The Journey to Understanding the ROI of Learning
HR, L&D, and People leaders are increasingly expected to show the value of their work and how it impacts the business. Yet only 33% of business leaders think the L&D function impacts business outcomes, and fewer consider the function to be relevant or timely, according to the CEB.
Many learning initiatives are shifting online as part of the larger digital transformation of the workplace, which can make it complex to understand the ROI of learning. The challenge though is not in the complexity, it’s that the ROI of learning has been poorly defined. If you ask any HR, L&D, or People leader what the ROI of learning is, you’ll hear something different from every person.
We wanted to address this head-on at Udemy for Business. That’s why we’ve put together a simple, comprehensive ROI of learning framework that we’re excited to share with you so that you can begin (or continue) your ROI of learning journey and make the business case for learning.
Let’s take a brief walk through history and look at the Kirkpatrick model of training evaluation.
L&D leaders often have measured the impact of their training programs using the well-known Kirkpatrick Model, which involves four levels of evaluation: Reaction, Learning, Behavior Change, and Results.
The challenge with this model is that it often leads us to focus on level 1 (Were they satisfied with the training?) and level 2 (Did they learn the material?) metrics. Proving behavior change occurred (level 3) and whether the training resulted in achieving the key business result (level 4) is much more challenging.
While the Kirkpatrick model has many benefits, the ROI of learning framework we’ve created looks at learning measurement through a different lens. The framework we’ve created addresses four key elements that are critical to making the business case for learning.
The 4 elements of the ROI of learning framework
The four elements are:
- Cost savings – Learning is shifting online more than ever and with this digital shift of learning, we need to understand our spend and costs. What are you spending on learning in-person versus online? What are you spending on? Where and how can you save?
- Productivity improvements – How are your training and learning programs impacting employee productivity and performance? Are they impacting productivity—why or why not?
- Employee engagement – Are your training programs engaging employees more or less? Are people happier? Have you noticed any difference in employee engagemenet and retention numbers?
- Internal buy-in – Have you gotten the right amount of internal support for your initiatives? Do you know who your biggest stakeholders are—your biggest supporters and naysayers? How do you get the people around you to support your employee development programs?
Over the next several months, we’re planning to launch a series of ROI of learning tools and resources that support the four elements of this framework. Our goal is to help you use this framework to better understand and demonstrate the ROI of learning at your organization, so that you can make a strong business case for learning.
Part 1: Does digital transformation enable cost savings?
The first resource we’re launching today is the Training Savings Calculator and it addresses the first element of the ROI of learning framework. This simple calculator is meant to help you take a look at the costs of shifting more of your learning resources online versus running predominantly instructor-led programs.
With the workplace becoming more digital, it’s important to understand the tradeoff between an in-classroom, instructor-led training program versus an on-demand digital learning platform. Identifying the cost savings and efficiencies that a digital, online learning platform can bring to your company will help you play a role in your company’s digital transformation. While cost savings alone won’t prove the ROI of learning in its entirety, it will help you start the ROI of learning conversation and it’s the first step to making the business case for learning.
The calculator helps you understand potential cost savings in three simple steps.
Step 1: To understand the potential cost savings of making your learning programs more digital, we want to know how many people you are looking to train.
Step 2: Next, we need to understand how much you anticipate to spend (or perhaps you’ve already spent) per person for this particular training program. Will it cost you $500 per person? $50? $2000? Enter that value here.
Step 3: Lastly, how many days of employee time will this learning program take up? Enter in the number of days here. If your program is less than one day, note that in this tool we assume that all programs will be at minimum one business day per person.
Note: In step 3 we assume that there are travel costs involved for employees to attend the training program. If no travel is required for employees to attend the program, you can remove $600 per person and deduct that from your results.
Take a look now and start seeing what your cost savings could be.
The ROI of learning journey is 1% finished
Understanding the ROI of learning is a journey that is never complete, and we’re here to support you along the way. This cost savings calculator is just the start. We’re excited to share other ROI of learning resources with you over the next few months so that you can measure and demonstrate the impact of your learning initiatives. Keep an eye out for more resources as we take you through the other three elements of the ROI of learning framework!
Empower your team. Lead the industry.
Get a subscription to a library of online courses and digital learning tools for your organization with Udemy for Business.