Having created thousands of training and development programs, we are aware of the vast benefits L&D can have on organizations and their success. While we work hard to create learning experiences that speak for themselves, businesses will always need to be able to measure program effectives through objective metrics and data. In 2021, there are a variety of ways in which companies can measure return on investment (ROI), especially when it comes to eLearning. If your company is struggling to find the correct L&D program for your needs, reaching a better understanding of what does and doesn’t work is a great start—and ROI measurement can do just that.
The first step in creating an effective ROI measurement system is understanding the wants and needs of management. More specifically, try to pinpoint what successful ROI means for your organization. ROI is a ratio that tells you how much you gained or lost from investing in a particular asset—in this case, that asset is an eLearning program. The best part about ROI is that it is widely known and accepted as an effective metric, meaning everyone from managers to financial analysts will see it as a valid. This mainstream adoption will make it easier to analyze eLearning programs and receive company-wide buy-in.
Historically, many L&D teams have struggled to demonstrate their effectiveness and the true impact of their learning programs. This is because learning can be hard to track, and even harder to measure in the broader financial picture. The first step in understanding ROI is understanding cost. Here’s the best way we suggest breaking down eLearning costs to simplify the process.
The primary costs associated with personnel are hiring and paying developers and designers, as well as employee time on task. Every eLearning program will need some type of instructional designer and content developer, whether external or internal. Furthermore, you must keep in mind the amount of time you are having your employees spend on eLearning courses—if you have a program that uses 2 hours of each employee’s time each week, that’s a significant investment.
There are always technology costs associated with developing and implementing eLearning. Fortunately, the recent transition to remote and hybrid work environments means many companies are already using (and paying for) software such as video conferencing tools for other areas of business. It’s up to you how you categorize costs such as these, but make sure you are recognizing the cost of specific eLearning tools such as remote learning infrastructure and instruction technology.
Developing content will typically be the most expensive area of your eLearning program. Nonetheless, what you spend on your content is ultimately up to how much you want to get out of the program. Converting eBooks and PDFs into eLearning content will be cheaper and easier than more creative alternatives, but it may leave you with a less effective and impactful solution. On the contrary, developing solutions that use dynamic images, video, and audio are more costly up front but can provide better long-term ROI (which we’ll talk about more below).
As with any business venture, there are always hidden costs than impact ROI. When it comes to eLearning, this will include training preparation and personnel disruption. Obtaining buy-in from employees will require some significant planning and preparation, and there will always be issues with employees being unable to attend or access the training programs. Take these in stride, but don’t forget to factor them into your final ROI analysis.
Fortunately, there are a variety of eLearning benefits that typically outweigh the costs. These benefits are the primary basis of justifying the cost of your learning programs and are the main factor in ROI calculation. Let’s look at a few of the benefits of eLearning and how they can be calculated.
Remember when training programs required taking multiple days off work, traveling to a set location, and housing and training hundreds of employees in one room? Those days are over. eLearning can deliver engaging, effective training programs without thousands of dollars spent on travel accommodations. Employees can engage in synchronous training programs without leaving their office, home, or personal workspace.
In-person training programs can be a logistical nightmare. Finding an effective way to maximize your in-person learning programs is respectable, but often is not worth the hassle. With the ability to conduct training virtually, you will be able to accommodate for learners in different geographical locations, make training more accessible for busy employees, and avoid losing money on employees who cannot attend in-person events. Not to mention, eLearning courses are almost infinitely scalable, meaning you can deliver effective learning solutions to more employees, faster.
There are four ways in which you can gauge the effectiveness and ROI of your eLearning program. Each of these will weigh differently in your organization, but they’re all important in creating a successful ROI report.
- Reaction. How well are your learners responding to the eLearning program?
- How much are they participating?
- Do they find the training material relevant?
- Are learners satisfied with the course/program?
- Learning. Gauging how much employees have learned is perhaps the most difficult aspect of truly understanding your ROI. One of the best ways to measure employee learning is by incorporating assessments either as a part of the course itself or independently after the program is complete.
- Behavior. The goal of learning programs is to change or reinforce employee behavior. Find ways to measure how employee actions change post-training. This is a great time to use metrics that target specific areas in which you would be able to see change (or lack thereof) of employee behavior.
- Impact. What is the overall positive or negative impact on the business? Try to use a broad scope when answering this question. Take into consideration employee attitudes, overall cost, and simplicity of the learning program.
When it comes to demonstrating eLearning ROI, its important to stay patient and flexible. Learning is a fluid, subjective experience, and basing all assumptions off financial value and monetary gain will leave your employees frustrated and your learning ineffective. The next time you consider creating a new training program or refreshing a current one, put in the work up front to ensure your program is effective and has a strong ROI. This will increase your leverage and bandwidth when building learning experiences in the future.