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Measuring the ROI of Learning and Development Programs

You’ve poured countless hours into a new program and feel more prepared than ever to launch. It looks beautiful. You’ve tested it a million times. And you’ve gotten positive feedback from your peers already.

So you take your boss through the high-level plan one last time, thinking they’ll give you the go-ahead without a second thought.

But instead, they say, “Well, what kind of results are you expecting with this?”

Your heart drops into your stomach. Defeated, you go back to the drawing board.

Feel familiar? We thought so.

Today’s L&D professionals have one of the most thankless jobs in Corporate America. Yet their roles directly contribute to the success of enterprise organizations. And in times of economic uncertainty, getting higher-ups to connect the dots is even more critical.

But doing that is easier said than done. So to give you a headstart, we’ve put together a guide that walks you through five ways to maximize and publicize ROI across your organization.

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5 Strategies to boost and prove L&D ROI

L&D professionals are at a crossroads: figure out how to prove the merit of corporate training or lose budget, team members, and clout.

But how is that possible?

Before we dive into some actionable tips, let’s review what ROI is. The most basic formula for calculating ROI is:

L&D ROI = (L&D Benefits – Cost of L&D) / Cost of L&D x 100

In the simplest terms, you’re looking at the gross benefits of your programs (L&D Benefits - Cost) in the context of the total cost. A high L&D ROI percentage means that the benefits of your program outweigh what you’re spending to create them.

A low ROI could mean that: (1) employees aren’t benefitting as much as you thought or (2) you’re likely spending more than you should. This means we have two main levers to pull: increasing benefits and decreasing costs. Below, we’ll outline 5 ways to move those levers in the right direction.

1. Focus on the upper levels of the Kirkpatrick Model to maximize results

If the Kirkpatrick Model wasn’t the first thing you learned about as a Learning & Development professional, it was probably the second or third. The Kirkpatrick Model has been the trusted paradigm for learning for decades, teaching us that learning will always happen in stages.

You need someone to react and engage with your material in order for them to finish it. You need them to finish it to adjust their behavior. And you need them to alter their behavior to see any organizational impact.

Despite the fact that most learning mechanisms are built with the Kirkpatrick Model in mind, they never make it past the point of engagement. The average program suffers from 90% dropoff in retention after 30 days, making it near-impossible to validate any behavior change, let alone impact to the company at large.

So, how do you work your way to the upper echelon? By:

  1. Removing as much friction as possible
  2. Embedding reinforcement into your learning model
  3. Promoting learned behavior with expertly timed nudges
  4. Hone in on metrics that matter (stay tuned for more information on this in #3)

How to do it

Hitting all four of those milestones listed above will take some rethinking and reformatting. Find ways to:

  • Decrease training length and volume.
  • Deliver training in tools or devices they already use, like mobile phones.
  • Framing education in day-to-day context to make it more pragmatic.
  • Support memory and recall with spaced repetition.

2. Go fully digital to save time and money

Talk to anyone who worked in the consulting industry before 2020, and they’ll tell you about how they spent their first week of work at a training center somewhere in the Midwest. In theory, these trainings promoted camaraderie, acquainted people with company culture, and standardized learning across practices and disciplines.

But over time, the Big Four began to realize how cost-inefficient that training really was. They had to pay for:

  • Transportation
  • Airfare
  • Hotels
  • Venues
  • Catering
  • Speakers
  • Equipment

According to Forbes, even a small, one-time, in-person training event can cost $40,000. And the impact of in-person sessions doesn’t outweigh that cost. For example, an average adult has a maximum attention span of only 20 minutes — far shorter than most training sessions. Research also shows that people tend to forget information when it’s crammed into a short timeframe

Going digital can eliminate the high costs associated with in-person learning and meet learners where they are: on their devices. With digital tools, you can offer bite-sized content in the flow of people’s work, such as:

  • Brief readings or written responses
  • Interactive quizzes to help with recall
  • Videos presenting information visually
  • Nudges to apply learnings and report back on their success

This kind of “microlearning” pays off, improving learners’ focus and retention by up to 80%.

A learner leader at Bon Secours Mercy Health shared that, “Text message learning allows us to push learning to our associates when they need it most, and where it is most accessible – right on their mobile device. They add, “The technology is easy to use, saves us time from complicated designs and delivers a big impact. We are continuing to find ways in which text message learning can transform our learning culture.”

