Gold Standard ROI report

Gold Standard

Estimating Return on Investment (ROI)

February 2014

A REPORT SUBMITTED TO

Gold Standard – Estimating ROI

Table of Contents

1. Introduction ....................................................................................................... 1

2. Case Study A – William Blythe ............................................................................. 6

3. Case Study B – Pentagon Chemicals .................................................................. 10

4. Conclusions ...................................................................................................... 15

Key Contact:

Georgia Siora

Managing Director

WECD

www.w-ecd.com

Somerset House

Clarendon Place

CV32 5QN

+44(0) 1926 880405

[email protected]


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1. Introduction

This report presents the findings from the review of the return on investment (ROI) generated to

date for companies taking part and adopting Cogent’s Gold Standard.

The report is based on two cases studies drawn from visits and discussions with two companies that

adopted Cogent’s Gold Standard:

• William Blythe Limited - an advanced manufacturer of inorganic speciality chemicals and

an innovator in technology led solutions for functional derivatives of copper, tin, zinc and

iodine, based in Accrington in Lancashire. The chemistry of these four elements (copper,

zinc, tin and iodine) defines the product range, which covers applications and markets from

Performance Chemicals, Polymer and Pharmaceutical Additives to leading edge

electronics. The site employs 90 people and has turnover of circa £35 million per annum.

• Pentagon Chemicals - is a leading UK based chemical manufacturer of organic

intermediates for use in the life science, petrochemical, and specialty chemicals markets,

with sites in Workington in Cumbria and Halebank in Cheshire. The company offer a highly

regarded portfolio of sustainable, safe and reliable custom chemical manufacturing and

own products. The company has sales of over £40 million per annum and employs around

200 people.

The report is structured as follows:

• This section provides an overview of Cogent’s Gold Standard and a description of the

approach in estimating ROI by the two companies on Gold Standard to date.

• Section 2 presents the ROI assessment of the investment by William Blythe Limited.

• Section 3 presents the ROI assessment of the investment by Pentagon Chemicals.

• Section 4 – draws conclusions and make recommendations.

Warwick Economics and Development would like to express its gratitude to all individuals in

the two organisations that have provided data and information for this report.

1.1. Background to the Gold Standard

The Gold Standard is Cogent Sector Skills Council’s national employer-led framework for

competency management in the process industries including:

• Chemicals

• Polymers

• Pharmaceuticals

• Petroleum

The Gold Standard sets the national standard for Continuing Professional Development across key

job roles and describes and maps the competencies required to do each job across four areas of

competence:

• Technical Competence

• Business Improvement

• Compliance

• Functional and Behavioural


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The Gold Standard means for the organisations involved that they acquire:

• An industry skills benchmark for world-class performance;

• Assurance that a company's investment in skills hits all the right targets;

• The accreditation of existing skills and identification of gaps;

• Transferability of skills across the Process Industries;

• Signposting to fundable training programmes; and,

• Quality assured, training programmes delivered flexibly.

An organisation could acquire the standard through one of the following routes:

A. Accredited Training - through nationally accredited qualifications as follows:

• Companies can access the Gold Standard via the Cogent website.

• Individuals’ skills and training can be compared to the Gold Standard for each role.

• Appropriate training provision is identified within the Gold Standard to close any skills gaps.

• Employers can access Gold Standard qualifications from approved Skills Academy

providers.

This process therefore takes place at a pace and time to suit employers and their employees.

Furthermore, the approved training providers will be able to access funding where appropriate.

B. In-house training - through ASET (Assessment System for Employer Training) based on the

Skills Academy system benchmarking employer-delivered training against the Cogent Gold

Standard as follows:

• An experienced Auditor visits the company to carry out a formal audit of the company’s

training.

• The company gets a report indicating where mapping activity to Cogent Gold Standards is

recommended for action.

• The company chooses appropriate training programmes, based on guidance received.

• If the company wishes to have its in-house training accredited, they are given access to an

Approved Centre.

• A formal certificate is issued to the company, recognising the organisation’s achievement.

