A recent study by The Learning and Performance Institute found that measuring ROI and learning impact is one of the top five challenges faced by learning and development leaders. But why does it matter and why is it such a challenge?
In early 2020 Covid-19 tore up the rulebook and thrust HR and L&D into the spotlight. It was no longer ‘business as usual,’ relying on live training and ‘on the job’ assistance from colleagues to pick up the slack. L&D was exposed and charged with delivering impact on employee engagement, productivity, and performance in a remote, digital world.
And a learning culture matters: not only do businesses with a strong learning culture enjoy better employee engagement but also retention rates around 30-50% higher than those that don’t. According to Robert Half, UK “employee turnover has significant consequences on workplace productivity and growth”.
This is exacerbated by the skills shortage: as organisational awareness of the skills Sahara deepens, the business focus sharpens.
This all leaves many learning professionals facing the question; “How do I prove that our L&D strategy is providing value?”.
The answer? You guessed it… Data.
Taking the first leap into achieving learning with a measured business impact can be somewhat daunting. However, rest assured – it doesn’t have to be. Breaking the process into component parts and tackling each in turn allows for a simple and streamlined model.
The very first thing to consider are the areas of focus for the business as a whole in order to ensure the learning goals are aligned with organisational ones. So start by considering the questions “What do we want our people to do better or differently?” and “How will we know they are doing it?” These are the keys to identifying tangible behavioural outcomes, allowing you to understand the data points that need to be measured and, on a practical basis, how they can be captured.
Only once you’ve defined the behavioural change that you wish to see, and how you’ll know it’s been achieved, can you then look to begin measuring impact.
Understanding your metrics
There are various different metrics you can look at when trying to determine whether an L&D course has been effective. Some may include analysing customer service satisfaction ratings, employee engagement scores, change in performance appraisal ratings, turnover or productivity. You may choose to set these metrics against industry benchmarks, your own goals or both.
So if, for example, you want to improve your customer service scores, the training could focus on developing workforce customer-engagement techniques and then measure the impact on hard business metrics, such as sales or conversion rates. Selecting the right metrics, both before and after training, enables you to show how training has benefitted your employees, your customers and the bottom line.
Examining your data
When it comes to looking at the data, your ROI analysis should include several strategies for differentiating the effects of training. If you’re trying to determine whether your training was effective, you might compare pre- and post-training results. You might then compare your own post-training results against an organisation with similar characteristics, such as industry sector or size.
Calculating ROI means capturing survey responses not just directly after training but over the next few months when participants have had the chance to apply what they have learned in real working situations. By building this evaluation process into the very foundation of every learning initiative, you receive ongoing formative feedback on overall effectiveness, allowing you to catch any improvements early and adjust as needed.
In many instances, qualitative information is incredibly valuable and can carry as much influence as quantitative data when presenting a business case to stakeholders. Most people think of ROI solely as a numbers game, but qualitative comments can be just as useful and provide unique insights that you would miss otherwise. When crafting a ROI strategy, you should consider identifying the non-numerical aspects associated with assessing a training program’s effectiveness too. This can be done through 1-to-1 interviews, focus groups, questionnaires or surveys.
Feedback is crucial and integral to understanding a true picture of overall success.
Practical ways of capturing qualitative data can be through polls launched straight after learning completion, as well as spaced out after the learning to track whether the skill or behaviour change has been embedded. But don’t overlook social learning initiatives – either directly housed on your LMS or perhaps utilising external services like Yammer. Social learning provides unique insights into whether learning concepts have been truly embedded as well as displaying how individuals are engaging with the learning subject matter and topics over time.
Applying your research!
But once you’ve outlined what you want to achieve, how you’re going to measure it and what infrastructure you need place to do so… what comes next? Ultimately, without examination, analysis or understanding, data is meaningless.
To secure the resources it takes to create or maintain a robust L&D strategy and deliver on expectations, you will need to clearly display the value of the investment to leadership. This means taking all of the metrics, data and reporting we’ve discussed and using it to create a story that speaks directly to what executives care about the most – business growth.
There are various ways in which you can do this. Primarily, you’ll need to show how performance was improved by upskilling or reskilling initiatives and set those rewards against the risk and cost of external recruitment – if you are able to find anyone, that is. As well, highlight the critical skills gap among your current workforce, the long-term cost on your business of that and how your programs address the issue. Also showcase the increase in employee engagement, productivity and retention that results from learning participation. Combined, these metrics and analysis establish and quantify the connection between L&D and increased business growth.
Above all, it’s important to set realistic timing expectations. Other business functions have more straightforward metrics, yet L&D is dealing directly with people and their ability to learn and develop. This takes time. Plus no two employees start their learning journey in the same spot. Every employee has unique professional experiences and a varied educational background. Make it clear that L&D results can take months to come to fruition, and set short-term indicators you can report on in the interim.
It’s essential to ensure your training provides value for money. Although determining and expressing the benefits, value and ROI is not always simple, it’s far from impossible! What we have covered in this article gives you a model for determining whether your online learning programme is worth the investment, but if you would like to learn more then check out our recent talk at the Learning Technologies 2022 event here.