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In a business downturn, employee training may be the first budget to be cut at a small company. But the right training has the potential to have a dramatic impact on a company's bottom line, and a program that raises the level of employee engagement can help retention.

With so many other priorities, small employers are unlikely to spend the time and resources to study their training's return on investment. So how can they make sure their training dollars are well spent?

WSJ.com spoke to Jack Phillips, chairman of ROI Institute Inc., a consulting firm based in Chelsea, Ala., that shows companies how to measure their return on investment in human resources and other business areas. Here are his tips for small businesses to help ensure they get a good return on their training spending.