Participating companies formally record their pathways to the Gold Standard certification/award on

the Skills Academy Passport. The Skills Passport clearly identifies skills gaps against the Standard

and directs the user to an Academy Accredited training provider and training programme.

Overall, the Gold Standard programme addresses required industry identified skills, changes in

working practices, challenges of the knowledge economy and the demands of regulation within the

industry segment. It provides high quality training aligned to national standards, which develop

knowledge, skills & creativity, increase flexibility, improve efficiency & performance and support

skills development.

1.2. Approach to Estimating ROI

The ROI aims to compare benefits to the costs for organisations from participation and adoption

of Cogent’s Gold Standard. The ROI is therefore calculated as follows:


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Monetary Benefits

Benefits/Cost Ratio = Programme Costs

Monetary Benefits – Monetary Costs

ROI (%) = Programme Costs X 100

The level at which ROI is calculated is at company/business impact i.e. ROI is assessed in terms of

impact on key business performance indicators agreed with the participant organisations from a

suite of relevant indicators. These could include impact on both standard Quality Cost and Delivery

(QCD) company indicators used by the participant organisations and longer-term indicators such as

Sales, Turnover, Profit and Productivity, but also Human Resource Development indicators such as

recruitment savings and transactions, if/where available.

Ideally, a variety of data and data collection methods need to be used in order to establish the most

appropriate indicators. It needs, however, to be recognized that it may not be always possible to

gather the same type of information from all companies as companies vary in the type of data they

tend to collect. Therefore, there is a need to be realistic and flexible in terms of the type of data and

detail that can be collected from companies. A decision of the type of data to be used can be made

on a case-by-case basis.

Programme Costs

There is a wide range of direct and indirect cost data that may have been incurred by the business in

the course of implementing the Standard and these will need to be taken into account as follows:

Types of Costs

Direct Indirect

Programme Development and Materials Employee/participant’s time during the

programme

Facilities Training Manager’s time

Travel Supervisor’s time

Training/Accreditation Fees and Qualifications HR Manager’s time

Company’s management time (senior

management/Director/owner)

Administrative Overheads

These data need to be monetised i.e. converted to monies as follows:

Types of Costs

Direct Sources of information

Programme Development and Materials Company records/report analysis

Facilities (if company own used) Estimates/Standards values

Travel expenses involved Company records/report analysis

Training/Accreditation Fees and Qualifications Company records/report analysis

Indirect

Employee/participant’s time during the

programme

Company records/report analysis:

• Total no of days/hours spent on training by

employee


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• Position in the company and salary (average

for the specific position)

• No of employees trained (for aggregate

company level calculations)

Training Manager’s time Company records/report analysis:


employee



Supervisor’s time Company records/report analysis:


employee



HR Manager’s time Company records/report analysis:


employee



Company’s management time (senior

management/Director/owner)

Company records/report analysis:


employee



Administrative Overheads Company records/report analysis

Programme Benefits

Tangible benefits for the business manifest themselves in terms of improved Key Performance

Indicators (KPIs) and in turn savings and/or additional sales and turnover. It is important to note

that KPIs need to be relevant to the specific business/sector but in general would fall under the

following categories:

• Quality

• Labour

• Resource(s) Efficiency

• Delivery

• Orders/Sales

• Safety

• Working Environment

Specific indicators used to quantify these concepts and sources to be used are listed below:

Types of Benefits Sources of information

Quality This benefit refers to efficiency

and savings accrued as a result

of less/no faulty products

delivered to customers.

