Employee learning programs cost money. Understandably, organizations look for the ROI on their L&D programs and LMS.

Nonetheless, it is possible to measure the impact of learning in your organization. It just might require a new take on some KPIs.

Here are key points of consideration for calculating the ROI of training.

Measure Correctly to Improve Impact

One of the granddaddies of modern management, Peter F. Drucker famously said, “What gets measured gets improved.”

Indeed, one of the biggest mistakes in any L&D program is a failure to measure the impact of learning.

Of course, any LMS administrator will balk at that statement and immediately point to some KPIs--training hours done, mandatory attendance statistics, even post-event survey statistics. People liked the coffee!

Those points are excellent information for administrators, but they do not measure implementation of knowledge gained or ROI on training.

Consider it a communication breakdown between what data you need if you administer a program (like successful training steps completed), versus what an organizational objective might be (such as a reduction of customer churn).

Aligning with Organizational Objectives

Of course, some forms of training are easier to measure than others.

Onboarding, for example, may easily run an employee through a checklist of mandatory courses. But even that onboarding experience is much more effective when tracked with metrics related to performance.

Yes, new employees read their employee handbook. Were they spot checked on it? Did they implement policy from it? What evidence do you have of learning? Does the training program help learners apply new skills on the job, by their own post-training assessment?

Such questions involve a more holistic learning approach.

Building KPIs around training might then include a cumulative look, best summarized in these 4 steps:

1. Organizational objective clearly named.

2. KPIs assigned to each objective (what will that objective look like in terms of organizational change?).

3. Each individual who contributes to that key performance indicator then gets a sub-category KPI.

4. The learning program aligns with these performance metrics (sub-category KPIs).

Realigning course objectives around organizational objectives (often named quite broadly), improves specific learning targets.

Where Learning Gets Stuck, Adjusting Learning Measurements

A learning measurement framework, as described above, which fits organizational objectives, will still run into implementation difficulties, at times.

L&D can analyze and readjust training experiences for these common difficulties:

• LMS or platform ineffective - Users do not understand or cannot easily utilize LMS.

• Learning materials ineffective - Materials feel irrelevant to user, or by identifying common course dropoff points, program weaknesses identified.

• Study reward system not in place - Users do not receive adequate progress reports, course feedback, or course intervention for effective learning progress.

• Post-learning system not in place - Peer measure, self-measure and/or manager-assessed post-learning feedback not being utilized to adjust training materials.

Effective L&D is a living, breathing, adaptable program. When learners themselves see the impact of their study on job performance, they better contribute to organizational objectives. This “learning magic” really only occurs when study is fun, and when the skill checks and practice of courses align with actual job scenarios.

Indeed, this puts the pressure for training on your L&D team. Yet it creates measurable results.

Human Capital, an Irreplaceable ROI

As technology improves what remains irreplaceable is human capital.

Effective learning programs create job stability, longevity (lower employee turnover), and international competitiveness.

In environments where study and training have become habit, team members ask questions, try new procedures, seek out additional information and contribute not only toward organizational success, but organizational innovation.

Truly, adaptability in the 21st century global marketplace is the real ROI of learning.

   

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