How to do it

If you don’t have a learning tool, find a solution that:

  • Helps you create, launch, and iterate on your learning and development programs quickly.
  • Has built-in nudging capabilities via SMS, email, and messaging systems like Slack.
  • Has a native course marketing engine and an intuitive content library.

If you already have L&D software:

  • Create templates to speed up the content creation process and reuse the learning techniques that seem to work best.
  • Tag your content effectively to avoid rework.
  • Add approval workflows to increase speed to launch.
  • Leverage generative AI to get a head start on your content, then edit with a fine-toothed comb.

3. Monitor better metrics to demonstrate strategic value

If you’re like most L&D folks, you want your peers to know the blood, sweat, and tears that went into your launches. Those late nights, stressful deadlines, and painful user testing sessions have to mean something, right?

While fellow L&D practitioners are vigorously nodding their heads in agreement, the reality is that your boss or CEO may not care about the effort you put in. Their chief concern is getting their money’s worth. They’re asking themselves:

  • Is the L&D team spending time developing coursework that matters?
  • Are my people actually learning what they’re supposed to?
  • Are employees getting better at something?
  • How are learning programs contributing to the bottom line?

And traditional corporate learning metrics like "time spent learning" or "number of attendees" don’t reflect true change in employee behavior or performance.

Although these KPIs might be easier to measure, they don’t mean as much in the grand scheme. So refocus your goals and objectives to drive the outcomes that matter.

Rob Lauber, former CLO at Mcdonald's, Yum! Brands, and AT&T says, "Your metric choice should be dependent on the program being evaluated.” He expands, “For example, I ran a test on digital literacy and product knowledge and compared it to sales. We had launched to learners in a small pilot, and we saw an increase in sales. The ROI metrics were used to accelerate a deployment timeline from 18 months to 6 months to over 10,000 learners."

How to do it 

  • Brainstorm new KPIs that resonate with leadership. Ask yourself what could tie back to revenue — things like productivity, cost savings, time efficiency. Here are some ideas to get your juices flowing: 
  • Product adoption rates
  • Application of new knowledge
  • Decrease in security and compliance incidents
  • Talent mobility (reskilling, upskilling)
  • Confidence lift
  • Time to launch
  • Customer service satisfaction rates or NPS scores
  • New hire onboarding satisfaction rates
  • Employee retention
  • Manager satisfaction rates
  • Track these metrics on a regular basis so you can show incremental change. More on that in #5.

4. Share metrics widely and often to underscore L&D significance

At an Arist workshop, we asked attendees to come up with a compelling ROI presentation based on a real course dataset. Although there were numerous CLOs in the audience, an engineer — someone with no L&D experience — gave the most convincing presentation. Whomp whomp.

But is that really a surprise? Chances are that you’ve presented to leadership in a QBR and their eyes glazed over. Or worse, people acted surprised to learn that your training strategy is working. While that’s better than negative feedback, it reveals that execs were skeptical about your program’s efficacy.

L&D isn’t always at the forefront of the C-Suite’s minds. Flashier marketing, sales, and product initiatives often get more airtime because of their tight connection with revenue.

But we all know that L&D can have a huge influence on revenue — upskilling staff can lead to greater curiosity, productivity, innovation, and collaboration. You just need to boost leadership’s confidence in those facts. And the way to do that is to hammer home ROI as often as possible.

The more people see the impact of learning and development, the more they’ll believe it. So don’t let your QBR deck be the first time leadership sees your metrics. Find ways to humble brag. Weave metrics into your storytelling. Share your metrics cross-functionally. Make the impact of learning come to life with employee quotes or anecdotes from their manager about how much their skills have improved.

How to do it

  • Create a slack channel for L&D wins, invite leadership to it, and post relevant updates each week.
  • Ask to share a slide or two in company or department All Hands meetings showcasing the benefits of your last L&D campaign.
  • Request a slot in your internal company newsletter to share L&D ROI.
  • Spotlight employees who have embraced L&D at your organization and highlight the tangible results they got out of it. This could be in video or written form shared on internal and external channels. Remember: clients like to know they’re supported by skilled people!

5. Pivot quickly to avoid obsolescence

We’ve all taken that course where actors are wearing clothes from the 90s, technology looks like it came from the stone age, and cyberattackers are wearing sunglasses and black hoodies. These sequences produce nostalgia in Gen X-ers, the occasional laugh from your Millennial employees, and leave Gen Z-ers wondering, “what the heck is on-prem”?