Expressed in terms of:

• Number of goods rejected at

Company performance

monitoring records/report

analysis


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different stages of the

production line against total

produced

• Quantity of returns by

customers as unsatisfactory

against total over a period of

time i.e. moves in the

customer satisfaction index

• Error ratio of inventory count

• Near misses reduction

Labour • Reduction in maintenance

costs

• Reduction in unscheduled

overtime

• Safeguarded jobs

• Productivity improvement

(could be as same outputs in

less time, or, more outputs in

same time as previously)

Company performance


analysis

Resources Efficiency • Waste reduction

• Energy/Water

Company performance


analysis

Delivery • Adherence rate of agreed

delivery date

• Average delivery lead time

• Time taken for a team to

respond to new

orders/inquiries

• Accuracy rate of inventory

count

Company performance


analysis

Orders/Sales • % of new orders that could be

attributed to the impacts of

the programme

Company performance


analysis

Safety • Total recordable rate Company performance


analysis

Working Environment Changes in organisational

attitudes behaviour and

intangible benefits could be also

recorded and included in the

write up of the case studies.

These could include:

- Job satisfaction

- Increased employee

engagement/staff morale

- New ideas

- Reduction in internal

conflicts and complaints

Company performance


analysis

Focus groups/interviews with

employees


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2. Case Study A – William Blythe

2.1. Company Overview

William Blythe1 is an advanced manufacturer of inorganic speciality chemicals and an innovator in

technology led solutions for functional derivatives of copper, tin, zinc and

iodine. With significant investment in skills, laboratory, quality control and

development infrastructure the business is progressive and committed to

working in partnership with global clients. The existing expert teams work closely with the clients to

ensure that products and processes are developed under strict confidentiality.

The company was founded in 1845 and gradually the company’s capabilities extended from 5kg

laboratory scale to multi thousand tonne manufacturing plants, resulting in a dynamic and agile

approach. William Blythe operates from Accrinton in Lancashire and Halebank in Cheshire and is a

wholly owned subsidiary of Synthomer PLC2, a FTSE 250 London listed company, with turnover in

excess of £1 billion, focused on water based polymer chemistry.

As a specialist manufacturer for supply into global markets, the company develops functional

materials which:

• Catalyse

• Cross link

• Absorb

• Flame retard

• Smoke suppress

• Heat stabilise

• Resist corrosion

William Blythe operates a continuous manufacturing facility with top tier COMAH (Control of Major

Accident and Hazards) (Sevesco II), IPPC and ISO9001 status. The site footprint, occupying

14 hectares, has a wide regulatory envelope and has in excess of 20,000 tonnes of installed capacity

to allow fast product portfolio expansion and business development on either a contract or

outsourced basis. At the Church site of William Blythe in Accrington the company employs 90

people and has seen significant global growth in recent years.

Research and development focus includes materials for:

• Customised absorption

• Customised catalysts

• Customised dispersion

• Customised cross linking

• Minimal disruption of polymer structures

• Incorporation into difficult substrates (e.g. filaments, fibres, polymers)

Based on the commitment to development, new analytical and development laboratories have

been set-up, along with pilot plant and quality control facilities to support new product

development and scale up. This allows the company to offer scalable test marketing to the clients:

• Laboratory (up to 5kg)

• Pilot plant (up to 5000kg)

1 www.williamblythe.com

2 www.synthomer.com


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• Main plant quantities

2.2. People and Development

The business is driven by the innovation and expertise of the workforce since William Blythe is

continuously investing in the future with 25% of its employees being technical graduates. The

Development Teams have a wealth of expertise and knowledge and are perfectly positioned to

work in partnership with clients to research and formulate unique, bespoke technology led solutions

for a wide variety of applications. Furthermore, a global network of resources with specific technical

and project management skills has been established towards fast and flexible project management

for the clients worldwide (for example in Asia).

The in-house training programme of the company has been structured to deliver:

• NVQ2/NVQ3 qualified operations workforce; and,

• Gold Standard world-class skills.

The company also has an extensive network of academic contacts at national universities with

projects underway at multiple educational facilities. William Blythe has partnerships with,

Loughborough, St Andrews, Bolton and Liverpool Universities. William Blythe is also involved with

the Knowledge Centre for Materials Chemistry (KCMC), which links a number of the major North

West Universities with a particular interest in materials science. In mainland Europe the company

also runs programmes with the German research facility Deutshes Kunststoff Institut. The site has

also received accreditation for ISO 9001.

