Evaluating Training ROI for Businesses

HR: Employees are leaving jobs. CFO: Do we have data on why they’re leaving? HR: Yes. 70% of our turnover is tied to unmet needs like growth, recognition, and flexibility. CEO: But how much does it actually cost us when they leave? HR: Each lost employee costs 1.5x their salary to replace, not to mention the productivity gap. CEO: We need to reduce spending. We can't spend on engagement programs. CFO: What’s the impact of these engagement programs on retention? HR: Programs focused on growth and recognition have reduced turnover by 25%, saving us $3M annually. CEO: Are there other benefits to meeting employee needs? HR: Absolutely. Employees who feel valued are 30% more productive and report higher satisfaction. CFO: What about profitability? CHRO: Engaged teams generate 21% higher profitability. It’s not just about keeping them. It’s about keeping them productive and motivated. CEO: So cutting back on programs that meet employee needs could cost us more? CFO: The data shows there’s a significant financial impact. HR: Meeting employee needs isn’t just an expense. It’s an investment in retention, productivity, and profit. The lesson? Employees quit when their needs go unmet, whether it’s for growth, recognition, or flexibility. Invest in your employees.

The DOJ consistently says that compliance programs should be effective, data-driven, and focused on whether employees are actually learning. Yet... The standard training "data" is literally just completion data! Imagine if I asked a revenue leader how their sales team was doing and the leader said, "100% of our sales reps came to work today." I'd be furious! How can I assess effectiveness if all I have is an attendance list? Compliance leaders I chat with want to move to a data-driven approach but change management is hard, especially with clunky tech. Plus, it's tricky to know where to start– you often can't go from 0 to 60 in a quarter. In case this serves as inspiration, here are a few things Ethena customers are doing to make their compliance programs data-driven and learning-focused: 1. Employee-driven learning: One customer is asking, at the beginning of their code of conduct training, "Which topic do you want to learn more about?" and then offering a list. Employees get different training based on their selection...and no, "No training pls!" is not an option. The compliance team gets to see what issues are top of mind and then they can focus on those topics throughout the year. 2. Targeted training: Another customer is asking, "How confident are you raising bribery concerns in your team," and then analyzing the data based on department and country. They've identified the top 10 teams they are focusing their ABAC training and communications on, because prioritization is key. You don't need to move from the traditional, completion-focused model to a data-driven program all at once. But take incremental steps to layer on data that surfaces risks and lets you prioritize your efforts. And your vendor should be your thought partner, not the obstacle, in this journey! I've seen Ethena's team work magic in terms of navigating concerns like PII and LMS limitations – it can be done!

*** 🚨 Discussion Piece 🚨 *** Is it Time to Move Beyond Kirkpatrick & Phillips for Measuring L&D Effectiveness? Did you know organisations spend billions on Learning & Development (L&D), yet only 10%-40% of that investment actually translates into lasting behavioral change? (Kirwan, 2024) As Brinkerhoff vividly puts it, "training today yields about an ounce of value for every pound of resources invested." 1️⃣ Limitations of Popular Models: Kirkpatrick's four-level evaluation and Phillips' ROI approach are widely used, but both neglect critical factors like learner motivation, workplace support, and learning transfer conditions. 2️⃣ Importance of Formative Evaluation: Evaluating the learning environment, individual motivations, and training design helps to significantly improve L&D outcomes, rather than simply measuring after-the-fact results. 3️⃣ A Comprehensive Evaluation Model: Kirwan proposes a holistic "learning effectiveness audit," which integrates inputs, workplace factors, and measurable outcomes, including Return on Expectations (ROE), for more practical insights. Why This Matters: Relying exclusively on traditional, outcome-focused evaluation methods may give a false sense of achievement, missing out on opportunities for meaningful improvement. Adopting a balanced, formative-summative approach could ensure that billions invested in L&D truly drive organisational success. Is your organisation still relying solely on Kirkpatrick or Phillips—or are you ready to evolve your L&D evaluation strategy?

