Measuring Learning Return on Investment (ROI)
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- Опубликовано: 30 июл 2024
- ℹ️Learning and development is an area that most organizations are investing in. But how do you know if your efforts are paying off? When it comes to learning initiatives, calculating the return on investment can be a useful way to determine how well an initiative is working-and whether or not you should continue investing in that particular project or program. It's also helpful when trying to justify funding requests at higher levels within your organization.
In this video we’re talking about calculating the ROI of learning, in monetary and non-monetary terms.
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Chapters:
0:00 - Intro
0:47 - What is Learning ROI?
1:52 - How to calculate learning ROI
2:56 - Tangible Learning Metrics
4:18 - Intangible Learning Metrics
5:23 - Challenges of learning ROI
6:09 - Benefits of calculating learning ROI
7:11 - Conclusion
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Currently binge watching your content! Recently was promoted as an L&D PM and am trying to get the lay of the land. It's one thing to do great instructional design and delivery, ita another to be the one to implement processes. These videos are helping boost my confidence that I CAN in fact do the job!
That's great to hear! Congratulations on your promotion to L&D PM. It's completely normal to feel overwhelmed when stepping into a new role, but it sounds like you're taking the initiative to learn and grow. I'm glad my videos are helping you feel more confident in your abilities. Remember, every successful professional started somewhere and it's okay to make mistakes as long as you learn from them. Best of luck in your new position!
I am in the same spot... Scared about my new position and role. These video lessons are so empowering. The slides are so slick and beautiful.
Thank you! 🙏
R - Result (Immediate results)
O - Outcome (changes to sustain your investment)
I - Impact (long term, social cost)
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Irina, I am a Certified ROI Professional (CRP) through the ROI Institute. Also, I teach Masters Degree Level Courses in L & D at the University of Maryland Baltimore County (UMBC). I commend you for the excellent overview of the ROI methodology! Although I don't teach an entire course on ROI, I do teach one lesson in several of the courses. WIth your permission, I would like to use your video as an introduction to the topic. Super job!
That’s sounds very interesting. Go ahead and use the video, hope it can bring more clarity to people pursuing L&D as a career choice!
Hi Irina, hope everything is blessed on your end!
It is great video to learn about ROI. I also read your article on ROI, that you shared with me in LinkedIn. Thank you so much for responding to my request on ROI knowledge. Looking forward for more articles and videos from the L& Academy.
🤗 Thank you! We couldn’t be happier that you find the videos and blogs useful!
Excellent job! Another great video from you. Make more videos with chapters it's very easy to pick essential information that way!
Thanks for the suggestion! Will do! 🤗
00:02 Calculating the return on investment can help determine the effectiveness of learning initiatives.
01:10 Calculate learning ROI by measuring gain from learning minus cost of learning.
02:15 Measuring Learning ROI involves assessing employee skill improvement and the cost of developing training programs.
03:22 Tangible metrics may provide concrete results for training programs, but intangible metrics are more important.
04:32 The ability of training program to impact job performance is the most important metric.
05:36 Measuring ROI helps determine the effectiveness of training programs.
06:43 Calculating Training ROI
07:47 Calculating learning ROI is a simple process that requires time and effort.
Crafted by Merlin AI.
Thanks Irina, another really well produced L&D pro video :)
Thanks for all your tips and demonstrating best practice
Thank you so much! 🤩
Insightful content! Congratulations!
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Informative video that clarifies various associated concepts. If someone if looking to see actual calculation though, that's missing here.
Thank you for the comment!
Amazing! Thank you.
You’re welcome!
Beautifully explained.. thank you..
Thank you! ☺️
Perfect❤
Superb ! Thank you for sharing this video ❤
You’re welcome! ☺️🤩
Well explained ROI.Thanx
Thank you! 😊
Thanks for sharing 🎉
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Nice video. Lot of learning
We’re glad you enjoy it!
Most helpful. Please share more videos.
Thank you! What topics would you like us to explore further? Also, did you know we have a blog where we share even more useful practical tips? You can find it here: www.thelndacademy.com/blog
Hi. Very informative but I have two follow up questions. You mentioned isolating the event directly impacting the ROI, but these days, employee learning is an ongoing journey. So much of the training is OJT, mentoring and coaching, self-paced learning, etc. how do you weight the ROI when there are multiple initiatives or modalities impacting the performance or behavior change?
And secondly, when you calculate, how do you account for training that’s developed once but used to train dozens or hundreds of people? Don’t you have to spread your development costs out and account for this? Thanks.