As a member of the UK’s Chemical Industries Association (CIA) William Blythe is also fully

committed to the Responsible Care programme3, which is the global chemical industry’s unique

initiative to improve health, environmental performance, enhance security, and to communicate

with stakeholders about products and processes. Since its inception in Canada in 1985, Responsible

Care has spread to 60 countries globally, driving companies beyond safety, health and

envoronment (SHE) compliance to higher standards of performance and generating business value.

2.3. Gold Standard Approach

To meet changing market needs William Blythe recognised its business strategy needed to change

from being a commodity manufacturer to becoming a knowledge-based specialty chemical

producer. In order to deliver its strategy, investment in the training and development of its

employees was seen as a prerequisite.

In 2009 with this in mind, William Blythe developed a five-year strategy to up-skill its entire

operational team, using the Gold Standard framework as the model in pursuance of world-class

performance. The company recognised the ‘Gold Standard Model’ would provide a structured Skills

Development framework for its operations team.

Linking the training and development to an accredited national standard was seen as an important

benchmarking exercise by the company, who believed the most effective approach to get employee

buy-in and participation was to start with Business Improvement Techniques (BIT).

William Blythe embarked therefore on a programme to set up 11 cross-functional teams to identify

improvements from their own workplace, collect and present data, problem solve, implement

changes and monitor improvements (i.e. Plan, Do, Check and Act – PDCA, as per Demming cycle of

quality improvement).

3 www.williamblythe.com/corporate-responsibility/responsible-care


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The Gold Standard process/model was designed to be delivered for 54 Operation team members

across the following skill groups over three years:

• Leadership Team

• Process Operators

• Laboratory Analysts

• Mechanical, Electrical & Control Engineers

• Production Support

The programme involved eight classroom sessions for each team facilitated by improvement

specialists.

At the start of each Gold Standard workshop, an introduction to the business strategy focused

specifically on the manufacture of each product line was presented by the Managing Director. This

outlined the market, customers, end use and overall business performance. A summary of the

business performance and how this is aligned to operational performance was also provided,

enabling the operations team to clearly understand their role and where they fit in the overall plan.

The discussion around the key performance indicators (KPIs) provided the means to measure

performance against plans, and in establishing individual accountability for results.

Each team/group completed BIT Level 2, identifying and implementing over 40 improvement

projects. The designated leadership team of 9 also undertook the Institute of Leadership &

Management L3 Certificate in Leadership & Management Skills. Modules were carefully selected to

drive leadership and performance for ‘yourself and others’.

2.4. Impact of Gold Standard

The company were restricted by capacity and concern about meeting end use customer quality

standards, (and the majority of product was supplied via a third party). Problem solving exercises

using the cross-functional teams set up as part of the Gold Standard process, identified the key

actions needed to improve capacity and quality standards. The process and operational

improvements were then implemented.

Sales increased and quality complaints fell as the product succeeded in meeting market

requirements. The product continued to be produced on existing equipment with no additional

manufacturing costs (and only one minor capital expenditure project required.

Gold Standard training – based on an allocated 9 days set aside for individual training for all

employees, focused on further improving underpinning product knowledge, process consistency

and quality standards. Flexibility allowed a wider group of process operators to be trained

improving customer responsiveness. Product variants demanded by the market were swiftly

introduced.

It is estimated that the value of sales between 2009 and 2013 rose by 48%. One customer

complaint was received in the last three years compared to three in the previous three years. The

plant has continued to operate safely during this period.

The Gold Standard has contributed to a wide range of benefits that could be listed as follows:

• A continuous learning approach to developing employees based on the Gold Standard

• Recognised excellence in performance management cascaded from the company

leadership


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• Demonstration of any external accreditations, and support to employees to gain external

qualifications to assist their career development. Individuals are actively encouraged to

progress to higher skill levels as part of their Continuing Professional Development. It is

also essential for the organisation to maintain and develop its skills base, and negate the

negative effect of an aging workforce.

