Business MetricsMetrics

Should ROI Be a Learning and Development Metric?

Many organizations consider ROI as a relevant parameter to measure the performance of their initiatives. However, it was the least favored learning and development metric among the surveyed business leaders, according to Chief Learning Officer Magazine’s 2020 State of Learning report. Instead, the leaders would choose staff engagement (48.8%) and top employee attrition or retention (48.6%). In this article at CMS Wire, Dom Nicastro explores if ROI should be a learning and development metric for any organization.

ROI as a Learning and Development Metric

According to RedThread Research cofounder and principal analyst Dani Johnson, ROI is a “dead metric.” He adds that “it gives you a report card on something you have already done, rather than providing you information that helps you facilitate improvement in the future.” Addison Group L&D VP Asfa Malik shares a similar view.

You need to consider retention rate and improvements in your service or product quality as a learning and development metric after completing every employee development program. Include related questionnaires in your exit, post-training, and customer surveys. These will enable you to discover how productive your initiative was.

How to Derive Value

Lattice cofounder and CEO Jack Altman remarks that ROI can be a good learning and development metric if you measure a short-term milestone. You will see a spike in productivity because of skills employees learned or acquired in training. Apart from these tangible results, learning and development programs also increase employee engagement and reduce attrition.

According to the survey participants for the 2020 State of Learning Report, training provides the following benefits:

  • ‘General training output data
  • Training output data aligned with corporate initiatives
  • Learner satisfaction with training
  • Employee satisfaction with training availability
  • Employee engagement
  • Business impact
  • Employee performance data
  • Planned to actual budget, expense, revenue data for training group
  • Stakeholder satisfaction with training data
  • ROI measures
  • Net promoter score
  • Employee satisfaction with company data’

However, the benefits are not always quantifiable like a profit and loss statement. So, Johnson confirms that ROI must not be a learning and development metric. To view the original article in full, visit the following link:

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