Decoding the True Cost of Virtual Behavioral Training: A Strategic Cost Analysis A strategic cost analysis helps in making informed investment decisions and optimizing training effectiveness. Let’s analyze the true cost of a two-day virtual behavioral training for 60 mid-level managers, facilitated by two in-house trainers, with an annual salary of ₹30 LPA each. 1. Direct Costs: Explicit Expenditure a) Trainer Cost (Internal Facilitators) Since the trainers are full-time employees, we calculate their cost per day: • Annual salary per trainer = ₹30,00,000 • Annual working days = 250 • Daily cost per trainer = ₹30,00,000 ÷ 250 = ₹12,000 • Cost for two trainers over two days = ₹12,000 × 2 × 2 = ₹48,000 Trainer Cost: ₹48,000 b) Technology & Platform Costs Assuming the organization uses an internal virtual learning platform (e.g., Microsoft Teams, Zoom, or an LMS), the marginal cost per session is low. However, factoring in licensing, tech support, and bandwidth usage for 60 participants, we estimate: Technology Cost: ₹30,000 c) Learning Materials Digital workbooks, assessments, and post-training resources could cost around ₹750 per participant: Materials Cost: ₹750 × 60 = ₹45,000 d) Administrative and Support Costs Includes training coordination, pre-session readiness, IT support, and evaluation setup: Admin & Miscellaneous: ₹40,000 2. Opportunity Cost: The Hidden Economic Impact a) Participant Salary Cost Each participant earns ₹30 LPA, so their daily salary cost is: • Daily salary per participant = ₹30,00,000 ÷ 250 = ₹12,000 • Cost for 60 managers over two days = ₹12,000 × 60 × 2 = ₹14,40,000 Participant Salary Cost: ₹14,40,000 b) Productivity Loss (Opportunity Cost) While training enhances long-term performance, it results in a temporary dip in operational output. Assuming a 25% productivity loss multiplier (lower than in-person training since managers can still manage urgent tasks), the opportunity cost is: ₹14,40,000 × 25% = ₹3,60,000 3. Total Cost of Virtual Training Trainer Cost ₹48,000 Technology & Platform ₹ 30,000 Learning Materials ₹45,000 Admin & Miscellaneous ₹40,000 Participant Salary Cost ₹14,40,000 Productivity Loss ₹3,60,000 Total Training Cost ₹19,63,000 4. Strategic Insights: Ensuring ROI on Training Investment While a virtual format reduces logistics costs, the largest cost driver remains participant salaries and lost productivity. To optimize ROI: Ensure training relevance: Align content with business objectives to maximize post-training impact. Incorporate blended learning: Spread learning over multiple short sessions to reduce productivity loss. Implement pre- and post-training interventions: Reinforce learning through coaching, peer discussions, and real-world application. Ultimately, the real return on training isn’t just cost efficiency—it’s behavioral transformation that drives business results. Would love to hear how your organization measures training ROI. Let’s discuss in the comments!

Last week, I helped a sales VP at a $850M+ company build a business case for a $50K sales training investment. His team was trending toward a $15.2M miss. Here's the exact framework we used to get it approved: STEP 1️⃣ Lead with the math problem, not the solution Don't walk in saying "we need training." Walk in saying: "Our org restructure and new quotas created a math problem. 50% of reps are under 20% to target, pipeline multiplier is 2x when we need 3.5x. We're trending towards 43% attainment despite showing 130% YOY growth." Numbers don't lie. Executives respond to math. STEP 2️⃣ Show what you've already tried "Here's what I've implemented: structured prospecting, improved joint sales planning, individual coaching, and a hiring pipeline." This proves you're leading, not making excuses. STEP 3️⃣ Zoom out to the bigger picture "Looking regionally, we're at $41.5M vs $150M target (27.7% attainment). Even our best territory is under 35%, with most averaging just 25%." Now it's an organizational issue, not just your team's problem. STEP 4️⃣ Present three scenarios Do nothing: 43% attainment Base case: 70% attainment with systematic approach Best case: 85%+ attainment with full implementation STEP 5️⃣ Make it easy to say yes Option 1: Pilot with one team ($25K) Option 2: Full organization ($50K) The secret? You're not asking for training. You're solving a business problem. The result? His RVP said "This makes complete sense. Let's move forward and get enablement involved with planning. Most sales leaders fail because they lead with solutions instead of quantifying the pain first. Bottom line: A $15.2M miss costs infinitely more than a $50K investment in systematic improvement. When you frame it as de-risking the business rather than asking for development budget, the conversation completely changes. Ready to build your own bulletproof business case? Here's what successful VPs do: 1. Run the math on your current trends 2. Document actions you've already taken 3. Present the strategic choice between hope and systems 4. Build your coalition before the big presentation The companies that consistently hit their numbers don't rely on heroics. They invest in systematic excellence. — Sales Leaders, want to be a world class sales manager and get your team crushing quota? Go here: https://lnkd.in/ghh8VCaf

