Morgan Burn, principal consultant at OnTrack International discusses ROI for L&D.
Every business wants a return on its investment (ROI) in learning and development (L&D). Ascertaining tangible results is not always straightforward, though it is essential to demonstrate the effectiveness and value of training initiatives and, crucially, to secure continued buy-in from senior decision-makers. Measurement doesn’t necessarily need an extensive process to be meaningful, but it does need to speak the language of business to resonate with the right people.
Here are five steps that can make a notable difference.
1. Aligning ROI for L&D with business objectives
L&D can struggle to get visibility in the boardroom, sometimes because L&D professionals have not spelt out the business case for their initiatives. They may celebrate small changes or “lightbulb moments” as positive outcomes, while senior executives often want a tangible business impact. Both are valid, but it’s important to ensure that results can be evidenced and attributed back to the L&D initiative.
At the outset of any L&D programme, it is crucial to understand what success looks like. The answer to this question may vary depending on the job role of the person you are speaking to. Although the ‘overall desired output’ can take centre stage on the podium, the real successes need to be captured in a multitude of ways during the intervention. Often there isn’t a clear cut date in which all objectives are met for everyone involved. Organisations need to craft ROI for L&D measurements around the initiative. Applying milestone reviews to measure behavioural change is much more effective than catch all objectives.
Business objectives can vary. For instance, “we need to reduce the attrition rate in the first six months of people joining” or “we need to reduce the cost of recruiting people into senior leadership roles”. All of these have an L&D solution to them.
For example, we helped an international banking and financial services client achieve a 600% increase in high performing employees, reduce absence days by 19%, decrease staff turnover by 10% while achieving a combined saving of over £110million. The L&D response included the implementation of a new selection process, alongside workshops around interviewing and induction skills.
Importantly, objectives should be specific. Improving employee performance, increasing productivity, or enhancing skills, are all great aspirations, but what tangible business goal are they there to support? Understanding this at the outset will impact how your approach measuring ROI for L&D.
2. Kickstart the process before training begins
To truly understand the impact of a programme, it’s beneficial to collect insights and data both before and after training has started. The set-up is as important as the result.
L&D must liaise closely with business stakeholders at the outset to ensure metrics reflect both business and learning objectives. So, for example, alongside conducting employee self-development surveys before the programme begins, also track data relevant to the specific business issue, such as retention or attrition, for instance.
Ultimately, there is no point in reporting metrics to the business if management has no idea what they mean. Understanding the measurables that are most important to the business, and then aligning them with key indicators of the L&D process, creates a powerful story.
3. Look at both short-term and long-term ROI for L&D
For example, those facing a restructuring may focus training on resilience, or those going through an integration may focus on teamwork and collaboration. Taking a tactical approach is necessary at times. But a more strategic approach considers what will be important in the future.
For example, one OnTrack client was keen increase market share through the relationship-building of client-facing individuals. We proposed a project that might reduce the initial three-month figures, but from then onwards, would recover and surpass the share they currently had to move toward the target.
It requires an adventurous and brave approach from a business to do this, but the rewards are greater in the longer term.
4. Make use of tried and tested methods, but don’t rely on them
Various frameworks are available for assessing L&D. Perhaps the most popular is the Kirkpatrick Model. This internationally recognised model consists of four levels of evaluation: Reaction, Learning, Behaviour, and Results.
Each provides insights into different aspects of training effectiveness. However, it’s worth noting that whilst the likes of Kirkpatrick and others have an important role to play, they can seem less relevant to those outside of L&D who are more likely to engage with methods that they already use and are familiar with or present a compelling business case.
Other frameworks, such as the Net Promoter Score (NPS), are also popular, yet also highlight the limitations of relying on one framework. For instance, NPS relies on a single question to gauge satisfaction: “On a scale of 0 to 10, how likely is it that you would recommend this product or company to a friend or co-worker?”
While this offers a quick measurement tool, interpreting the scores can be tricky. “Eight out of ten” might be seen as positive by most, but is considered a “passive” score, indicating the respondent wouldn’t recommend the trainer. As with any framework an understanding of the process is vital.
5. Qualitative and quantitative insights
While quantitative data is valuable, relying solely on numbers also has its limitations.
To get balanced insights, L&D professionals also need to talk to those involved in the training process. When gathering feedback, they must ensure questions are unambiguous. Make it clear that the evaluation process benefits the learner as much as the business. This psychological aspect can increase participation and engagement.
Equally, pairing frameworks like Kirkpatrick with real-world observations, such as 360-degree feedback from managers, can provide a more comprehensive view of training impact. This also includes external industry methods which can give you a benchmark across a wider pool therefore giving a valuable perspective.
Most importantly, measuring ROI for L&D is not just about numbers. It is about transforming individuals and organisations for the better. It is about capturing the journey as much as the output.
OnTrack International frequently helps global organisations overcome complex business challenges using a people development solution to deliver business results now, and to develop employees to maintain the results long into the future. For more information, please Contact us on how to develop your people and teams.
