On average, companies spend between $500 to $3,000 per employee to support their learning and development efforts. However, more than half of human resource professionals (52%) say they encounter pushback from leadership when they want to renew their development budgets.
Spending money on training and upskilling is valuable, but some companies struggle to justify the cost. They want to see a clear return on investment (ROI) for their spending, which is hard when employee upskilling comes with many intangible benefits.
Fortunately, there are also plenty of measurable ways to showcase the value of your learning and development efforts. Here are five ways to track your ROI and measure the value of your training programs.
Increases in productivity
The first thing to consider when you want to track the ROI of your learning and development program is your productivity. This looks different for every company and every department. The accounting office in a manufacturing firm will have different metrics to track than the design team of a marketing agency.
Consider how your company tracks productivity and set key performance indicators (KPIs) to reflect any changes in how work gets done. Here are a few signs that your productivity is increasing:
- Work is done more efficiently, which means projects are finished faster.
- Employees can take on more work because of the improved skill sets.
- There are fewer missed deadlines, errors, and issues that need managerial intervention.
- There are fewer productivity gaps when employees are out of the office.
For example, an upskilled employee might learn how to get work done faster, allowing them to scale their production. Cross-training might help team members fill in for a co-worker who takes a vacation or needs to use their sick days. Your staff can complete tasks that the out-of-office employee previously only had training on. In each case, the work is done faster and better because of your learning and development investment.
Voluntary participation
If you are still concerned about the cost of learning and development programs, reduce the overall ROI burden by increasing participation. For example, if it costs $1,000 to bring a development professional to your organization and five people attend the training seminar, then you spend $200 in training for each employee. If 20 people attend the same seminar, the cost per employee is only $50. This makes it easier to hit your return goals.
Employers can increase participation by providing valuable development opportunities that are presented in an engaging manner. A valuable training seminar won’t attract participants if it is boring. Conversely, an interesting session might attract attendees, but that doesn’t mean they will walk away with actionable insights. Both engagement and value are essential.
Long-term learning assessment scores
If you still aren’t sure that your learning and development efforts are paying off, develop learning assessments to test what employees know. Depending on what you want to train your employees, these can evaluate a mix of hard and soft skills.
Companies often distribute these assessments before and after a training seminar, proving that employees learned valuable information based on the content. However, you can send these assessments six months after the training sessions to confirm that your team members retained and applied the information. You can also conduct annual skills testing to see how your employees improve.
A seamless way to do a pulse check on your employees is to use a Poll Everywhere Survey Activity. Create your Survey with a 3-5 Activity types like Multiple-Choice for quantitative questions and Open-Ended for qualitative questions. Once your Survey is created, you can choose to share the response link via email or through your company’s communication channel like Slack so employees can response asynchronously. Run reports on the before survey and the after survey to compare the results and assess how much your employees learned.
Along with formal testing, conduct informal interviews to discuss how employees apply what they learned. How did an employee use the advanced Excel skills once they returned to their day-to-day tasks? What could employees apply from a conference that made the organization more effective? You can gain insight into the ROI of your efforts by talking directly to your teams.
Reduced turnover
The majority of workers want their employers to provide learning and development opportunities. One survey found that 84% of employees expect their employers to provide some sort of education so they can stay up-to-date on their skill sets. Workers who feel like they don’t have opportunities for learning, development, or advancement are more likely to quit. They will find other employers who are willing to invest in them.
Replacing employees is expensive. Once you factor in recruiting, interviewing, onboarding, and lost productivity costs because of the open position, you can spend up to two times the employee’s annual salary to replace them. If you lose five employees who make $100,000 per year, your company will spend up to $1 million in replacement costs.
Turnover is a key metric to monitor as you calculate learning and development ROI. You can evaluate the number of employees who leave per year and the reduced costs of replacing them. While several factors contribute to why employees leave, you can partially credit turnover reductions to your learning and development investments.
Increased internal mobility
The final thing to track as you evaluate your learning and development ROI is the internal changes across departments and around the organizational chart. Training empowers employees to step into new roles, whether they are advancing to a management level or applying a new skill set to a different department. Engaged employees who feel like their employer is invested in them will look for ways to advance internally. They can prove they have the know-how to succeed in the job.
When employees don’t feel supported, they are more likely to leave. They will seek out promotions, changes, or training in other organizations. While turnover is certainly a valuable metric, don’t overlook the rate at which people want to stay with your company. It’s a good sign when you find yourself hiring internally more often.
Internal mobility also has significant financial benefits to your organization. By promoting from within, your open positions that require external recruitment are more likely to come from the lower levels and have lower salaries – making them easier and more affordable to fill. Internal mobility also keeps company and industry knowledge within your organization. The longer your team members stay with you, the more they know about how the company runs.
Manage a company that employees want to thrive in. By investing in your staff, you can create a culture where they want to invest back in you.
Improve your learning and development with Poll Everywhere
If you want to boost participation in your learning and development efforts, take steps to make your programs more engaging. Poll Everywhere is designed to help corporate training teams make presentations interactive. From fun Word Cloud activities to challenging Multiple-choice questionnaires, you can keep attendees on their toes and increase buy-in to your training sessions.
See how Poll Everywhere can change how your company and employees approach learning. You might be surprised at how digital engagement and fun activities can increase retention and help you reach your organization’s learning goals.