Thank you for your thoughtful questions!
1️⃣ Isolating ROI in a Complex Learning Journey: You’re right that modern employee learning is multifaceted, involving OJT, mentoring, coaching, and self-paced learning. To address this complexity, it's crucial to use a blended evaluation approach. One effective method is to use control groups or pre- and post-assessments to measure the direct impact of each learning modality. Additionally, you can attribute weights to different modalities based on their influence on the performance or behavior change observed. For instance, if mentoring sessions are known to significantly impact employee performance, a larger weight can be assigned to them in your ROI calculations.
2️⃣ Accounting for Development Costs Spread Over Multiple Uses: Great point! When calculating ROI for training programs developed once but used multiple times, you should amortize the development costs over the expected number of uses or participants. This means dividing the total development cost by the number of training sessions or participants expected over the program's lifespan. This way, the per-session or per-participant cost reflects a more accurate measure of the investment, ensuring your ROI calculations are precise.
I hope this helps! Feel free to ask any more questions.
@@TheLnDAcademy thanks for the quick response. So many factors in this process, making it a tough sell and explains why so many L & D departments don’t do this well. But in many firms, training is part of a cost center, making these steps all the more important.
@catboy721 That’s very true. And to be fair… there’s an argument somewhere in there whether the bother is really needed. At the end of the day learning, training and development can have so many wonderful benefits for the organization. And yet when you try to put them in terms of numbers, it can somewhat devalue the whole thing. We’re not saying you shouldn’t do it, but we can totally understand when someone gives up.
Thanks 🎉🎉
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Hi Irina, Your videos are awesome and very helpful to understand the concepts. However I have a doubt on the ROI calculation, I understand how you calculated cost of learning, but you didnt spoke how to present gain from learning into numbers. Say even if I conduct a survey and took rating of the course delivered on scale of 5, and average for the training came out to be 4.1, now how would I use this rating to calculate the ROI ?
ROI had nothing to do with feedback. It’s about what the business gains from investing in the learning initiative. It could be a monetary gain or an intangible benefit. But in both cases there should be a number involved. For example, improvement in performance, sales, customer satisfaction score or a decrease in conflict or deescalation time with difficult customers.
What about behavioural trainings? That are non tangible ?
Behavioral trainings can also have tangible results. It’s about figuring out what specifically you want to see changed and then measuring it. For example, let’s say you’re doing a time management training. You can agree that one of the outcome is that people will complete their task within their working hours and not stay late. One way you could measure this is to check the computer logs of participants before and after the training. What and how it is measured need to be agreed upon in advance. And it needs to make sense for the business. Perhaps in the example above, the company can save money on overtime. Or you can calculate the productivity cost of employees.
Thanks for the revert.What about let's say an Emotional Intelligence training or communication based ?
@trainercollective9867 again, that’s something you need to decide on with you stakeholders/learners/their managers. What business metrics would be important to them? Fewer conflicts? Faster emails? More productive meetings? And of course you’d then need to decide how to measure those.
Same as Carine just watching a lot of your content as i am up for a 2nd interview for a L&D specialist job transfering from a completely different field so just getting the lay of the land but i am confused with your ROI example about the hours saved. in the video you say you have 10 employees who all spend 1 hour a day studying for 1 month and then you say they each save 1 hour per week after that month so then you say to calculate you take the 10 hours of the 10 employees and multiply by 7 and then times 52 but that would mean they would save 1 hour per day and not per week which would be even better of course but that is not what you said. so shouldn't it be 10 hours per week saved times 52 is 520 hours not 3640? also should the time invested in learning not be extracted from the number? they spend a combined 220 hours that month learning so wouldn't the saved time in 1 year be 520-220 is 300 and not 3640 as you mentioned?
Congratulations on getting to the second round of interviews! That’s already a great achievement! Well done!
As for the example, you are right, I misspoke in the video. It should be per day. But it also occurs to me that it’s not clear from what I said that the learning is a one time occurrence, not necessarily an ongoing process.
Of course, this example is just for illustrative purposes and it is rare that things can be calculated as clearly as this.
Thanks for pointing this out! I wish I could change the video. Maybe we’ll do a revised version of it later on.
Good luck with the interview.
@@TheLnDAcademy thank you for the quick response. that made it a lot clearer. also something else completely is there a single book that you would recommend i start reading for somebody brand new to the profession?
I have a blog post on this: www.thelndacademy.com/post/5-books-to-expand-your-learning-and-development-horizons. Hope this helps!