If you’re a chief learning officer or learning leader, you’ve likely been asked to prove the return on investment (ROI) of your training programs. Chances are you walked away from the process feeling defeated. You’re not alone. This feeling isn’t because of a lack of planning or less-than-stellar presentation; it’s simply because proving the ROI of training programs is a decades-long conundrum that many training leaders have still failed to solve.
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The reason learning leaders struggle to prove the ROI of their corporate learning and development (L&D) programs, according to learning analyst Josh Bersin, is that “training doesn’t generate any revenue or any profit — it supports other lines of business that generate revenue and profit.” But, by virtue of supporting business line goals, there can be a connection between learning outcomes and performance if the program design is based on these metrics from the outset.
Karen Hebert-Maccaro, PhD, Chief Learning Experience Officer at O’Reilly Media, agrees, saying, “Learning is a human process, not a financial one. You can’t use typical metrics to prove ROI, given that the return is likely to be highly distributed over time and space and hard to observe.
“The answer, in part, is to start using correlational metrics to tell a story about how learning engagement relates to performance.” There is a new need for learning technology to combine engagement, reinforcement, and proficiency metrics with performance outcomes to measure the true impact of L&D programs.
That seemingly indirect path can be tough to comprehend, especially as training expenses have increased to an estimated $130 billion globally. As organizations increase their L&D spending, it’s understandable that they want to see a greater ROI. But in order to do so, they must shift away from purely financial measurements and instead correlate these with metrics like proficiency, engagement, knowledge gaps, and coaching interactions as leading indicators of performance.
Correlation Metrics and Proficiency Are the Missing Links
By focusing on correlation metrics rather than financial analysis, CLOs are able to reinforce that the true goal of L&D is to improve employee performance, productivity, and, proficiency — or, as Qstream refers to them, the 3 Ps. Performance and productivity are more obvious measures from CRMs or balance sheets. A correlation metric like proficiency, on the other hand, is the missing link and a leading indicator of whether teams have the capabilities needed to meet goals.
Why proficiency? All employees “do” things. They make calls, deliver presentations, or visit customers — all actions that create results. So if it’s a level playing field and all your employees are doing the same thing, why aren’t they producing the same results? The reason is how things are done impacts the quality of those results. Some employees are simply more proficient than others in certain areas.
Putting Data Into Action
Measuring proficiency does more than help you make sense of training results. It informs frontline managers where they can focus individual coaching efforts and guides senior management in shaping an adaptive learning programs. Having this data allows managers to make an immediate impact on employee performance — rather than waiting for mid-year reviews, customer support surveys, or other forms of evaluation.
Additionally, proficiency metrics can help spot upskilling and reskilling opportunities, which 65% of today’s employees expect. The ROI potential of upskilling employees can help a business be more agile with a more adaptable workforce, which is key in competitive and rapidly changing markets. Plus, reskilling employees to meet new business needs could save untold costs by slowing voluntary and involuntary employee churn and minimizing recruitment and onboarding expenses.
Measuring Proficiency Through Microlearning
The most effective way to measure proficiency and obtain the data needed for measuring training programs is through a best-practice microlearning platform like Qstream. Microlearning is a method of continuous training that breaks down complex or detailed learning content into small, digestible scenarios that are repeated over time. This type of learning — rather than “one-and-done” or “crash-course” methods like intensive classroom onboarding programs — has been scientifically proven to increase knowledge retention by up to 170% compared to traditional training methods.
Change What and How You Measure
If CLOs and learning leaders continue to try to measure the ROI of their training programs by only using lagging financial measurements, they’ll fall short in proving the actual ROI of their L&D initiatives and be able to take specific action on the areas which boost performance, or make it fall short. Correlation metrics are the best indicator for frontline managers to determine whether an employee is capable of performing optimally, and microlearning is the best way to discover, improve, and show proficiency.
To learn more about why you need to change what and how you measure the ROI of your training programs, download our eBook, How to Quantify the Value of Corporate L&D Programs.