• Proven and sustained attractiveness of the company to potential employees

• Strong ability to retain staff

• A deeper understanding of the manufacturing processes on the site to the wider operations

team. The process has encouraged empowerment and contributed significantly to process

improvements.

• The programme has provided a good quality, effective competency management system

(CMS) that is absolutely critical in ensuring a strong SHE performance by the business.

• Throughout the programme, one of the prime aims has been to capture the business

knowledge and cascade it throughout the organisation. To this end training manuals and

assessment material for each plant and the laboratory have been produced. The content

includes the market the business is engaged in, plant chemistry, unit operations, process

control, and step-by-step measures to maintain quality and manufacturing consistency.

• Collaborative partnerships with Cogent and PAA/VQSET have enabled the William Blythe

Gold Standard model to be “case studied” within their networks to provide the vehicle for

dissemination of Best Practice within the Cogent and Allied Sectors.

Overall, the Gold Standard has been used to demonstrate the Company’s commitment to raising

standards and increasing skills to align its operations with the business strategy. The resultant

increase in process knowledge and skills has created an enabling infrastructure, which continues to

build capacity, provide a continuum for competitiveness and deliver the business objectives.

2.5. Cost Benefit Ratio and ROI

Benefits from participation in the Gold Standard process have been estimated based on estimates

of contribution of Gold Standard related practices to the company’s increased value of sales, from

£23.5 million in 2009 to £34.8 million. The company has also produced detailed records of the costs

of training related to the introduction of the Gold Standard and these were used to inform the

cost/benefits assessment. According to this information, costs of training for Gold Standard and

associated training are estimated to be £277,000 between 2009 and 2013 (or £240,000 netted of any

public funding support received).

Taking into account the contribution of training on the company’s increased value of sales4, it is

estimated that the Cost Benefit Ratio (CBR) of the Gold Standard practices is 1:9 i.e. every £1 spent

to date by William Blythe on Gold Standard related activities has yielded a benefit equivalent of

£9 for the business. This is equivalent to 830% return on the investment made by William Blythe

on Gold Standard related training activities.

The potential return may be higher than these figures suggest, as these estimates do not take into

account sales that will be generated in the future as a result of these improvements nor the impact

of the safeguarded jobs on the whole sector and the local economy.

4 Estimated to be 20%.


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3. Case Study B – Pentagon Chemicals

3.1. Company Profile

Pentagon was founded in 2002 and is a leading UK based chemical

manufacturer of organic intermediates for use in the life science,

petrochemical, and specialty chemicals markets. The company offer a

highly regarded portfolio of sustainable, safe and reliable custom

chemical manufacturing and own products. Pentagon’s main drivers

for growth are based on the existing technologies and the selective acquisition of speciality and fine

chemical businesses. With a heritage in fine and speciality chemicals, and an ownership history that

has included giants such as Shell and Dow, Pentagon was created to build on a platform of

successful product innovation in the pharmaceutical, agrochemical, paper, petrochemical and

photographic industries.

As part of Ascot plc in the late 1990s, the Pentagon business was growing slowly within the

industrial specialties market sector where it had an established position as a custom manufacturer

of fuel additives, a manufacturer of paper sizing agents and a variety of low-value, high-volume

legacy products serving the surfactants and personal care sectors. The opportunity to buyout the

business in 2002 provided a platform to expand into new technology and new market sectors and

create a manufacturing business with a strong and reputable brand in speciality and fine chemicals.

Following the MBO in May 2002, the company acquired Great Lakes Fine Chemicals UK, which had

a long and successful heritage in pharmaceutical and agrochemical intermediates manufacture with

previous owners Shell Chemical and Ward Blenkinsop. The acquisition was completed in late 2003.

At the time of the buy-out in 2002, sales were around £15m per annum. The objective was that in

2013 sales would exceed £50m having established a strong reputation in the specialty and fine

chemical custom manufacturing market. Offering exclusive synthesis and a wide range of own

products the company now has sales of over £40 million per annum and employs around 200

people. Pentagon operates two COMAH (Control of Major Accident Hazards) sites in Halebank

(Cheshire) and Workington (Cumbria) and an Integrated Management System that conforms to ISO

9001 quality management and ISO 14001 environmental management standards.

