01How to Measure the Value of Learning and Development Programs

How to Measure the

Value of Learning and Development Programs

01How to Measure the Value of Learning and Development Programs

CONTENTS

02 How to Measure the Value of Learning and Development Programs Why Measure?

03 What to Measure?

04 How to Measure

05 Getting More Out of Training

02How to Measure the Value of Learning and Development Programs

How to Measure the Value of Learning and Development ProgramsA corporate learning and development program can be a powerful tool to promote continual staff development. Furthermore, such a program can help with succession planning, regulatory compliance and a variety of other business challenges. All of these gains add up to an exciting opportunity for companies, but like any other investment, you must develop strategies to measure what learning and development strategies deliver in action.

Measuring the ROI associated with learning and development is challenging in a few key ways, not the least of which being the fact that gains are often intangible. However, putting the effort into ROI analysis can go a long way in promoting value creation. Visibility into ROI potential is essential as an ATD study found that approximately $165 billion is spent on corporate learning and development in the U.S., with the average worker spending more than 30

hours on training – a $1,195 cost per employee.

Why Measure?An ATD Research study found that the average business spent approximately 8 percent of profits on direct learning expenses in 2014. That figure equated to 4 percent of payroll among respondents, but only 35 percent of those polled said that their organizations are evaluating the business results of learning projects.

These figures point to a clear reality in the corporate learning sector – businesses understand the value of learning, but they don’t have systems in place to measure the implications that education is having in the enterprise. Just 15 percent of respondents said they measured ROI.

All of this data exists in an industry context in which training professionals must find ways to get more done while keeping costs down. Effective measurement of learning programs can help organizations in this balancing act by allowing them to identify precisely which types of training are delivering value and how different methodologies impact the workforce. Industry experts Kirkpatrick and Phillips have developed a maturity model for evaluating training programs, with Kirkpatrick contributing levels one through four and Phillips building on it for level five:

Level 1: Assessing the reactions of the employees involved in a program.Level 2: Gauging employee acquisition of skills and knowledge.

03How to Measure the Value of Learning and Development Programs

Level 3: Using follow-up studies to identify if workers are actually adjusting their behaviors based on the information presented and skills gained in training.Level 4: Measuring actual business results associated with the training programs.Level 5: Determining ROI by combining these various areas of analysis to get a clear picture of how training impacts organizations.

Companies may be prioritizing learning as a tool to drive improvement as an organization, but many are focused primarily on levels one through three in this maturity model, and it is time to start rising up to higher levels to truly maximize the value of training.

What to Measure?Everyone in an organization will understand that value is critical to success. Employees in different roles know that the work they do needs to align with overarching organizational goals, and aligning operations with business demands is extremely important.

Similarly, you can see how value created through training comes into play as employees adjust their work patterns around new information they gain through educational programs. An eLearning Industry report identified key measurements that can clue you in to how training is helping employees see how you create value. Key points of measurement include:

• Attrition rates.• Engagement levels.• Productivity levels.• Time to competency.• Market share.• Customer satisfaction.• Revenue growth.• Time to delivery of products and services.• Cost reduction in training efforts.• Study time.• Volume of educational opportunities offered.• Delivery time.

These key performance metrics can help you see how training has a direct impact on different impacts of your operations. eLearning Industry also identified two other ways to measure corporate training, and both options deal with some of the broader or less tangible benefits that come from learning and development.

04How to Measure the Value of Learning and Development Programs

Skill assessments: Skills are generally fairly tangible, but difficult to evaluate unless you closely monitor employees over time after training. A simpler way to handle this process is to use skills assessments that employees complete before and after training sessions to identify the broad impact that training has on a worker.

Social ownership: When somebody has a clear knowledge of a skill, they are more likely to share that information, or at least be comfortable doing so. Incorporating peer teaching into your operations lets you have workers put their expertise on showcase by training other employees, letting you get a clear idea of how well they have mastered the skills that you have built training programs around.

How to MeasureOf course, knowing why you should measure training programs and what you should measure doesn’t help unless you know how you can perform such analysis processes.

A Caveo Learning report identified a few issues that should be considered in any corporate training evaluation checklist. Key items include:

• Identify the core purpose of the training investment so you have a clear goal to measure against.• Clearly delineate the business objectives that your training program is hoping to support.• Define the key performance indicators that will be used to identify whether objectives are being achieved.• Put the training solution under a microscope – by isolating the program, you can clearly pin down which business outcomes you can expect training to contribute to.• Create a clear evaluation program that will allow you to incrementally measure the initiative.• Establish guidelines around how you will adjust learning and performance efforts as business goals change.• Understand which assumptions and barriers may impact your ability to complete these measurements objectively.

• Anticipate challenges and put procedures in place to mitigate them.

There is a great deal to consider when evaluating any corporate training program, but this checklist combines the core data metrics that you’ll need with the intangible analysis – like accounting for the nuances of how changes in your business may impact skills development – giving you a holistic idea of how courses are performing.

05How to Measure the Value of Learning and Development Programs

Want to put this checklist into action? Try out the ROI calculator provided below to assess how a learning development program could drive value creation for you in an instance where you are considering using training to improve retention and limit turnover.

Getting More Out of TrainingEffective measurement is needed as companies work to get value out of every investment, including learning and development initiatives and programs. Organizations may accept that training is valuable, but you’ll need to be able to measure value with greater precision to fully demonstrate the impact that education can have on the business and ensure executive buy-in.

This information needs to be collected prior to the start of the program as it is the baseline data from which changes and improvements are measured. This information should be immediately available from any reasonable human resources system. If not, then careful estimates should do.

Implementation Costs

Content Delivery, Admin Functionality, Records Management

Employment Costs -Savings from Increased Retention

$10,000

$90,000

$150,000

$360,000Behavior change/Improved Performance in the Role

Based on a 10% reduction in annual turnover and replacement costs of 30% on annual salary

1.2% based on anticipated average behavior change measured from post-program surveys which drives equivalent value gains from an employee’s overall salary

Learning and DevelopmentROI Calculator

Program Costs

Base Data

Total Costs/Investment $100,000

$510,000

Return on Investment 80%

Participants

Annual Turnover

Average Salary

300

$100,000

18%

06How to Measure the Value of Learning and Development Programs

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