No party is taking the actual content seriously.

Although it may not be as pronounced, this problem happens when organizations publish unrelatable sexual harassment training, outmoded leadership courses, or use outdated product and sales playbooks in employee onboarding.

The problem is that many L&D orgs have low data throughput, meaning they don’t have the analytics to justify pivoting their content in a timely manner. The typical quarterly assessment may show you that a certain course needs updating, but by then, it’s probably too late — a majority of the employees have already finished it.

The truth is, products, regulations, and priorities change all the time, and your learning curriculum has to be able to keep up.

As discussed in strategy #2, going digital can help you deploy new programs faster. That has the added benefit of dramatically increasing the volume of learner data you collect. From there, you can more easily (and quickly) determine what is working, what isn't, and how learning is actually being applied.

Shifting to more of a “continuous learning” model puts the point of measurement closer to the ground, allowing you to make data-driven decisions that accelerate your ROI.

How to do it

  • Use an L&D tool designed with continuous learning in mind. It should be easy to push out edits in real time, collect learner data, and interpret it in a robust analytics backend.
  • Review key KPIs every month (or even more frequently) and identify programs that are lacking in content, frequency, and relevance. You might even set thresholds to alert you when a KPI is dropping so you can fix it ASAP.
  • Organize monthly office hours where managers in any department can share their feedback regarding their direct reports’ performance, gaps in training, and ideas for new courses that should be offered.

Build a learning outcomes-focused culture with Arist

It’s every L&D leader’s dream to have an endless budget. But we can’t always get what we want.

Luckily, there are ways to get what we need. Being smarter about how we measure and demonstrate ROI using modern tools and cross-functional strategies can get everyone more excited and engaged with learning, creating a learning-application-outcomes flywheel. And when the whole company wants to get involved in something, it becomes more of a clear priority to leadership. The first step is picking the right learning tool.

Enter Arist, the microlearning platform that enables quicker iteration, more salient reporting, and higher engagement than any other L&D solution on the market. Trusted by EY, SAP, Axon Health, and DuPont, Arist produces substantial lifts in confidence, product knowledge, and soft skills through tools and devices employees already use.

Think you’re ready to take the leap? Make the case for Arist using our ROI calculator, or request a demo to see the power of microlearning firsthand.

The ROI of Learning and Development [Infographic]

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ROI is an important metrics for measuring the impact of L&D — but calculating true ROI is more than just a numbers game


The Economics of Corporate Learning

Learning and Development is the most / direct route to aligning capabilities to business goals

  • Millions of employees complete learning and development programs every year, including courses on:
  1. Compliance: 70%
  2. Soft Skills: 51%
  3. Upskilling: 50%
  4. Product Training: 39%
  5. Onboarding: 36%
  6. Reskilling: 36%
  • And in the wake of COVID-19, companies are investing in training more than ever 
  • In 2022:
  1. Small Companies (100 – 999 employees) invested $1,400 per learner 
  2. Midsize Companies (1,000 – 9,999 employees) invested $826 per learner 
  3. Large Companies (10,000+ employees) invested $1,700 per learner
  • Today, measuring the ROI of L&D is critical to tracking impact — especially when it comes to revenue and profits over a given year
  • But new metrics are also worth consideration, including:
  1. Increased sales due to training
  2. Greater employee confidence in role
  3. Lower employee churn and higher engagement
  • And pre-COVID metrics are less likely to matter
  1. Number of people who attended a training
  2. How many people traveled for professional development
  3. Percent of employees who completed a webinar

Just 8% of L&D teams calculate their ROI, meaning 92% of L&D programs don’t have success metrics attached at all

