee. Recognizing the differences in training, organizational challenges
and needs, and workforce competency, it is always recommended that a number of metrics are looked
at to get a more complete picture of an organization's investment in its workforce. This metric will be of
particular interest to heads of HR and learning and development, and also to CEOs.

6.4 Formula

The formula for average formalized training hours per employee is:

Average formalized training hours per employee= total formalized training hours/number of employees

Total formalized training hours is the sum of the training hours for all formal training, including
physical and virtual instructor-led training, e-learning, simulations and formal coaching. Structured or
formal mobile learning which is part of a formal course is also included. Hours spent learning informally
(e.g. on the job, informal coaching, searching for information) are not included.

Average formalized training hours can also be calculated for categories of employees or by training
modality (e.g. instructor-led, e-learning).

If the organization uses a large contingent workforce, consideration should be given to using workforce
instead of number of employees to provide a more accurate measure.

Some benchmarks use FTE instead of headcount for employees. The use of FTE produces a higher
average, since FTE < headcount.

6.5 Use

This metric is intended to demonstrate the depth of an organization's commitment to developing its
workforce. The average formalized training hours will be of most interest to heads of HR and learning
and development, and also to CEOs. These internal users will be interested to see the depth of training
expressed as the overall average per employee but also the total hours and as average per employee
by different demographic categories. This metric will assist them in deciding whether the total and
average hours are sufficient to meet the organization's needs. The metric will also help them identify
any inequities by demographic group and reveal any areas where the number of hours seems out of line
given the organization's needs and budget.

If the organization uses a large contingent workforce, workforce can be used instead of number of
employees to provide a more accurate measure. In this case, total hours of training includes training for
contract and temporary workers provided by the organization (not the agency which employs them).
At a minimum, the table should include an addendum showing the data for contract and temporary
workers.

An example showing calculations for the total and by category is shown in Table 3, which includes an
addendum providing the basic information about contract and temporary workers.

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Table 3 - Average formalized training hours per employee

Average formalized
Total formalized training training per employee
Total number of
Category h employees h
All employees 4S 000 1 000 4S
Compliance 17 000 1 000 17
Non-compliance 28 000 1 000 28
Male 24 000 600 40
Female 21 000 400 S3
Management 2S 000 400 63
Non-management 20 000 600 33
Length of employment
:5 1 year 9 000 so 180
1 to 3 years 13 000 2SO S2
4 to 10 years 18 000 400 4S
� 10 years s 000 300 17
Addendum: contingent and
total workforce
Contingent workers 1 700 soo 3
Contract workers 100 so 2
Temporary workers 1 600 450 4
Employees 4S 000 1,000 4S
Total workforce 46 700 1, SOO 31

Table 3 not only provides the total hours of training (45 000 h) and the average per employee (45 h),
but also important detail to further understand and analyse the average. Compliance-related training
accounts for 17 000 h of the 45 000 h which can make sense or not depending on the level of regulation,
the risk inherent in the business and culture of compliance. It is interesting to note that women take an
average 13 h more training than men, which possibly reflects the results of a campaign to encourage
women to take more training to be eligible for promotional opportunities or simply that the newer
employees are mostly women. Management take considerably more training than non-management,
which raises the question of whether this is intentional or not. The need for training is inversely related
to experience, which makes sense with newer employees taking a much higher average amount of
training.

The addendum provides the basic information for the contingent workforce, showing that contract and
temporary workers receive very little training, which is likely to be compliance related.

7 Percentage of employees who participate in formalized training by category

7.1 General

This metric of the percentage of employees who participate in formalized training focuses on the
categories or areas of training versus the demographic categories discussed in Clause 5. It answers
questions such as what percentage of employees take leadership training or compliance training. It is
intended to provide the necessary detail to allow management to see the distribution of training by
area and to evaluate whether the training effort is properly aligned to the needs of the organization.

Considering the effort to identify training by area, ISO 30414 recommends this metric for internal
reporting by large organizations only.

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7.2 Description

The percentage of employees who participate in formalized training by category expands on the metric
in Clause 5 to provide detail by area within the organization. It is expected that each organization
has some areas or categories in common with most other organizations, as well as some categories
more unique to its industry and needs. Examples of areas or categories include compliance, leadership
and basic skills. The goal is for each organization to have a list of the most important and relevant
categories to manage its own training. This metric is not intended for external reporting so uniformity
for benchmarking is not an issue.

Formalized training is defined as formal training and includes learning activities such as instructor­
led training, virtual instructor-led training (instructor is at a different location than the participants),
online or e-learning, simulations and formal coaching (where a designated coach mentors the
participant, as opposed to informal coaching or feedback, which can occur at any time and is more
difficult to measure).

