How to measure the business impact of L&D

24 Jun, 2022Renske Start

Impact. When working on learning and development this is definitely a keyword. Often used, but not always substantiated. The Workplace Learning Report from LinkedIn, conveyed that in 2020 only 8% of CEOs saw the business impact of L&D programs, and even fewer than 4% had a clear ROI. (1)

But with L&D professionals investing so much time in finding the right L&D partner, setting up learning journeys, and providing the right training at the right time, you would really like to see some changes. Something tangible to show stakeholders. Employees learn new skills, increasing productivity, and a healthier organizational culture by the benefit of D&I.

But how to measure learning? How do you evaluate, measure and demonstrate the business impact of your learning strategy and training?

Start: Organization’s needs

The first step in any L&D strategy is of course: looking at the business. What do your employees need in order for the business to grow? What skills are important now? What is the goal you would like teams to move towards? What do your employees need in order to be resilient enough to cope with technological changes or even disruption?

Start with an analysis that gives you an overview of what a ‘future-proof workforce’ means for your organization and what the needs are. So that talent, learning, and your key business strategies all align. This way you can make sure that your organization and its workforce will still be relevant in five or ten years’ time.

According to Deloitte, 59% of HR teams first need more information about employee readiness, while 38% struggle to identify employee needs. So start first with the skills, and the skills gap within your industry and organization.

Want to know which steps to take so you can map out your organization’s needs? Read more.

2. Identify the organization’s skills gap

Investing time, costs, and effort into development means that naturally, you would like your L&D efforts to be of relevance and to pay off. You would like to see change and see your employees improve. So what are the skills that your current talents need or lack?

Match these needs to important proven skills needed in the future. A practical example of this is: if your turnover is higher than you would like, identify the drivers behind this challenge. Is there perhaps a hurdle with leadership or communication? Then set up a learning program that develops these skills in order to support your employees. So that in the future employees will feel more comfortable in their role and are more likely to stay.

Make sure your learning is aligned with business skills. Rather than looking at hours of learning and course completion rates, instead focus on identifying what skills are lacking in your organization. With that alignment and clarity, L&D can create a skill-building program that’s in lock-step with your business strategy.” Lori Niles-Hofmann Senior EdTech Transformation, NilesNolen

By closely following renowned institutions such as World Economic Forum, Harvard Business Review and McKinsey in their research on future-proof skills, Lepaya has defined a set of 8 Power Skills. Important future-proof competencies, based on market needs, that require both soft and hard skills. Functional skills, such as math or coding, alongside non-functional skills, such as initiative and creativity.

Through assessments, you can work with your L&D partner to identify the gaps between employee, skill and function. In doing so, look at:

  • What are current skills levels?
  • Where do we want the organization to go?
  • What jobs are going to change due to automation, where does that affect our organization?
  • What skills are a priority for development?
  • What capabilities do my current employees have? What are they good at, what Power Skills do they need to further upskill or start reskilling?
  • Where are the most mismatches?

Then you can start bridging the gaps.
Want to start with an assessment? Research what your teams are good at and what still needs to be worked on with the Team Scan.

3. Measure engagement in order to measure learning

Next up you can start by measuring your core metrics. Or in the beginning start by shaping your core metrics.

By leveling up the learning data you currently track, you can establish a link between your learning metrics and the KPIs associated with your organization’s business objectives.” (2)

Engagement and effectiveness are at the core of your kpi’s on impact. Engagement is key, for all of the obvious reasons. If your employees are not involved they will not grow. Have you already started with the implementation of training programs? Then it is time to start measuring engagement data so you can immediately see what works and what doesn’t for your teams. Whether or not your employees are attending, and their attendance figures, are often the first metrics. So are metrics on how many of your employees are interested in the training you or your L&D partner provides.

These metrics are used most frequently:

  • Hours of training delivered
  • Completion rates
  • Compliance rates
  • Training scores
  • Satisfaction ratings
  • Cost of training

But these hard metrics alone won’t provide you with a full overview of your learning and development impact. Because why aren’t many of your employees signing up? Or if they are why they are not attending? Are you training the relevant skills at the right time in your employees’ careers? It’s the full employee journey you want to dive into. The more appropriate the training, the higher the employee engagement. And the higher the employee engagement, the more impact you’ll see in employees who show that they’ve learned new skills and are able to outperform within their role.

If you want to measure the full scope of your impact use the KirkPatrick model. This model, next to the hard data described above, measures behavioral change and focuses on the effectiveness of your training. Are your employees improving and is your organization gaining a healthy ROI? (3, 4)

Source: Schoox (5)

4. L&D integration: learning in the flow of work and continuous optimization

You’re measuring engagement and the effectiveness of your programs because you would like to see higher productivity rates and most important behavioural change. What have your employees learned from their training? And will they be able to implement this into their role? So they feel more comfortable (happier) and have all the tools to outperform.

Behavioral change is very important if an employee wants to master new skills. Training is not a stand-alone activity. It is part of a learning path that leads to development in behavior, skills you have only learned when you can also apply them practically.” (6)

Learning in the flow of work is integral to this. Integrating learning and development into your employees daily flow of work, ensures that learning will be retained. Because development that requires more than 10 clicks at a time is proven not to be effective. When reskilling and upskilling, the information should be easily accessible for example through integrations with Microsoft Teams or Slack. That way your employees make real progress, and learn skills that stick as routines.

5. Keep track of your L&D progress with reports

Instead of isolated chunks of learning information, as an L&D specialist you want a manageable and measurable up- and reskill trajectory. It is therefore important to make the skills transparent but at the same time set goals: what increase in productivity do you want to see? With reports on the progress (producitivitsmetrics) you measure the impact of your organization and you can share this with your stakeholders.

Read more about KPMG and how they work on upskilling through personal, dynamic development programs.

KPMG Case Study

How to measure learning

There is a lot to measuring your L&D effort and many steps on how to measure learning. Would you like to have a chat about learning analytics? Or your L&D strategy.

Reach out

Sources

  1. https://blog.schoox.com/measuring-business-impact-of-ld-part-1/
  2. https://www.td.org/professional-partner-content/measuring-the-business-impact-of-l-d-connect-learning-data-to-kpis
  3. https://lepaya.com/en/behavioral-change-is-what-matters/
  4. https://elearninginfographics.com/measure-the-roi-of-online-training-using-kirkpatricks-model-of-evaluation/
  5. https://blog.schoox.com/measuring-business-impact-of-ld-part-1/
  6. https://lepaya.com/en/behavioral-change-is-what-matters/