Training ROI – the Walmart success

Assessing training ROI is perhaps the single question that keeps most Learning and Development managers up at night. Despite all the stats out there telling us that training is effective, some nagging question remains in the back of our heads: In what ways is my company really benefitting from training investments? And what kind of training will be most effective in achieving my goals?

Retail giant Walmart provides an answer – a loud “yes” for training.

In 2015, the company implemented a general pay raise and creation of 200 training centers through the “Pathways” program. With an investment of about $2.7 billion, the question is whether the program will generate bottom-line results.

Impact on revenues were immediately recorded, with a $5 billion increase in sales. Beyond that, stores saw improvement in customer surveys and decrease in employee turnover – which should translate into lower hiring and training costs in the future. A Forbes story identifies benefits directly related to training investments, such as attracting better caliber of workers who are eager to achieve management status, more orderly stores, brand loyalty from employees, and friendlier environments contributing to employee morale.

The brick-and-mortar success

This begs another question: what kind of training is Walmart using to achieve these results? The new academies mix four days of classroom training with practical in-store training. With so much talk recently about eLearning and mobile, some would consider this approach obsolete. But Walmart is proving that face-to-face training is key to many of the benefits they seek in training, and sheds some light on the trend we see in the best companies creating Corporate Universities. Jordan, an employee in the Arizona academy, noted team-building activities as her favorite aspect of training, according to Arizona Republic. Granted, what employees prefer is not necessarily what is the most effective. But all the following aspects of training, which were central in improving in-store experience and employee loyalty, rest on face-to-face interaction:

• Building a company culture
• Fostering leadership as a core value in employees
• Cultivating employee satisfaction and loyalty through relationships
• Exposing employees to the kind of interaction they will experience on their day-to-day job, in order to improve in-store experience

Next step: optimize

So what’s the next step for Walmart? The company is following through in establishing 200 academies before December 2017, aiming to provide academy training for 140,000 employees. This is no small task. Walmart has proven that face-to-face training is effective. But the $5 billion increase in sales has not yet had a positive effect on the bottom line, with operating income brought down in 2016 by higher labor costs and training investments.

For Walmart to translate the increased revenues into profits, one of the main challenge ahead will be to make this training more efficient and make the most of its 200 training academies, instructors, and resources. The gains from in-person training are enormous – but unlike online learning, it requires complex logistics, resource optimization and careful budgeting to achieve maximum efficiency. This is just the start for Walmart: as it learns to rationalize training processes, it should be on its way to reaping even more results in the next few years.

Training more with a smaller budget: lessons from the best

Walmart is a clear example of how effective Instructor-Led Training (ILT) can be; but yes, it remains costly. Training ROI is about efficiency as much as effectiveness - How can companies train more and better with less?

Surprisingly enough, while most of the largest companies invest in costly LMSs, they do not have tools to manage these ILT processes. In a recent study based on its experience in managing more than $1.5 billion of training budgets for some of the best companies, Training Orchestra has found the main channels to enable 15% to 10% budget optimization through better ILT management. You can see the full results in our video here, or see how other companies have managed to optimize their training budgets.

So next time the nagging training ROI question comes back, you’ll have two more answers to give. Yes, face-to-face training is effective, and yes, it can be well-managed.

Feel free to download our white paper on assessing ROI of a Course Management System or visit the Training Orchestra website for additional information on how to optimize Instructor-Led-Training.

Training Orchestra is a leader in Course Management System and provides an integrated full web solution dedicated to the entire training ecosystem: Training Departments, Corporate Universities, Extended Enterprises and Training Companies. Covering the whole training process: ?nance, logistics, administration, sales and portal, Training Orchestra has proven its efficiency with over 300 satis?ed clients, 500,000 users and $1.5 billion of training budgets managed.