Structured or formal mobile learning which is part of a formal course is also included.

7.3 Purpose

The purpose of this metric is to understand the mix of training being taken by employees and then to
evaluate whether the mix is aligned to the organization's priorities. In other words, does the mix make
sense given the organization's goals, needs and challenges as well as its workforce competency levels?
This metric, as with the percentage of employees who participate in formalized training, is an indicator
of the breadth of training in an organization. It helps answer questions about which areas are receiving
the training. As noted in the other clauses, no single metric for training and development can provide a
complete picture of the current state, and the recommendation is to use multiple metrics to understand
both the depth and breadth of the training effort.

7.4 Formula

The formula for this metric is:

Percentage of employees who participate in formalized training by category = number of employees

who participate in formal training in a category/number of total employees

The calculation is made for each identified category or area, with the numerator reflecting the number
who took training in that category and the denominator being the total number of employees in the
organization or in a particular category.

For example, if the organization has the following numbers of employees:

Number who participated in leadership training= 65.

Number who participated in compliance training= 930.

Total number of employees= 1 000.

In this example, the percentage who participated in leadership training is 6,5 %:

Percentage who participated in leadership training= 65/1 000= 6, 5 %.

And the percentage who participated in compliance-related training is 93 %:

Percentage who participated in compliance training= 930/1 000= 93 %.

NOTE If the organization employs a large contingent workforce for whom training is important, workforce
can be used instead of number of employees to provide an alternative measure.

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7.5 Use

This metric is intended to show the distribution or mix of training measured as the percentage who
participated by category or area. This distribution will be of interest to CEOs and heads of HR and
learning and development. The results can be used to assess whether the current mix is aligned to
the goals and priorities of the organization when considering the competency levels of those in the
identified categories.

There is not a single prescribed list of categories that is appropriate for all organizations. Instead, each
organization should create its own list of relevant categories, selecting areas of training used by many
employees and areas of interest to senior leadership, which will often reflect important organizational
initiatives. Some categories are common across organizations, such as onboarding, compliance and
leadership. Every organization also offers some soft skills training, although the specific courses
vary. Many organizations also offer a number of courses of general interest which are not aligned to
any one topic or category. In addition, organizations typically offer training in relevant professions
or specialities, such as marketing, engineering, IT, purchasing and distribution. A company in the
manufacturing sector will also have training specific to manufacturing to address the needs of the
factories.

An example is provided in Table 4 for an organization with 1 000 employees.

Table 4 - Percentage of employees who participate in formalized training by category

Percentage of employees who

participated in training
Number who participated
Category in training %
Onboarding 50 5
Compliance 930 93
Soft skills
Communications 60 6
Team work 80 8
Business acumen 40 4
Innovation 80 8
Problem solving 160 16
Diversity and inclusion 425 43
Totaia 515 52
Leadership 65 7
Marketing 85 9
Engineering 110 11
IT 95 10
Other professions 55 6
Total professional 345 35
Manufacturing 145 15
General studies 670 67
a
Total is less than the sum since some employees took courses in two or more categories.

CEOs and heads of HR and learning and development will be interested in the relative frequencies or
mix by category. In this example, nearly all (93 %) employees participated in compliance training. Two­
thirds also took at least one general interest course. The next-highest frequency (52 %) is for soft skills
where the organization has chosen to highlight six areas. Of the six, diversity and inclusion represents
the area of most interest (43 %). 35 % of employees have taken some professional training and 15 %
have taken manufacturing-related training. From a management perspective, this allows senior leaders
to judge whether the mix is appropriate given the goals, challenges and competency levels of the

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workforce. For example, leaders can decide that a higher percentage of employees should be taking soft­
skill courses or courses for the professions.

CE Os and heads of HR and learning and development will also be interested in this breakdown of usage
by category to determine if goals are being met. For example, if the organization had a goal that every
employee should take some compliance training, that goal is not being met. Likewise, if the organization
had launched a diversity and inclusion initiative with the goal of getting 400 employees through training
during the year, the goal has been exceeded. There can be a goal for all employees to participate in the
general interest learning as a way to improve employee engagement and ultimately retention. Table 3
indicates that only two-thirds are taking these courses, so the goal is not being met.

NOTE If the organization uses a large contingent workforce for whom training is important, workforce
can be used instead of number of employees in the calculation to provide an alternative measure. Alternatively,
columns can be added to Table 4 for the contingent workforce to highlight differences between employees and
contingent workers.

Senior leaders will also be interested in the percentage of employees by category who participated in
training. In other words, what percentage of the employees in a category (not in total) participated in
training. An example is provided in Table 5. which now includes the total number of employees in each
category and shows the percentage of that total who participated in training.

