Learning and development departments are increasingly being asked to do more with less. Yet, the latest AHRI Pulse Survey for Learning and Development reported one in five respondents (20 per cent) did not measure learning and development for return on investment (ROI), and another 13 per cent stated not knowing how ROI was measured. Of those that did, participant self-assessment was the most common method (17 per cent). This is not an ideal scenario when training budgets need to be renegotiated at the start of the financial year and L&D needs to show clear value for money. Many HR and L&D professionals are facing this very challenge over the coming months. As training budgets are tightened, L&D needs to move more towards benchmarking learner application instead of the traditional monitoring of participation satisfaction levels. This means demonstrating the value of training by clear alignment to business objectives and results, not simply relying on glowing trainee evaluation reports and completion levels. Analysing L&D programs as if they were capital investments by using techniques like ROI can provide invaluable credence at the negotiating table and help change attitudes to L&D spend. This is especially true when so many new developments in L&D are potentially capital intensive such as online and mobile learning. Three key drivers to learning transfer need to be applied when measuring business and organisational performance.
- It is essential to set benchmarks that identify and monitor performance improvements in terms of showing learner application of new skills and knowledge back into the workplace.
- It is important to understand what motivates learners to apply their learning to improve and build organisational development. Learner motivation needs to be built into a sustainable learner transfer strategy to embed new knowledge, behaviours and skill.
- Once training needs and objectives are agreed, the calculation of ROI must begin with knowledge of the costs and benefits associated with the training.
Following motivational or team-building, L&D could assess the value of reduced absentee rates as a potential gain. After an extensive management development program, the increase in internal management promotions could be a measurable return. It is important to choose relevant benchmarks that are meaningful to your stakeholders. The tangible benefits delivered can be converted to dollar values based on learners’ analysis of key business benefits. To help reinforce and demonstrate value and gains, the first step is to use the initial Training Needs Analysis that led to the development of the L&D intervention and link the business performance factors that the L&D seek to improve. Remember to benchmark performance or establish a control group (a group of employees who have not been through the training program).
The Kirkpatrick Evaluation Model
A fifth level of evaluation to determine what the return on learning investment is gained from data in the other four levels (did they like it; did they learn; did they use it; did it impact the bottom line?). It is critical to establish links between L&D initiatives, business improvement, and behavioural based change with quantifiable results before and after the L&D intervention. With clearer alignment to organisational development goals and business objectives, L&D is in a stronger position to build its status as a relevant strategic partner at the executive table.