The ROI of Learning: How to Measure the Impact of Education on Business Growth
Many organizations agree that education leads to growth for employees and companies. Research shows that education is a wise investment for organizations: “68% of workers say they would stay with their employer throughout their career if the employer made an effort to upskill them” (Source: Annual Career Optimism Index)
However, it’s often difficult to understand just how much and which education benefit programs are the best investments. The tips below will help you measure results more effectively.
Top challenges in measuring ROI in learning initiatives
When it comes to measuring return on investment (ROI) from learning initiatives for employees, it can be challenging due to various factors.
- Intangible benefits: The impact of learning initiatives on employee performance and productivity is often intangible and not easily quantifiable. Soft skills development, improved collaboration, and enhanced communication are examples of outcomes that may not have straightforward metrics – but are still valuable.
- Measurement tools and methods: Selecting appropriate measurement tools and methods is crucial. Traditional assessment tools may not adequately capture the effectiveness of certain types of learning, such as experiential or on-the-job learning.
- Complexity of job roles: Measuring ROI becomes more challenging in complex job roles where performance is influenced by a combination of factors. It may be difficult to attribute changes solely to a learning initiative when other external factors play a significant role.
- Lack of baseline data: Without adequate baseline data on employee performance before the learning initiative, it becomes challenging to measure improvements accurately. Establishing clear performance benchmarks is essential for meaningful ROI calculations.
- Technology: In an increasingly digital learning environment, integrating and leveraging technology for tracking and measuring employee progress can pose challenges. Issues such as data privacy, security, and compatibility can impact the effectiveness of measurement systems.
To overcome these challenges, you’ll need to choose education programs with measurable objectives, and continuously assess the effectiveness of their learning programs over time. Regular evaluations and adjustments can help improve the accuracy of ROI measurements for employee learning initiatives.
Key metrics for measuring ROI for learning initiatives
Education benefits can also help save tens of thousands of dollars – per person – in costs related to replacing employees in turnover situations. In many industries, replacing a robust frontline workforce is an enormous expense due to high levels of turnover, some averaging over 100% annually. “Among positions earning $30,000 a year or less, which includes more than half of all U.S. workers, the cost of replacing an employee is almost equal to those positions earning less than $75,000 annually.” (Source: Center for American Progress)
Investing in the right education programs can increase retention, saving an organization on the cost of turnover.
In order to take into account the tangible and intangible benefits of gaining knowledge and skills, it’s important to consider a mix of quantitative and qualitative metrics.
Quantitative Metrics:
- Cost of learning: Direct costs include expenses related to designing, developing, and delivering the learning program. Indirect costs are associated with employee time away from work during learning.
- Productivity metrics: Output measures assess changes in employee productivity, efficiency, or output after completing the learning.
- Employee performance: Key performance indicators (KPIs) help link learning outcomes to elements that are relevant to each individual’s role.
- Retention rates: Track the retention of employees who have undergone learning compared to those who haven't.
- Time to competency: Measure the time it takes for employees to reach full productivity after completing the learning.
- Employee engagement: Gather number-driven feedback through surveys on the learning program and its impact on engagement. Participation rates demonstrate the level of employee engagement in voluntary learning programs.
- Employee development: Track the number of employees who create and follow through with personal development plans post-learning.
- Return on time invested: Calculate the time employees spend in learning versus the resulting performance improvement.
- Technology adoption: Track the adoption and proficiency in using new technologies or tools introduced during learning.
- Cost savings: Identify and quantify any cost savings resulting from improved efficiency or reduced errors.
Qualitative Metrics:
- Employee feedback: Collect qualitative data on how employees perceive the learning, its relevance, and its impact on their work. This can be done through focus groups and surveys with open-ended answer fields.
- Skill acquisition: Self-assessment: Ask employees to assess their own skills before and after learning. Manager assessments: Gather feedback from supervisors on observed improvements in skills.
- Knowledge transfer: Assess how well employees can apply the knowledge gained from learning to their daily tasks.
- Leadership development: Discover potential leaders within your organization as a result of leadership learning programs.
- Team collaboration: Evaluate improvements in team collaboration and communication.
- Innovation and problem-solving: Get a sense of upticks in innovative ideas and creative problem-solving after learning.
- Employee satisfaction: Observe changes in attitudes and motivation before and after participating in learning programs.
The selection of metrics needs to align with the specific goals and objectives of the learning program and your organization's overall strategy. Combining both quantitative and qualitative measures provides a more comprehensive understanding of the impact of learning initiatives on employee development and organizational success.
Turnkey solutions like Pearson Accelerated Pathways help achieve goals without the stress
By offering employees a means to get the development they need to support the career they desire, the potential benefits are many and measurable. Plus, you don’t have to worry about time and resources needed to manage the learning experience – it’s all part of Accelerated Pathways.
Options include Associate, Bachelor’s, and Master's degrees as well as graduate certificates. Remedial courses are also available for learners who have completed high school education but may not be fully ready for college-level work. You can learn more and schedule a time to speak with an education benefits expert here.
Your organization will benefit from the following advantages:
- Improve employee skill sets with future-focused, career-applicable education
- Reduce turnover and absenteeism
- Deliver new skills to roles impacted by technology and automation
- Minimize speed-to-competency for roles affected by worker retirement
- Boost productivity, morale and brand loyalty
- Encourage efficiency and profit gains
- Increase employee engagement
- Increase talent pipeline
- Improve Net Promoter Score
- Increase employer brand value
Don’t hesitate – connect with a representative at Accelerated Pathways soon!
