In the world of Learning and Development (L&D) professionals, proving the value of corporate learning is crucial to secure budgets, maintain team members, and enhance their influence. Most of this value is proven through return on investment (ROI), which is a number that is derived from looking at the gross benefits of the program in context of the total cost. A company’s goal should be to maximize the ROI of corporate learning as much as possible.
A low ROI means that either employees are not benefitting as much as previously thought or the company is spending more than they should on L&D. A high ROI means the benefits of the program are exceeding the expenses incurred. This means that ROI is really only influenced by two main variables: decreasing costs and increasing benefits. To help L&D professionals maximize and publicize ROI within their organizations, several strategies can be employed to positively change these two variables.
Strategies for Increasing Corporate Learning Effectiveness
The first strategy focuses on the upper levels of the Kirkpatrick Model, a trusted paradigm for learning. By ensuring that learners not only engage with the material but also adjust their behavior and create organizational impact, L&D professionals can validate behavior change. This can be achieved by removing friction, embedding reinforcement, promoting learned behavior with expertly timed nudges, and identifying meaningful metrics. Hitting these four milestones can be achieved by reducing training length and volume and framing the training in a day-to-day context to make it more relevant.
The second strategy involves going fully digital to save time and money. Companies used to incur huge expenses due to booking airfare, hotels, and venues for in-person training events, which was extremely cost-inefficient. They also fail to capture learners’ attention and retention effectively. By embracing digital tools and microlearning, L&D professionals can offer bite-sized content, such as interactive quizzes, videos, and nudges. Presenting information in this easily digestible format can improve focus and retention by up to 80%.
The third strategy emphasizes monitoring better metrics to demonstrate strategic value. Traditional metrics like time spent learning or the number of attendees do not reflect true change in employee behavior or performance. L&D professionals should brainstorm new key performance indicators (KPIs) that are tied to leadership, even though this might be harder to track. Examples of these metrics include satisfaction rates, application of new knowledge, and confidence lift. These might be difficult to truly measure, but metrics such as employee retention and product adoption rates offer a good starting point.
The fourth strategy involves sharing metrics widely and frequently to underscore the significance of L&D. Often, L&D initiatives do not receive the attention they deserve compared to marketing, sales, and product initiatives. By incorporating metrics into storytelling, leveraging various communication channels, and highlighting the tangible results of learning, L&D professionals can boost corporate leadership’s confidence in the impact of training.
The fifth strategy focuses on pivoting quickly to avoid obsolescence. Outdated content fails to engage learners and address their evolving needs. L&D professionals should leverage continuous learning models to push out content in real time that is relevant to the current landscape. Digital tools are useful to collect learner data, review key KPIs regularly (at least once a month), and make data-driven decisions that accelerate ROI.
Calculating the ROI of Corporate Learning
ROI calculation is crucial for tracking impact, aligning capabilities with business goals, and justifying investments. However, many L&D programs lack success metrics, and calculating true ROI can be challenging. Expenses related to time, effort, and money must be considered, along with the increase in employee ability. While traditional L&D approaches often yield poor outcomes, studies show that for every $1 spent on L&D, revenue increases by $4.70.
To effectively measure L&D ROI, organizations should adopt a purposeful, accessible, and science-backed corporate learning program. By leveraging digital platforms, microlearning, and data analytics, L&D professionals can create and measure the impact of their training initiatives, demonstrating their contribution to revenue growth and overall organizational success. By implementing these strategies and adopting the right tools, L&D professionals can overcome the challenges of proving the value of corporate training. They will be able to secure support from leadership and ultimately ensure the success of their L&D initiatives.