ROI (Return on Investment) quantifies the gains from a specific action or investment. Learning or training ROI measures the financial impact of learning and training initiatives. For instance, if your organisation invests $100 in your learning strategy and it leads to a $200 return, your learning ROI would be 200% (2:1).
ROI can be used to justify the expense of a training course, compare one training course to another, and help establish training within an organisation. It’s a simple way to track training effectiveness and measure the value the learning helped create. Use past data metrics and projections to demonstrate the benefits of investing in learning. Highlighting the ROI your organisation will gain from upgraded technology can turn the prospective debate in your favour.
By calculating the learning ROI, you can demonstrate the impact of recommended learning initiatives and help shift the board’s perception from L&D (learning and development) being a cost centre to a revenue generator. You can drive home the point that ROI isn’t just about monetary profit; it can also refer to time saved or improved work quality. Suppose training reduces a task’s time by half for a team of 10 employees; that’s 520 hours saved annually!
However, measuring L&D ROI comes with its share of challenges. Quantifying intangible benefits such as improved employee performance can be difficult. In addition, your L&D strategies must align with business outcomes for effective measurement. Real-world instances where training positively impacted productivity, engagement, competency, and leadership can turn the tide in favour of optimal investment in learning and training initiatives.
Provide your board with examples of successful corporate L&D programmes demonstrating how L&D strategies contribute to employee engagement, motivation, and overall organisational success.
| Name of Company | Approach | Impact |
| Yelp | Everyone takes on stretch roles, which encourages personal growth and mentoring | Fosters an engaged workforce and facilitates internal promotions |
| Pixar | Offers required and optional training classes for different disciplines | Employees continuously develop their skills and stay aligned with industry trends |
| Airbnb | Hosts “Fireside Chats” to emphasise learning, knowledge, and sharing | A culture of continuous learning and professional development |
| Earls | The “Visions + Goals” initiative helps employees create life visions and communicate personal goals | Employees are empowered to be their best selves |
| Etsy | Focus on personalised learning paths, allowing employees to tailor their development | A thriving culture of creativity and skill-building |
Applying the findings from L&D case studies to your organisation involves a strategic approach. Tailor the steps to your organisation’s unique needs and context:
- Assessing Current L&D Initiatives – Objectively evaluate existing training programmes and their effectiveness and alignment with organisational goals to identify gaps or areas for improvement.
- Setting Clear Objectives – Define specific goals for L&D initiatives: Are you aiming to improve productivity, reduce turnover, reduce business operational costs, or enhance customer satisfaction?
- Collecting Data – Gather relevant data before and after training interventions using productivity metrics, employee engagement scores, or financial performance indicators.
- Calculating ROI – Use the ROI formula: ROI = Net Benefits / Training Costs x 100. Net benefits include tangible (for example, increased revenue) and intangible gains (for example, improved employee morale).
- Presenting to Decision-Makers – Create a compelling business case. Highlight how L&D investments directly impact financial outcomes. Use case studies and industry benchmarks to support your argument.
- Improving Continuously – Review and adjust L&D strategies regularly based on feedback and results. Stay informed about industry trends and best practices.
Remember, when presenting to your board, emphasise financial gains and non-monetary benefits.
Despite the inevitable roadblocks thrown up by your board, you can convince them to invest in tried-n-tested learning and training programs such as Alison’s Free Learning Management System (Free LMS).
Key points to consider include the fact that Alison provides certificate programmes that can officially recognise learners’ achievements. Integrating these certificates into your LMS can motivate your employees to complete courses and gain CPD-accredited certificates, potentially leading to improved performance and career growth.
In addition, our Free LMS provides analytics and reporting capabilities to track your learners’ progress and engagement. The resultant insights can help you assess the effectiveness of Alison’s courses within your LMS and make data-driven decisions to optimise your organisation’s learning experience.
Besides, Alison’s learning pathways and course recommendations can guide your employees on a learning journey aligned with their career aspirations. Integrating these pathways into your LMS can promote continuous learning and skill development, improving employee retention and performance.
Furthermore, utilising Alison’s Free LMS can significantly reduce training expenses compared to in-house training. It allows you to create courses, store and replicate training materials, quickly distribute them, and host training sessions and recordings that can be revisited whenever necessary. You can thereby eliminate the need to pay instructors to give the same lesson multiple times.
Finally, not only does Alison’s LMS come to you free of charge, but it can also save you equally valuable time and improve productivity. It enables efficient onboarding, automates administrative tasks, provides anytime learning accessibility, and allows quick access to information, reducing the time and resources required for training delivery and administration.
Suppose your board needs further evidence about how your proposed action plan will result in noteworthy cost savings. In that case, you can show them how Alison’s Free LMS eliminates expensive implementation fees compared to other LMS platforms. This allows your organisation to allocate precious resources toward meaningful training initiatives rather than administrative overheads.
Alison provides access to over 5,000 free courses covering various topics, from hard skills like technology to soft skills development. When you join our learning community, these high-quality courses can help your organisation save the costs of creating its own training content or purchasing expensive third-party courses.The Free LMS allows your organisation to onboard an unlimited number of employees onto the platform onboard an unlimited number of employees
Investing in employee development through Alison’s Free LMS can improve employee retention. By upskilling and reskilling its employees, your organisation can reduce the costs associated with high turnover, such as recruitment, onboarding, and lost productivity.
Quantifying and presenting estimated cost savings can help you strategically demonstrate the ROI of investing in Alison’s Free LMS. Use the key metrics below to calculate L&D ROI:
1. User Engagement Metrics
- Login Frequency: Monitor how often your employees log into the LMS to access courses and resources. Higher login rates indicate greater engagement and perceived value of the platform.
- Course Completion Rates: Track the percentage of your employees who complete assigned courses. Strong competition rates suggest the content is engaging and relevant to their needs.
2. Learning Outcomes
- Assessment Scores: Evaluate your learners’ knowledge gains through pre- and post-course assessments. Improved scores demonstrate the effectiveness of Alison’s courses in building skills.
- Skill Acquisition Rates: Monitor the rate at which your employees acquire and apply new skills on the job. This review directly links the LMS to performance improvements.
3. Operational Efficiency
- Time Savings: Quantify the time your employees save through on-demand access to training, reduced time spent in the classroom, and streamlined administrative processes.
- Reduction in Support Tickets: Track the number of support tickets related to training issues. A decrease indicates the LMS is intuitive and reduces the burden on your L&D team.
4. Financial Metrics
- Training Cost Savings: Calculate the savings from reduced instructor fees, travel expenses, and physical materials by leveraging Alison’s free courses.
- Improved Employee Retention: Estimate the cost savings from reduced turnover and rehiring expenses due to better employee engagement and career growth opportunities provided by the LMS.
Adopting this data-driven approach will help you build a compelling case for investing in L&D to support your organisation’s training goals. With improved employee performance, engagement, and retention a very likely ROI, your board will be convinced that it would be a wise investment for your organisation.
