It wasn’t long ago that learning and development budgets were small or non-existent, and L&D involved little more than a one-off training session here and there. But these days it’s become an essential part of just about every successful organisation. According to a recent LinkedIn report only 27% of L&D professionals surveyed cited a ‘limited budget’ as a challenge.
Compare this to the almost 50% who cited it as an issue just two years ago and it’s clear that more employees than ever are taking part in comprehensive and targeted training programmes to build valuable skills and develop in their roles. On top of this, 82% of L&D managers surveyed in the same report said their executives actively supported employee engagement in professional development.
While it’s obviously a positive to increase employee knowledge and skill level, now, with extra funds and support being directed towards L&D programmes, it’s important to be able to identify value.
But how do you calculate the ROI on training?
As the benefits of workplace learning programmes are often seen over a long period of time and there are few hard metrics that it can be easily measured against, calculating ROI can be tricky. The value is not always tangible and there are many variables, which means there’s no specific formula that can help you accurately identify the value of your L&D initiatives.
A good way around this is to measure the success against some key criteria. So in this article we share 5 effective ways to measure the value of learning and development programmes.
1. Staff turnover rates
Retaining your best people is crucial in today’s highly competitive talent environment, and investing in their professional development is an important way to make your people feel valued. It also gives them the opportunity to develop new skills or knowledge that will help them progress within your company – another key factor in employee satisfaction.
As you know, when your people feel invested in and they believe there are opportunities for advancement, morale and engagement increases and turnover usually decreases. And of course, by retaining your staff, you spend less on recruitment and on training new joiners.
To show how L&D is contributing to retaining your people, you can measure staff retention rates before and after your training programmes. Just be sure to leave a reasonable window of time, which could range from 6 to 18 months.
2. More efficient use of employees’ time
L&D programmes should increase your employees’ skill levels and knowledge, which should also have an impact on how well and how efficiently they accomplish their tasks/goals.
The right training and coaching gives them confidence in their abilities and allows them to perform in their role at a higher level. They’re more easily able to think on their feet and use their initiative to get things done.
To illustrate how L&D has had a positive impact in this area and measure the value, you can track certain regularly performed tasks over a set period of time before the training is completed.
Then, a few weeks or months after the training programme, assess the quality of their work and how long the same tasks take to complete. From here you can work out a value based on the time (and wages) saved.
3. More efficient use of managers’ time
When your staff lack the skills and knowledge they need to perform in their role, they rely heavily on managers for direction and support.
However, when personalised and relevant training is provided to boost their skill set, their competency and confidence will improve. They’ll be better equipped to handle the tasks required of them and become less reliant on the help of others. This allows managers to devote more of their time to strategy, growth and their own workload.
To measure the value of L&D in this case you could run a survey with managers to understand if the time they spend on day-to-day training and the support of their team has changed since the training programme took place.
Although this may not provide a hard measurement it does offer an insight into how L&D has impacted the everyday workings of the organisation.
4. Higher customer/client satisfaction
When staff are confident, capable and knowledgeable, they are better able to provide a high level of service to customers/clients. They can answer questions quickly and more accurately and offer additional information that can value-add to the customer’s experience. This extends to both internal and external customers – from managers and colleagues to buyers, stakeholders, business vendors and partners.
You can get a sense of how L&D has helped improve customer service through observation of changes in morale and collaboration as well as increased sales and positive customer feedback.
Although difficult to quantify the value, you could look for specific examples where it’s clear the additional knowledge gained through training had an impact on the customer experience and collate them so you can share real-life examples with executives as needed.
5. Improvement in business performance
The right L&D programmes can see a significant increase in sales and overall business performance. But how do you measure training effectiveness? Look for practical examples of where your teams’ newly learned skills could help them do things better.
For example, if your team have completed a workshop focused on pitch presentation skills, you can easily measure the impact on pitch and tender win-rates. Or if they’ve been recently coached in skills to help them better persuade and influence internal or external stakeholders you can measure improvements in project delivery, cross-functional collaboration or the decrease in escalation events.
So, is employee training worth the investment?
With bigger budgets and increased backing from executives, L&D has gained momentum in recent years, but has now reached a tipping point. To retain its place as an essential part in the make-up of successful organisations, L&D professionals need to be able to quantify the value it is bringing.
When someone asks, ‘What is the return on investment of this training?’ you need to be able to show tangible value. By using the criteria above, you can break this value down into specific areas, showing cost savings or real-life examples that prove your training programmes are making a tangible difference to your people and your organisation.
Tailored training focused on Return-on-Training-Investment
If you’re looking to build the presentation skills of your team through personalised training that is tailored to your business and offers real value with proven results, we can help. Get in touch today to find out more about our various programmes.
Written By Belinda Huckle
Founder and Managing DirectorRead Bio
Belinda is the founder and managing director of secondnature. With a determination to drive a paradigm shift in the delivery of presentation skills training, she is a strong advocate of a more personal and sustainable presentation skills training methodology.
She believes in a training approach that harnesses people’s unique personality to build their own authentic presentation style and personal brand.
Belinda is currently helping to transform the presentation skills of people in organisations such as BBC Worldwide, DHL, ESRI, Heineken, MARS Inc., Moody’s, Pfizer, Roche, Triumph and Walmart – to name just a few.