ROI (return on investment) is complex for learning and development. In other industries, it can be proved a strictly financial formula that helps you to prove the investment has worked. However, with an industry like L&D, which is so heavily based in human behaviour, it can be more difficult.
So how do you prove ROI in learning? What are the common obstacles, and how can you overcome them?
What does ROI mean in learning?
ROI looks different in learning than it does in other industries. Usually proving a return involves a great deal of quantifiable financial data. In learning and development, however, your outcomes are based on changes in behaviour.
It’s an important part of your strategy, as it helps you understand the value of your work. It also helps to inform your strategy for the future, justify your spend and potentially increase budgets. For these reasons, it’s crucial to consider how you measure your returns.
Measuring The Impact Of Learning
Most of the time, proving the return on your learning involves a little bit of guess work. You might notice an uplift in productivity, output or sales, but it’s hard to prove that this is a direct result of training. Research shows1 that this is a top 10 priority in L&D in 2024.
Currently, the process of proving ROI in learning relies heavily on Net Promoter Scores (NPS). This process involves learners rating and providing feedback on the programme they were involved in. While it does provide valuable insight, particularly when participants give elaborate and constructive feedback, it isn’t a genuine measure of your return on investment.
The Kirkpatrick model3 is a widely trusted method for measuring the impact of learning. It leverages feedback to evaluate the effectiveness of training in four ways. It looks at how learners reacted to the sessions, if there was an increase of knowledge, if participants’ made behavioural changes and the overall impact on the business.
The Problems With L&D ROI
The biggest problem with proving your return on investment is that it isn’t standardised. A huge portion of businesses don’t measure ROI at all, and about 50% of them only capture low-level data2. This could be because gathering rich data is labour-intensive. It takes a lot of time and investment to set up the proper processes that collect a high level of information.
On top of this, it is difficult to standardise when every programme is so different. You cannot compare a sales academy for retail to a women’s leadership programme. Therefore it is impossible to construct a regulated system that applies to all learning and development.
The biggest problem, however, is that there is no way to effectively quantify behavioural changes. While efforts can be made to understand the perceived impact of a training programme, it’s difficult to prove this with hard data. While you can measure profits and performance, you can’t determine – with numbers – whether someone has become a better communicator, for example.
How Alchemist Evaluates Impact
Essentially, Alchemist takes elements from the Kirkpatrick model and combines them with other models and frameworks to build a comprehensive ROI system. Our approach is bespoke, meaning we work closely with our clients from the very beginning to benchmark, analyse and provide feedback about their return on investment.
While we use the Kirkpatrick model as a baseline, we have built a more robust structure on top that goes beyond surface-level. Implementing Kraiger’s Learning Outcomes Scheme (1993)4 we are able to craft individualised evaluation journeys that are mapped to your learning programmes.
Our learning experts work in close collaboration with our clients to identify unique learning objectives. As the programme is written, designed and delivered, our scientific researcher will map psychological and management elements to those objectives. This allows us to take an evidence-based approach to evaluating the outcomes of a programme.
Want to know more?
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If you’ve got questions or want to explore a learning programme with built-in ROI mechanisms, contact us today. Our expert Alchemists will be more than happy to talk you through the process, listen to your problems and help you design meaningful learning experiences for your people:
1LinkedIn Learning Report 2024 https://learning.linkedin.com/resources/workplace-learning-report#
2D2L Redefining The ROI Of Corporate Learning, 2023
3Kirkpatrick, D. L. (1959). Techniques for Evaluation Training Programs. Journal of the American Society of Training Directors, 13, 21-26.
4Kraiger, K., Ford, J.K. and Salas, E. (1993). Application of cognitive, skill-based, and affective theories of learning outcomes to new methods of training evaluation. Journal of Applied Psychology, 78(2), pp.311–328. doi:https://doi.org/10.1037/0021-9010.78.2.311.