Costs and Benefits of Team Building Events

Costs and Benefits of Team Building Events

Companies often spend a lot of money on training and team building events, so it only makes sense that they will want to see what they got back from the training. In some cases, this may be easy – you may be able to see a drop in hard numbers (like product defects, customer complaints, or days absent) as a result of your training. In other cases, the benefit might involve something much harder to calculate, like reduced stress, improved teamwork, or better communication.

Identifying and Measuring Tangible Benefits

Tangible benefits are those with a number attached to them. Some examples include:

  • Rate of absenteeism or turnover
  • Sales
  • Profits
  • Number or rand value of returns
  • Number or percentage of customer complaints
  • Length of downtime (due to accidents, machine failure, etc.)
  • Production volume
  • Error or defect rate
  • Customer and/or employee satisfaction
  • Response time

When gathering these metrics, make sure to gather information for a few months before and a few months after the time period that you are measuring, as well as data for the same time period in years previous. You will also want to be aware of external factors that could affect your data, such as weather, economic conditions, and changes in the company.

Identifying and Measuring Intangible Benefits

Training  and team building activities often provide more intangible benefits, such as better communication, improved anger and stress management, clearer writing skills, or more effective time management. It can be hard to put dollars and cents value on these skills; however, we are often asked to do so to prove that the training has been worthwhile.

  • Here are some ways to convert intangible benefits to hard numbers:
  • Calculate the time saved in hours and multiply by the person’s hourly wage
  • Tie the intangible benefit to a tangible benefit

Calculating Total Costs

Our next step is identifying the cost of the team building program. This should include:

  • Employee salaries paid while they were attending the program
  • Trainee expenses such as food, hotel, and transportation
  • Cost of materials and facility for the program
  • Facilitator cost before, during, and after the program
  • Development and licensing costs
  • Administrative costs

Making a Business Case

All of the evaluations and measurements that you perform before, during, and after a training or team building session should give you quantifiable, consistent information about the training that you performed. This information will help you:

  • Improve your training programs
  • Have confidence in yourself as a trainer
  • Gain support for your programs
  • You can also use this information when building a business case or proposal for your next team building program. A business case usually has the following items:
  • Executive Summary
  • Background Information (to provide context)
  • Needs Analysis
  • Recommendations
  • Anticipated Benefits
  • Estimated Cost
  • Next Steps
  • References and Supporting Materials

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