Table 5 - Percentage of employees by category who participated in formalized training

Participation rate by
Number who Total number of
category
participated in employees in
Category training category %
Leadership 65 100 65
Marketing 85 100 85
Engineering 110 160 69
IT 95 190 50
Other professions 55 150 37
Total professional 345 600 58
Manufacturing 145 300 48

In this example, 65 of the 100 leaders participated in training, for a participation rate of 65 %. The
participation rate is very high for marketing at 85 % and engineering at 69 % but lower for IT at S O %
and lower still for other professions at 37 %. The question for leaders is what the participation rate
should be if the organization is to meet its goals and challenges.

8 Workforce competency rate

8.1 General

Workforce competency rate is an important metric because it provides information on the proficiency
level of the workforce. It answers the question of whether the existing workforce has the talent to meet
job requirements. If not, either training needs to be provided to those not meeting standards or new
workers with the requisite skills should be hired. If neither of these actions is taken, goals cannot be
met and the organizational performance can suffer. The competency rate detail indicates the size of
the gap that needs to be filled and also shows whether there are enough highly proficient workers to
train and mentor those who need it. Considering the effort to collect competency ratings, ISO 30414
recommends this metric for internal reporting by large organizations only.

8.2 Description

The workforce competency rate is the average of competency ratings assigned to employees. The
individual competency rating can be based on an objective assessment (using some test instrument)

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or a subjective assessment by the employee, supervisor or both. The workforce competency rate is
intended to show whether the central tendency of competencies possessed by the workforce is above,
below or within an acceptable range of the desired level.

NOTE For the purposes of this specification, competency is defined as a spectrum of capability, often
measured on a five-p oint scale from no or little capability to expert. An organization can determine the
proficiency or minimum competency level required for e ach position. Others can define competency in binary
terms where a j obholder is determined to be competent or not.

8.3 Purpose

The purpose of this metric is to understand the competency level for the workforce in total and, just as
importantly, the competency levels for individual groups and categories of employees. This is critical
to understand the readiness of the workforce to meet the goals and challenges of the organization. The
workforce competency rate also plays an important role in determining which groups need training
and how much training is required to meet acceptable proficiency levels. So, the degree of challenge
posed by the organization's goals combined with the workforce competency rate determines how much
training is required. In general, an organization with a low workforce competency rate requires more
training, resulting in higher total training and development costs, a higher participation rate in training
and more hours of training.

8.4 Formula

The formula for workforce competency rate is:

Workforce competency rate = average of employee competency ratings

Individual employee competency ratings can be generated objectively using a structured instrument or
subjectively using the opinion of the employee, supervisor or both. In either case, the requirements of
the job should be specified and a scale created to differentiate levels of competence. At least a five-point
scale is recommended to provide enough differentiation by level. The choice of method and scale is left
to the organization but should be disclosed when sharing the results.

For example, the following five competency levels have been agreed upon for a sales position:

Level 1: basic knowledge of the industry, selling skills and product features. Little or no experience
selling. Low confidence level. Not ready to interact with customers.

Level 2: good knowledge of the industry, selling skills and product features. One-to-three years'
selling experience. Moderate level of confidence. Able to sell to small customers and assist with larger
customers.

Level 3: good knowledge of the industry, selling skills and product features. Four-to-10 years' selling
experience. High level of confidence. Able to sell to all customers except the largest accounts.

Level 4: excellent knowledge of the industry, selling skills and product features. Very confident.
Significant selling experience (more than 10 years) with all levels of customer, including the largest and
most complex accounts.

Level 5: recognized as a company expert and extremely knowledgeable about all aspects of sales.
Teaches and mentors others. Represents the company on national and international advisory bodies.

The most appropriate competency level for each sales representative can be found by asking the
employee, supervisor or both to select the level that best describes the representative's level of
competency. Once a level has been determined for each representative in the department, the levels
are averaged to determine the workforce competency rate for the sales representatives. The following
example shows the calculation:

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E mployee Competency rating

Representative 1 3
Representative 2 3
Representative 3 2
Representative 4 3
Representative 5 4
Representative 6 4
Representative 7 5
Representative 8 1
Average for representatives 3,13

In this example the competency rating for the sales representatives is 3,13, which can be rounded to 3,1
for presentation and discussion. Retain all significant digits for use in further calculations.