3.2. People and Development

Chemical businesses operate in an increasingly competitive and highly regulated environment. For

UK chemical businesses such as Pentagon to operate safely, efficiently and compete globally, their

workforce needs to be ‘skilled’ – from senior managers and chemical engineers to production

managers and technicians, and maintenance staff. Staff trained and skilled in business

improvement techniques, efficient use of energy and resources and health and safety compliance

means meeting regulatory requirements but also improving business KPIs, attracting and retaining

a skilled labour force and safeguarding jobs and the future of a company.

The company has used Standard Operating Procedures (SOPs) and NVQs since early/mid 90’s in

order to:

• Improve skills

• Improve Safety

• Make things uncomplicated

• Add value


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• Eliminate waste/wastage

• Engage the workforce at all levels

As part of its Skills Improvement drive, the company put in place the following tools:

• Full time Training Assessor based at Workington since January 2005 and at Halebank since

April 2011.

• Cogent Gold Standard.

• National Skills Academy assessed external training providers.

• In-house developed Competence database with clear records and in-house training – based

on a the following approach:

• NVQs that could be accredited/qualified as part of the Qualifications Curriculum Framework

(QCF)

• 6 shift system at both Workington and Halebank

Within this context the top training priorities for the company in the last 3 years have been:

• Gold Standard

• Operator competence

• Accident, Near miss and NCR

• Process Safety awareness

• MARA

• Hazop/Process reviews

• Continuous Improvement

The company attends a range of events for expanding its professional relationships and network

around Europe and worldwide. Some of these events are the Fine Chemical and Pharmaceutical

main event of the year, CPhI Worldwide in Frankfurt as well as the CPhI Japan in Tokyo where the

company had the opportunity to build upon existing customer relationships and to establish new

ones.

Assessment of Competence

Standards

Train

Reinforce

Audits Internal & External

Internal & External

Train & Assess to Standards

Competence Re-Assess to

Standards

Manage & Supervise


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The company also has forged a number of project specific and Knowledge Transfer Partnerships

with Universities including a recent one the University of Strathclyde Department of Chemical and

Process Engineering by the West of Scotland KTP Centre.

3.3. Gold Standard Approach

Adoption of Gold Standard has meant:

• Competence Improvement Plan in place including in-house developed competence database

with clear records.

• Business Improvement Techniques and teams in place.

• NVQ level 3 completed by all shift managers and team leaders.

• All teams undertaking training, with a minimum of 10 days of training per person per year.

• Having a full-time training assessor on site.

The figure below depicts the company’s approach/key elements of skills and competences

improvement driven by the Gold Standard process:

3.4. Impact of Gold Standard

As a result of this systematic approach to skills’ improvement, a number of company KPIs were

improved including:

• Reduced high COD aqueous waste

• Reduced Water Consumption / Effluent

• Reduced Energy Consumption

• Reduced Yield / Waste Reduction (BnOH)

• Product Sample Drainings Recovery (P68)

• Reduced High COD Cost

• Reactor Clean Out (Time & Effluent Reduced)

• Skips (Recycling & Reduced Frequency)

• Reduction in laboratory Condenser Water

High OEE%

Visible Safety Culture

Everyone knows key customers

Pentagon's Approach to Skills Development Continuous Improvement through employee engagement

Visible Cost Reduction Plan

BIT NVQ’s

Competence improvement plan

GOLD STANDARD

Full Time training assessors

Communication

Ensuring essential Process Safety information is

passed on Technical

Competence

Technical Competence

Compliance

Functional & Behavioural


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All these resulting in significant improvements in Overall Equipment Effectiveness (OEE) as shown

in the diagram below and savings of around ¼ million per annum in Maintenance Costs (parts &

labour).

Source: Pentagon

Additional qualitative benefits have included:

• Change in the company culture and improved understanding by all employees of the

linkages between every day operations and key business indicators such as company sales

volumes and turnover.

