We Can't Just Build Training Anymore.

As many companies are impacted by budget cuts, encroaching technologies, and reductions in force, as learning professionals, we must position ourselves as business leaders. We must lead organizations into the next frontier rather than being the passive team sitting around with an open sign on our door. With many years in the L&D and Human Capital space, I've garnered insights that might challenge conventional thinking. While there's frequent talk about adult learning theories, the nuanced differences between ADDIE and SAM, and andragogy, the crux is that businesses crave tangible results. You need to zero in on tangible outcomes to set yourself up for success.

While you might have a stable job in the learning space, you could be confronted with concerns like, "Why isn't learning prioritized?", "Why are teams like Implementation creating training modules?" or "Why doesn't my educational game garner interest from leadership?". The demand for a tangible return on investment (ROI) is at the heart of these questions. The stark reality is that unless you can showcase tangible value, the nuances of learning theories are secondary. Friend Jeff Carpenter covered this very subject in his article, We Don't Deserve a Seat at the Table, back in 2015.

Here's a simple ROI perspective: take the training development cost (including your compensation, tools, materials, and more) and combine it with the training time expense for, let's say, 500 learners participating in a 30-minute online session at $40 an hour. This total should align with expected outcomes, such as increased sales or improved efficiency. You risk being sidelined if you can't link your educational approach to this business-centric calculation.

While tools like Storyline are instrumental for course development, remember that being able to build content using tools like Storyline will not impress business leaders. Elevate your perspective. Recognize that real-world learning mirrors a multifaceted campaign rather than a structured online module. Pivot your mindset: prioritize being a business-savvy individual while still being an educational expert. It might be a tough realization, but it's the corporate landscape.

Be prepared for the transformative wave of generative AI. It's set to redefine our industry rapidly. You need to be equipped to leverage AI to design and refine educational content; if not, you might be left behind. Embrace the AI evolution; it's an opportunity, not a threat.

In today's data-centric business environment, justifying investments is critical. Training programs, pivotal for organizational growth, are not exempt from this scrutiny. The Return on Investment (ROI) of training dives deep into the intricacies of not only overt costs like program development but also intangible factors such as productivity loss.

How can we apply an ROI-driven lens?

Step 1: Quantify the Learning Development Expenditure

Begin by cataloging all expenses related to the training initiative:

1. Development Expenditure: This encompasses funds channeled towards content creation, procuring educational materials, onboarding expert trainers or consultants, and leveraging advanced eLearning tools.

?2. Operational Expenditure: This pertains to costs incurred during training delivery, spanning trainer compensation, technological infrastructure, and platform licensing.

3. Participant Expenditure: Quantify the wage expenditure for each participant during the training. A straightforward method is multiplying the hourly compensation of an attendee by the course duration.

4. Opportunity Costs: A nuanced component, this signifies productivity losses while employees divert from their core tasks to undertake training. Calculate this by determining the average output value of participants and contrasting it with their training duration.

Step 2: Project the Learning Delivery ROI

Post expenditure calculation, turn your focus to potential returns. You can begin by identifying training objectives. Are they tied to sales augmentation? Elevating client satisfaction? Enhancing operational efficacy? Quantify these objectives in monetary terms and juxtapose them against accumulated costs.

Using the sales training example: if the goal is a sales boost of $50,000 with the training costing $20,000, the ROI is derived from the net gain ($50,000 - $20,000) relative to the investment ($20,000), resulting in an ROI of 150%.

Step 3: Ascertain the Realized ROI

Subsequent to the training's roll-out, monitoring actual outcomes is imperative. Given that tangible benefits, like surging sales or productivity jumps, may have latency, scheduling periodic assessments post-training is advisable for accurate impact analysis.

Where might we monitor performance data?

• Customer Support Tickets

An often-overlooked treasure trove of insights, support ticket data can highlight areas where employees may need more understanding or skills. For instance, frequent queries about a specific product feature may suggest that staff need more training in that area. L&D teams can then create targeted training materials to bridge this knowledge gap.

• Departmental KPIs

Departmental Key Performance Indicators (KPIs) can reveal the strengths and weaknesses of a team. For example, if a sales team consistently needs to catch up to its targets, it may indicate a need for additional sales training or a review of the current sales training strategy. By monitoring these KPIs, L&D can provide responsive and relevant training solutions.

• Employee Performance Data

Performance metrics can provide valuable insights into individual employees' skills and areas for improvement. This data can guide the development of personalized learning paths, help employees reach their full potential, and contribute more effectively to the organization's goals.

• HR Data

HR data is a gold mine of employee information, encompassing everything from personal attributes to career history, engagement levels, and more. This information can be instrumental in designing a learning strategy. For instance, data on employee turnover can highlight areas where a lack of skills or knowledge could be causing frustration and leading to attrition. Understanding the reasons for employee departures can help the L&D team design programs to address these issues. Likewise, employee performance and promotion history data can be used to identify high-potential employees who might benefit from targeted development programs.

Step 4: Refine and Iterate

Should the ROI resonate with your projections, commendable! If not, view it as an analytical treasure trove. Extract insights to finetune forthcoming training endeavors. Assess whether the course can be condensed, cost-optimized, or more impactful.

In Conclusion

We know our people need to learn but at what financial cost to the organization? Why is building X better than buying Y? Do you have the data to support your decision? Navigating the maze of training ROI can be daunting, but it's a cornerstone for rationalizing organizational investments. A meticulous, data-backed evaluation ensures resource optimization and finetunes your overall learning strategy.