Return on Investment or ROI, as it is more popularly known, is a measure to appraise the efficiency of expenditure against objectives, and is increasingly becoming important across all industries and professions. The need to quantify the results of any investment action is strong by virtue of the need to justify the credibility and necessity of that investment.In other words, the analysis on the ROI of a programme is essential, whether the ROI itself is positive or negative, for a number of reasons. Primarily, this evaluation can lead to optimisation of resources where a higher ROI is perhaps attainable. Also, it’s exceptionally useful for measuring success over time and taking the guesswork out of making future business decisions. After all, it makes sense for a company to make a particular expenditure only after knowing that it is getting its money’s worth.L&D too, like all other sections in a company, is no exception when it comes to demonstrating ROI. L&D needs to provide data and insights to help make strategic decisions to optimise workforce learning investments against skills and competencies. Without a proper pointer to ROI, L&D programmes may have to struggle to make room for themselves in the overall investment portfolio. In fact, LinkedIn’s 2017 Workplace Learning Report found that while 69% of organisations see talent as their top priority, only 8% of CEOs see impact from L&D programmes. This is exactly why showing ROI for L&D is important now than ever.As an L&D professional, how do you define the efficacy of your learning programmes and rationalise the investments made on them? You may have to answer these questions and measure the metrics of ROI even before the actual modules take off. Nevertheless, you can remember some points in order to map the ROI with the learning programmes that you have embarked upon for your company.
1. Align your Organisation’s Purpose with 'Learning'
Aligning training programmes is essentially the process of prioritising the goals and missions of the organisation’s training activities around the business needs of the enterprise, and ensuring that learning helps drive business results. While the chief goal of a training course is to increase individual knowledge of employees, its ultimate goal is to raise competency levels of the learners as a whole. This brings into picture the fact that the success of a learning programme largely depends on what the organisation’s perspective or purpose is. It is imperative to design the programmes only after taking into consideration the organisation’s unique business culture and establishing agreed upon business objectives. It is also vital for the L&D department to study the leadership’s plans for the company and its vision and then adapt the project to this so that the targeted results are achieved.
2. Don't Focus on the Tangibles Alone
Albert Einstein once said, “Not everything that can be counted counts, and not everything that counts can be counted.” This is an important point when it comes to measuring the ROI especially for L&D because these ventures do not necessarily bring out results that can be counted or measured. Measurement often focuses on quantifications and numbers and it is easy to quantify things like profits, return on assets, incoming orders, service visits etc. But there are some things that cannot be easily counted or quantified. Things like organizational culture, know-how, the strengths of customer relationships or the reputation of a brand are all inherently difficult, if not impossible to measure. With the spotlight on the growing importance of L&D as a section which assists in enhancing performances of employees, the focus also needs to be given to these intangible benefits that cannot be measured, but are as important as the tangibles. As for the tangibles, one can rely on a Learning Management System's MIS and Reporting abilities to translate user data into actionable information.
3. Make Every Learning Opportunity Count
Learning need not necessarily happen in a formal setting where employees are participating in a pre-planned/ formal training event. Jay Cross famously coined the term ‘informal learning’ broadly referring to how we learn when we are not in the classroom. Cross says that, 80 percent of learning takes place informally and only 20 percent formally. The bottom-line is where there’s interest, there’s opportunity. Therefore, it is for the L&D to make sure that no learning opportunity is missed, that they reach out above the boundaries of a formal setting and make people development much more closely aligned to performance. It is best to enable Social Learning & Knowledge Collaboration through an LMS and encourage learners to go beyond the realms of "traditional" learning. Why structure every learning intervention when some of it can happen at the water cooler as well?
4. Allow for Learning, Unlearning and Relearning
Today, with competitiveness reaching breathtaking levels in the corporate landscape, learning agility is the name of the game. However, it’s not just about learning anymore. Unlearning too is vital in today’s workplace. Employees need to unlearn in order to move forward alongside their company so they can move ahead, work more effectively and further the company’s mission. To succeed today, it is essential to be in a constant state of adaptation – continually unlearning old ‘rules’ and relearning new ones. What is important today for learners across companies and job roles is the freedom to learn. LMS features like Compliance Training, Continuing Professional Development (CPD), and Competency Management help in doing just this and more!
5. Account for the Role of Line Managers / Senior Sponsorship as Learning Pathfinders and Learning Champions
Choosing the right vendor is an inseparable part of the whole LMS package because that’s a wise way of ensuring you will receive a good ROI. You need to spend sufficient time on this because it’s not an area to skimp in. But, justifying ROI of a learning/ training programme does not depend merely upon choosing the correct vendor or Off-the-Shelf (OTS) eLearning supplier. It also has a great deal to do with the role that the senior leadership plays in actually driving the learning programme towards success. It is crucial for the top management, heads of departments, supervisors and project leaders of the organisation to be early adopters of the LMS. They are the ones who have the mandate to manage and run the LMS and are involved in the implementation and goal-achievement.Once L&D professionals take into consideration the aforesaid steps, checking the right box for ROI on learning programmes will become easier. Modules that focus on creating experiential learning, on-the-job learning and helping to establish an entire ecosystem that fosters a strong learning culture are what can point to a good ROI. Author: Amit GautamAuthor Bio: An eLearning professional with 16+ years of experience, Amit has played a key role in bringing an innovative approach to the traditional LMS and has been instrumental in putting UpsideLMS on the global map. Co-founder of Upside Learning, he leads the Technology Solutions team, orchestrates the Sales & Marketing operations while acting as a consultant to clients, enabling them to make the LMS initiative a success