• Improved morale among employees and retention of key staff.

The Figure below summarises the whole Gold Standard process for Pentagon and the benefits and

impacts that have emerged to date.

3.5. Cost Benefit Ratio and ROI

Benefits from participation in the Gold Standard process have been estimated based on savings

accrued by the company as a result of the Gold Standard related practices. These are estimated to

be attributed entirely to the Gold Standard related practices and stand at £1,246,000 to date. Costs

calculations are based on information provided by the company for relevant items as listed in

paragraph 1.2 in the Introduction of this report and review of relevant company documentation.

Costs associated with Gold Standard associated training are estimated to be around £130,000.


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The Cost Benefit Ratio (CBR) for Pentagon is estimated to be 1:9.5 i.e. for every £1 spent on

training based on Gold Standard by Pentagon, there is a benefit of £9.5 for the business. This is

also equivalent to approximately 850% return on the investment made by the company on this

training.

Again, it is worth noting that these calculations do not take into account any impacts that may be

generated in the future as a result of improvements put in place as part of Gold Standard.


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4. Conclusions

The Cogent Gold Standard offers a framework for development of competences and skills needed

by companies and the sector in order to improve business competitiveness and performance.

There is a wealth of research that suggests there are significant links between people

management/workforce development and business performance. Research has shown that training

in particular can lead to:

• Increased productivity and quality of work

• Increased sales/turnover

• Reduce staff turnover & absenteeism

• Increase cust0mer satisfaction

Calculating the impact of training on business and the ROI is a practice of modern management

that enables a company to undertake a diagnostic but also predictive assessment of businesses

initiatives adopted over time. It can also demonstrate to external sponsors of these initiatives their

added value and difference made through their investment.

The purpose of this study has been to assess and quantify the actual impact and return on

investment for companies that have adopted the Cogent Gold Standard. The rationale

underpinning the studies is depicted in the diagram below.

Figure 4.1: Capturing ROI from Training/Gold Standard

The study has found that the Gold Standard associated training has yielded considerable qualitative

and quantitative results for both companies that have been part of this study. These have included:

• Improved Overall Equipment Effectiveness (OEE);

• Significant contribution to new/improved sales and turnover;

• Significant savings in resources and production costs;

• Significant savings in labour/human resources management costs;

• Improved product quality and less wastage;

• Improved customer satisfaction;

• Improved staff morale; and,

• Positive changes in company culture and understanding by all employees of the linkages

between their work and the overall company performance.

Record business training on the

Skills Passport

Identification of training solution

Gap analysis

Delivery through

accredited

provision

Training

needs assessment

Competency

Management Business Impact

� KPIs � Skills � Productivity

� Competencies

Return on

Investment Assessment

Assessment of � Gain from

Investment � Cost from

Investment � Potential Benefits (Savings/

Income

Generation)

GOLD STANDARD IMPACT ROI TOOL


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Quantification of costs and benefits for each company has shown that adoption of Gold Standard

practices can yield relative high Cost Benefit Ratios i.e. 1:9 and 1:9.5 for each participating company

respectively and significant returns on investment.

It is important to note that the study represents a first attempt/pilot to quantify the impact of the

Gold Standard approach on companies’ performance and is based on discretionary information

and data provided by only two companies. Therefore:

• Any comparisons between the two companies should be avoided as the calculations are

based on different sets of information for each company.

• The findings from the two case studies may also represent best-case scenarios as they

represent companies that are at the forefront of workforce development and upskilling

practices.

• Within this context, grossing data up to sector level data should be avoided at this stage as

further examples of companies i.e. a representative sample of companies, will be needed to

enable collection/collation of a sufficient volume of data to feed into a robust analysis and

also test the impact of Gold Standard on different company contexts.

It is worth noting that establishing robust evidence on the causal impact between investment on

training/Gold Standard and business performance at business and sector level is a very complex

exercise that may require considerable time and resources from the companies involved.

Gold Standard ROI report

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