assess the ROI on learning and development

How to Assess the ROI of Learning and Development Programs 

Workplace training is crucial to improve employee performance and drive business impact. Hence company invests in workplace training. However, the top management would want to know whether they are getting the best return on their investment. Therefore it is crucial to assess the ROI of learning and development. 

Assess the ROI of Learning and Development for Your Employees

Assessing learning ROI is critical to measure the cost of learning and development against the benefits to both the organization and the employees. Assessing the ROI of learning and development also throws light on learning areas that need attention. For instance, sales reps are enrolling in the courses but aren’t meeting their quarterly goals. So the L&D can delve deep into the reasons for poor performance and rethink their L&D strategies to bridge the performance gap. 

According to McKinsey, only 30% of companies take the time to look at training metrics beyond employee feedback.

Assessing learning ROI is crucial, but most L&D professionals struggle to measure the return on investments 

The common formula used for measuring the ROI of learning and development looks like this: 

Equation to determine ROI for learning and development

Example  – A company invested $25,000 in training sales reps. This helped in boosting sales and earning $175,000.

ROI = (175,000 – 65,000)/65,000*100 = 169%

The company received $2.69 for every dollar spent. 

However, the ROI formula isn’t a crystal ball that will answer all your questions. For instance, the ROI of your last quarter is 20%. Would this information be enough to measure the success of L&D initiatives? 

Wouldn’t you want to know 

  • If it is a good or bad ROI?
  • What were the hurdles that prevented you from achieving a higher ROI?
  • What are the improvement areas?
  • How can you boost your ROI?

Without amassing additional information, it is difficult to say if the L&D initiatives were successful in driving the best ROI. 

Archana Bhaskar, CHRO of Dr. Reddy, India, shares effective tips to assess if the time, money, and resources invested in L&D are reaping results and succeeding in meeting business needs. Check out the full conversation of the L&D expert with Sunita Arora, L&D advisor, and strategist, as she unveils tactful ways for assessing the return on L&D investments. 

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