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By Janneke Roelofs, Top Employers Institute
By Janneke Roelofs, Top Employers Institute

A 2020 vision for Learning ROI

In October, budgeting for the year ahead will move sharply into focus for many organisations. With businesses operating in highly uncertain environments, they will inevitably look very closely at the things that they can control in 2020 – their costs. Tough questions can be expected around the return on investment (ROI) on every line of spending, with the ROI of the Learning and Development (L&D) budget notoriously hard to assess. Therefore it’s important for employers to understand that with L&D currently undergoing a strategy and delivery revolution, the way they assess the value of learning may also need to change.

The very best businesses understand this already. Research among our 1,500 certified Top Employers organisations globally shows a trend over recent years away from measuring a direct/quantitative ROI on specific L&D programmes, in favour of measuring the retention of knowledge within a business. Barely a quarter of them (28%) measure the former – the same proportion as four years ago – yet the number measuring “knowledge retention over time” has increased sharply to 60% from 41% over the same period.

This shift towards retained organisational knowledge runs alongside other important changes in the way corporate learning is being organised and assessed. There has been an evolution away from the Kirkpatrick model, a previously tried and trusted way for L&D professionals to measure the effectiveness, with the momentum now with more personalised forms of learning. Put simply, this means a move away from the model’s more structured “What have you learnt and how do you rate it?” typical approach and towards a more user-oriented form of learning, one which asks instead “What is your role and how has the learning helped you perform more effectively?”

In essence, a new learning bargain is being struck between employer and employee – one from which both can benefit. L&D professionals can look afresh at how their organisation is performing and assess what strategic learning challenges need to be addressed to improve an individual’s performance directly for the benefit of the business. Similarly, employees now want and expect to have a greater say in their career development - a personalised career path, much in the same way they expect personalised service as customers.

To deliver on this bargain and maximise ROI from learning therefore begins with a laser-like focus on what the L&D strategy should be. Clarity around business purpose and how L&D helps meet this purpose is everything: Our Top Employers research shows us that nearly all of those we surveyed have consistently clear objectives for their Learning and Development strategy (97%). But strategy is no longer a byword for structure - and this is why the same percentage design their L&D framework to be flexible enough meet the need of different job roles or levels throughout an organisation. Similarly, over three-quarters (76%) can now say that all of their employees have a Personal Development Plan.

Methods of L&D delivery are also changing. The retention of knowledge and growing popularity of social learning in the pursuit of learning is clearly reflected in our research – over three-quarters (78%) of our Top Employers have now invested in “knowledge bases” to retain learning for the benefit of the organisation (up from 64% in 2015), while the delivery of mobile learning is used by almost as many (73%) - and far more widely than previously (42% in 2015).

One thing hasn’t changed – the pressure to measure ROI remains intense, even though learning itself is evolving rapidly. According to the Leo Learning annual survey of more than 1,000 learning decision makers from global organisations – Measuring the Business Impact of Learning in 2019 – the demand for data comes from the very top. Over two-thirds (67%) of L&D professionals surveyed feel under pressure from senior executives to measure the impact of learning – with a significant increase of 38 percentage points in a single year among respondents agreeing strongly with the statement.

While the demand for key performance indicators (KPIs) is clearly there, so too is the growing capability of technology to number crunch and deliver them. Our own Top Employers HR Best Practices Report 2019 contains several great case studies highlighting the changing way in which learning ROI is now perceived and measured. And, while the stories differ in their detail, they all reflect an emerging fusion between humanity and technology in delivering high ROI learning programmes. On the one hand, L&D professionals in the best performing businesses can best show the value of learning via transparently human and honest feedback with the leaders and managers they seek to serve. And on the other hand, to have the best possible discussions and decisions requires greater use of technology to allow accurate measurement, tracking and planning around individual performance before, during and after a learning intervention.

So this month, as many organisations dust off their budgeting processes and templates, it’s worth remembering that learning and development is undergoing a revolution, one for which a narrow financial ROI no longer suffices. A new 2020 vision for learning ROI is now required.