Here’s How You Can Maximize Your L&D ROI

You might be familiar with this meme. It’s a line from a Tom Cruise movie Jerry Maguire. And it carries a deep and universal message too – in any sphere of activity, especially in business, which revolves around money. A business is considered successful if it gives us more money than invested, or to put it technically, a positive Return on Investment (ROI).  
 
If you are in Learning and Development (L&D), you know a lot riding on your shoulders. Notably, in most organizations, L&D is a “cost center”. One of the downsides of this, of course, is that during lean times (such as the COVID-19 pandemic or the 2009 Recession), you could face budget cuts or even downsizing. Secondly, many L&D initiatives do involve costs (training materials, coordination,non-productive time, etc.) – which is why it’s difficult to always get a buy-in from the senior management.
 
Clearly, you need to demonstrate(in a big way!) that your initiatives can (and do) significantly contribute to the organization’s revenue and profitability. Luckily, there are ways in which you can bring (and show) good ROI. As a one-stop destination for your business and training needs solutions, we present some tips for maximizing the ROI. 

1. Do a thorough needs analysis (and identify training goals, if applicable): 

Every organization is based on some values and has business goals. To achieve these goals and stay aligned with the values, it institutes business processes. These processes need to be imbibed by employees. Also, in response to internal and external factors(such as a change in leadership, introduction of government regulation, the arrival of new technology, etc.) these processes might need to be updated. This creates a possible business need for training, a use case for L&D intervention. That said, training is not necessarily the answer to this problem.  
 
First, it’s important to envision the solution, define the enabling steps, and state the numbers that you believe will address the business problem. Here, you could use the SMART rubric for goal-setting. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound objectives.
 
For example, you might be looking to, say, increase employee productivity by 20%. So, you could define the goal as: One year after completing this training module, salespeople will be able to increase customer conversions by 20%.
 
It is also important to ask if training is really needed to solve the problem and whether all employees need it. For example, if you specifically want factory workers to improve the efficiency and quality of their work, they need not be trained in customer service. In case training is needed, you need to ask whether a new solution is required or whether the business problem can be solved with existing materials and internally, through peer support, existing materials, or in-house experts. If yes, nothing like it. But if the answer is no, you might need to seek the services of a learning solutions provider for custom learning and training support. By consulting an external L&D specialist, you can be assured of quality and effective training content – make it a point to choose a reliable provider – more on this later. 

2. Identify the appropriate modality for delivering training
 
Once you have your training needs defined, it’s important to identify the modality in which you want the training to be delivered. For example, you might choose to simply jazz up an existing PowerPoint deck on time management as a low-cost option. Or you can repurpose it into interactive eLearning for better engagement. What’s more, you could look to delight your employees by treating them to a gamified learning experience, rather than by asking them to take plain old eLearning.
 
Remember that each modality comes with its own costs. Based on the value added and the effort involved, be ready to spend money. Basically, immersive modalities are often expensive.
 
Take a look at this article to guide you in choosing a modality of your choice.
 

3. Choose a suitable authoring tool and Learning Management System
 
After finalizing the learning modality, you might need to zero down on the authoring tool and Learning Management System (LMS). Be aware that each tool and LMS has its own pros and cons and some of them might be better suited for the training delivery style.  
 
We recommend you read this article to guide you in choosing an authoring tool of your choice. 

4. Monitor learning and analyze the impact of training at each point. Evaluate.
 
Since you are looking to maximize the ROI, you might wish to monitor the efficacy of the training at every stage. Popular models for L&D ROI calculation include the Kirpatrick, Phillips, and Kaufman models. Also, you might need to refer to LMS dashboard analytics to fetch data about learners such as completion rates and learner reactions, as well as business data to gather data about how the training intervention has ultimately contributed to enhanced profitability in the organization. Be mindful, however, that you might need to carefully isolate the effect of training from other factors that could have contributed to organizational efficacy. 

Conclusion: 

While identifying and demonstrating the effectiveness of a training program might be a cumbersome task, it is well worth the effort. We recommend you consult an expert L&D partner to not only help create fantastic training but also evaluate it. Do visit our portfolio and look at our L&D success stories.