Measuring the ROI of Your Learning: Step-by-Step Guide

What is learning ROI?

Return on investment (ROI) is a measure of the profitability of an investment. In the learning field, learning ROI refers to the financial benefits an organization derives from investing in learning and development activities. These financial benefits can include, among other things, increased productivity of employees, improvement of employee skills, and the reduction of employee turnover.

How to calculate the ROI of learning?

To prove the return on investment (ROI) of a learning investment, you will need to measure the value of the benefits that the learning has brought to your organization. You can do this by collecting data on various metrics, such as the increase in productivity, time savings, cost savings, reduction in employee turnover, and improvements in employee skills, etc.

To calculate the ROI, you will need to divide the benefits of the learning investment by the cost of the investment. You then multiply the result by 100 to express it as a percentage. For example, if the benefits of the learning investment are $10,000 and the investment cost is $5,000, the ROI would be 200% ($10,000 / $5,000 x 100).

It's worth noting that the benefits of a learning investment may not always be visible immediately, and it may take some time for the impact of the learning to be realized. In these cases, it is essential to track the benefits over time and regularly assess the ROI of the learning investment to ensure that it is delivering value to your organization.

If you need help to show the ROI of your learning initiatives and secure funding for them, we've just the solution for you! We have put together a list of metrics to help you forecast the return on investment for new learning technology and convince the decision-makers to approve your proposal. We've also included a few examples to guide you in measuring and quantifying your key objectives step-by-step. Let us help you make that learning investment happen!

You can use many different metrics to calculate the return on investment (ROI) of learning. The best-suited metrics will depend on your learning initiative's specific goals and objectives. Some of the most common metrics and benefits to consider when calculating learning ROI are unpacked below.

The top 8 metrics to track the ROI of learning

1. Increased productivity

You can measure productivity gains in several ways, including tracking the length of time employees take to complete tasks, the number of errors they make, or the number of products or services they produce. Organizations can improve productivity and reduce the number of mistakes made by providing employees with a learning platform that helps them acquire new skills quickly and efficiently. This can increase revenue and improve the overall efficiency of the organization.

2. Improved employee skills

Skills-based learning platforms provide employees with targeted, personalized training that helps them develop the specific skills they need to excel in their roles. You can measure skills-based training in a number of ways, such as assessments and skills tests within the learning platform itself. By tracking the results of these tests and assessments, organizations can measure the effectiveness of the training and determine how well employees can apply their new skills. You can also identify areas where additional training may be needed to improve the overall performance and productivity of the organization.

3. Reduced employee turnover

‍You can measure the reduction in employee turnover by tracking changes in the number of employees who leave the organization and the saving in the cost of recruiting and training new employees. By providing employees with training and development opportunities, organizations can help to retain employees and reduce turnover. This can be accomplished in many ways, such as providing opportunities for employees to grow and advance in their careers with personalized training that helps employees to develop the specific skills they need to excel in their roles.

4. Increased customer satisfaction

Measuring increases in customer satisfaction levels involves tracking the number of repeat customers and changes in customer satisfaction scores. An effective way to improve customer satisfaction is by providing employees with targeted training that helps them develop the skills they need to provide better customer service. By offering high-quality customer service, organizations can encourage customers to return and do business with them again, resulting in increased repeat business and higher customer satisfaction. This can ultimately contribute to the organization's financial success and help it to stand out from its competitors.

5. Improved financial performance

By helping employees acquire new skills and improve their performance, a skills-based learning platform can directly contribute to the organization's financial success through increased revenue and profit. This can be measured by tracking changes in revenue and profit over time and can help organizations to achieve their financial goals and remain competitive in their industry.

6. Increased employee engagement

Using an adaptive learning platform can increase employee engagement by providing employees with a personalized learning experience tailored to their interests and goals. This can lead to increased engagement and job satisfaction. Both can be measured and tracked through recurring surveys and pulse checks that track changes in employee engagement, motivation, and satisfaction levels.

7. Enhanced company reputation

Using a learning platform that helps employees grow and develop can enhance the organization's reputation by providing employees with the training and development opportunities they need to excel in their roles, leading to positive feedback from customers and other stakeholders. You can measure the changes in the company's reputation among employees, customers, and other stakeholders with tools like the net promoter score (NPS). This can help the organization stand out from its competitors and build a positive reputation in the industry.

8. Reduced training costs

The use of modern learning platforms can reduce training costs by providing a more efficient and cost-effective alternative to traditional training methods. The cost savings can be calculated by comparing the cost of the learning investment to the cost of traditional training methods. Savings could include the bundling of various platforms together or reduced learning time.  

It's important to note that these are just a few examples of the many metrics and benefits of calculating the ROI of learning. The most appropriate metrics for your organization will depend on your learning initiative's specific goals and objectives.