Calculating The True ROI Of L&D In 2023

  • The original formula is simple: ROI = (L&D Benefits – Cost of L&D) / Cost of L&D x 100
  • But calculating an honest return for your organization can be challenging, especially when looking at less specific metrics
  • First, we need to understand expenses:
  • Time
  • It can take between 55 and 177 hours to create just 20 minutes of corporate learning
  • Effort
  • Employees may need to sacrifice valuable working time to complete traditional courses
  • Companies spend up to 71 hours of training per employee — which is a sunk cost of $1,065 per employee based on a salary of $15 per hour
  • Money
  • The average in-person training session can cost up to $40,000 
  • Includes other tertiary costs like:
  • Transportation
  • Hotels
  • Venues
  • Catering
  • Speakers
  • Equipment
  • Plus, online or alternative models aren’t always cheaper
  • Here’s what common platforms cost per 1,000 learners:
  • Content Library (LinkedIn Learning): $180,000
  • Course Authoring Tool (Articulate): $120,000
  • Communication Tools (FirstUp): $96,000
  • Third-Party Consultants (Variety): $96,000
  • LRS (Watershed): $48,000
  • Course Marketing Tools (Mailchimp): $24,000
  • Next, we need to know how much L&D increased employee ability
  • Unfortunately, most employees aren’t happy with their outcomes
  • 25% forget what they learned almost immediately
  • 24% say their training isn’t relevant to their role
  • 21% say their training content is out of date
  • And organizations feel they don’t have what they need
  • 35% of organizations say they lack access to the right training content
  • The result?
  • Only 10% of the money spent on traditional L&D delivers any tangible result for companies
  • And ineffective training costs $13.5 million per 1,000 employees
  • That’s $1,350 per employee
  • But that doesn’t have to be the end of the story. . .
  • The second route to ROI is tracking your increase in revenue
  • Studies show that for every $1 spent on L&D, revenue increases by $4.70
  • You just need to find the right tool for the job

To effectively measure your L&D ROI, you need to acquire a corporate learning program with purpose, accessibility, and science-backed content

Creating And Measuring Corporate Learning With Arist

  • Arist: a science-backed microlearning platform designed to meet learners where they are
  • Used by 15% of the world’s Fortune 500 companies
  • Can help you measure ROI through revenue by attaching value to modern KPIs
  • Confidence lift 
  • Frequency of application
  • Qualitative application of knowledge
  • Internal mobility
  • Employee retention
  • Costs less:
  • Time
  • Takes 2 to 8 hours with Arist to create ‘push’ microlearning — up to 195.% less time than traditional methods
  • Takes just 5 to 7 minutes for employees to complete
  • Money
  • Annual estimated cost per 1,000 learners: $96,000
  • Annual savings of $480,000 on average
  • Energy
  • Can save L&D teams up to 82% on course creation and delivery
  • Boosting ROI and revenue in multiple ways
  • Employees feel 30% more confident in performing their roles
  • Increases the adoption of learning by 90%
  • Increases the speed of learning creation by 95%
  • And reaching learners around the world
  • Madagascar
  • Kenya
  • Sudan
  • Venezuela
  • Peru
  • India
  • Nigeria
  • Sierra Leone
  • Learners love us, too
  • Average NPS of 79 on a -100 to 100 scale
  • Compared to just 41 for the average SaaS
  • And -24 for learning management systems

Use the Arist ROI Calculator to measure your L&D ROI in minutes

Sources

https://www.arist.co/post/how-long-does-it-take-to-develop-corporate-learning

https://www.statista.com/statistics/795795/training-expenditure-per-learner-and-company-size-us/ 

https://www.arist.co/post/microlearning-research-benefits-and-best-practices#infographic 

https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/Documents/2022%20Workplace%20Learning%20and%20Development%20Trends%20Report.pdf 

https://www.chieflearningofficer.com/2020/06/05/ld-in-covid-19-and-beyond/ 

https://www.arist.co/post/how-long-does-it-take-to-develop-corporate-learning 

https://wdhb.com/blog/the-evolving-world-of-roi-for-learning-and-development/ 

https://arist.notion.site/arist/Nowsourcing-brainstorm-37ecd7d5415045fd88984dd9d1a8ae3e 

https://arist.outgrow.us/arist-roi-calculator 

https://www.forbes.com/sites/danpontefract/2019/09/15/the-wasted-dollars-of-corporate-training-programs/?sh=6135905671f9 

https://www.arist.co/ 

https://assets.website-files.com/6174a877844b8dbebd2230ae/63515de7a7f6d82309489b94_Arist_whitepaper_.pdf?__hstc=216970441.b38b581ee063f0925c6e07cad9ea6200.1680612669519.1680612669519.1680612669519.1&__hssc=216970441.9.1680612669519&__hsfp=3000179024 

https://hbr.org/2022/07/build-learning-into-your-employees-workflow 

https://www.statista.com/statistics/795813/hours-of-training-per-employee-by-company-size-us/ 

https://teamstage.io/training-statistics/ 

https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/deloitte-au-dae-business-return-learning-development-070922.pdf https://www.arist.co/post/the-l-d-metrics-leaders-need-to-know-and-how-to-measure-them-in-2023 

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