A separate list of criteria is required to evaluate the other positions in the department, such as sale
supervisor and department manager. Once a level has been determined for each person in each group,
the average can be found for that group just as in the previous example for sales representatives. Then
the workforce competency rate for the entire department can be found using a weighted average where
the weights are the number of employees in each group. The following example shows the calculations:

E mployee Competency rating Number in group Weight

Sales representatives 3,13 8 8/11

Sales supervisors 3, 50 2 2/11
Department manager 4,00 1 1/11
Weighted average 3,28

As a formula:

Workforce competency rate= (3,13 x 8/11) + (3,5 x 2/11) + (4,0 x 1/11)= 2, 28 +0, 64 +0, 36= 3, 28

In practice, the rate is rounded to 3, 3 for presentation and represents the workforce competency rate
for the marketing department.

Note that the answer can also be found using a simple average of all 11 competency levels.

E mployee Competency rating

Representative 1 3
Representative 2 3
Representative 3 2
Representative 4 3
Representative 5 4
Representative 6 4
Representative 7 5
Representative 8 1
Supervisor 1 3
Supervisor 2 4
Department manager 4
Average for department 3,28

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Once competency levels have been determined for other departments, the average for the entire
workforce can be computed using weighted averages or by listing every employee. Table 6 shows the
use of weighted averages:

Table 6 - Calculation of workforce competency rate for the organization

Average
competency Number in
D epartment rating department F ractional weight Calculated weight

Department 1 (marketing) 3,28 11 11/1 000 0,011

Department 2 3,73 56 56/1 000 0,056
Department 3 2,91 19 19/1 000 0,019
Department 4 2,47 125 125/1 000 0,125
Department 5 3, 68 345 345/1 000 0,345
Department 6 4,24 85 85/1 000 0,085
Department 7 2,56 175 175/1 000 0,175
Department 8 2,80 22 22/1 000 0,022
Department 9 3,29 58 58/1 000 0,058
Department 10 2,68 104 104/1 000 0,104
Total 1 000 1 000/1 000 1,000
Weighted average 3,22

In this example, the workforce competency rate for the organization is 3, 2, indicating that on average,
the workforce is competent to perform their jobs. Alternatively, the rate for the organization can be
calculated as the simple average of all employees, but this presentation has the advantage of showing
the rate for each department.

8.5 Use

The workforce competency rate has several uses. First, it provides the CEO and heads of HR and
learning and development with the information they need to understand the current readiness of the
organization's employees to perform their jobs. Referring to Table 6. senior leaders can express concern
about the competency levels in departments 4 (level of 2,5), 7 (level of 2, 6) and perhaps 10 ( 2,7 ) and
8 ( 2,8). If these departments are critical to achieving the goals, there is cause for concern and, if not
addressed, can cause the organization to miss its goals. The organization must either provide more
training for existing employees to increase their competency levels or hire new employees who already
possess the desired level of competency.

Second, the department-level competency rates will help the department head and the head of learning
better understand the competency levels of the employees in each department. Suppose the following
data for department 4 in Table 6:

E mployee Competency rating

Employee 1 3
Employee 2 1
Employee 3 3
Employee 4 2
Employee 5 2
Employee 6 1
Employee 7 3
Employee 8 4
Employee 9 3
Employee 10 5

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E mployee Competency rating

Employee 11 3
Employee 12 2
Employee 13 1
Employee 14 2
Employee 15 2
Average for representatives 2,47

This data can represent data from a department with a lot of new and inexperienced employees, which
in turn can reflect unexpected turnover or simply the difficulty of finding competent employees in a
tight labour market. In either case, there is an issue here with eight of the 15 employees below the
desired competency level of 3. Furthermore, it will be difficult for the single level 5 employee to coach
them all. Formal training is almost certainly called for in this example to bring the knowledge level of
the eight employees up as quickly as possible. In addition, it is possible that the learning group will be
able to create structured coaching that most efficiently uses the talents of the single level 5 employee.

Finally, the workforce competency rates can be analysed by professional group rather than by
department. In many organizations, professionals such as accountants, engineers and attorneys are
located in departments as well as in a central group. In this case, the engineering department would
not capture all the engineers in the organization. The following example shows a high-level view of the
competency levels for all engineers.

Location of engineers Competency rating Number in group Weight

Headquarters 3, 60 10 10/20
Business unit A 3,00 4 4/20
Business unit B 3,33 3 3/20
Business unit C 2, 50 2 2/20
Business unit D 3,00 1 1/20
Total 20 20/20
Weighted average 3,30

In this example, the competency level for the engineers at headquarters is excellent at 3, 6 on average and
the three engineers in unit B have a good rating of 3,3, but unit C is a potential concern with an average
of 2, 5. In this case, however, there are only two engineers, which means one of the two engineers has a
level of 2. The question then becomes whether unit C can accomplish its goals if one of its two engineers
is only at level 2. Perhaps this engineer would be better placed at headquarters.

A more detailed view by name can also be generated.

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