10 Tips to Calculate L&D Effectiveness

By January 8, 2018 No Comments
effective learning and development

Calculating L&D effectiveness is especially challenging when the targeted outcomes involve soft skills and the standard training objectives found in many leadership development programs (i.e., improved collaboration, decision making, pioneering, and the ability to think strategically).

Assigning a hard-dollar value to these skills is difficult. Equally challenging is presenting a correlation between the learning initiative and the acquisition of the targeted skills. Fortunately, these challenges can be overcome and the acquisition of skills, even soft skills, can be assessed.

However, if the post-training evaluation process and ROI targets were not carefully planned at the program development stage (steps that are imperative in determining the long-term impact and transfer of learning) future L&D programs may lose corporate support and ultimately, budget.

10 Tips to Track L&D ROI

1. Don’t over-engineer the metrics. Generally, ROI just needs to demonstrate value beyond a reasonable doubt. Find out what the department or executive sponsor determine as success and measure towards that goal.

2. Adapt a results mindset. When designing your L&D program, it’s all about delivering a quality employee experience that encourages learning. However, when evaluating your L&D program, it’s about results. When determining ROI, focus less on the quality of the experience and more on the actual effect of the training.

3. Measure ROI continuously. As learning has evolved into a 24/7 on-demand experience, so should your ROI calculation. Always know how the L&D program is performing so adjustments can be made. This not only helps improve the program but can justify how dollars are being spent at any time.

4. Create a step-by-step case for ROI. Analyze company-wide goals and divisional needs to develop strategic learning plans that proactively attack those stated requirements. Based on anticipated ROI, prioritize the L&D events and present them with smart justification about why senior leaders should support them.

5. Measure outside of just the program delivery. Evaluation and feedback should come from as many sources as feasibly possible: learners, their supervisors, peers, and senior leaders. Consider all that ROI data you need and uncover if a baseline already exists.

6. ROI is more than money. When calculating ROI results, consider the non-fiscal learning measurements of quality, effectiveness, job impact, and business results. Perhaps you cannot assign a cost to an intangible, but you can document its positive transformation.

7. Calculate learner-reported ROI conservatively. Post training, subsequent follow-up evaluations should have more ROI weight than evaluations reported immediately after the program. This compensates for the “fresh-trained glow” and enthusiastic bias learners’ usually feel.

8. Equate the investment on a per learner basis. To present the investment in a more personalized and palatable scenario, spotlight the per learner cost rather than the total lump sum. Investing $100,000 for CRM training can create sticker shock compared to illustrating that investing $8,000 on “Kevin” and his $2,000,000 book of business.

9. Give the numbers a storyline. Highlight data with meaningful examples and anecdotal information to help confirm the ROI numbers.

10. Don’t give up if you miss the number. ROI is intended to assess what is successful, what can be improved, as well as what failed. Learning is a learning experience.

Due to the harsh reality that L&D programs generally provide more long-term value rather than short-term hits, senior executives frequently consider eliminating them as an easy cost-saving solution. Even if the executive sponsor of a specific training program is satisfied today, they may not be tomorrow if they are forced to “hit a departmental budget number.” For CLOs, it makes prudent fiscal sense to establish tactile, repeatable ROI calculations so that even the most critical opponents will understand the value of L&D programs within an organization.

 

Find out how TTA can help your organization with its L&D effectiveness by contacting us today.