🔍 Research Snapshot: Why Learning & Development Isn’t Just Nice—It’s Essential Today, I’m digging into evidence that L&D does more than spark growth—it fuels performance, retention, and revenue. 📈 1. L&D drives revenue According to Deloitte, a 1% increase in per-employee L&D spend is associated with a 0.2% increase in business revenue—which translates to ~$4.70 return for every $1 invested. 🔗 Deloitte: The Business Return on Learning & Development https://lnkd.in/eVyqGRYm 🔄 2. It retains talent Companies with strong learning cultures experience 57% higher retention than those without. And 94% of employees say they’d stay longer at a company that invests in their learning. 🔗 LinkedIn Workplace Learning Report - https://lnkd.in/eppTiNG3 Learning access reduces intent to leave, especially among Gen Z and Millennials. 🔗 UK Government Rapid Review on L&D and Retention - https://lnkd.in/e_94_2vz ❤️ 3. Engagement fuels performance & loyalty 92% of employees say professional development positively impacts job engagement. 🔗 Devlin Peck: Employee Training Statistics - https://lnkd.in/ekCTQ_SZ Gallup finds that learning investment strengthens connection, purpose, and intent to stay. 🔗 Gallup: Building a Culture That Retains Employees - https://lnkd.in/eBaY7naH 🧠 What This Means for L&D Teams: Stop calling it a cost. Start calling it what it is: a growth strategy. If you’re advocating for a 1–2% increase in L&D spend, you now have credible ROI benchmarks to reference. Don't just build programs—build a learning culture. That’s what drives outcomes that last. 💬 Over to You: What’s one L&D investment your org made this year that paid off in real impact—on revenue, retention, or performance? Drop it in the comments. I may feature a few in next week’s post (with your permission, of course). #HiddenValue #LND #StrategicLearning #ValueCreation #LearningCulture #BusinessImpact #TalentDevelopment #FutureOfWork #TrustedLearningAdvisor

L&Ds, if you'd like more meaningful visibility in your organisations: Here's my #1 tip: Master measuring learning impact. 4 BIG reasons why understanding the #impact of your learning programmes is pivotal: ✅ Data-Driven Decisions: Effective metrics validate ROI, proving your worth in concrete terms. ✅ Strategic Influence: Quantifiable results will position you as a strategic advisor. ✅ Resource Allocation: Demonstrated success secures resources for your future initiatives. ✅ Continuous Improvement: Ongoing measurement helps you make iterative enhancements that are aligned with the business needs. All of these are hugely important to #L&D. 4 actionable steps: 1️⃣ Align learning solutions with commercial challenges from the very start to ensure relevance and measurability. Kevin Yates' 6 Impact Standards, which I touched on yesterday, are a very powerful framework. 2️⃣ Implement a robust model (the Kirkpatrick model is popular with many) to assess reaction, learning, behaviour and results holistically. 3️⃣ Combine quantitative tools (scorecards, tests) with qualitative methods (surveys, observations) for comprehensive insights. 4️⃣ Track KPIs resonating with business objectives. A case study snapshot: ➡️ A client L&D team transitioned from relying on 'happy sheets' to a comprehensive #measurement approach. Within 9 months, they went from being seen as 'order-takers' to recognised strategic partners, significantly enhancing stakeholder #alignment and #influence. Learning measurement is often an afterthought, but that leaves money (and more) on the table! Don't miss the strategic advantage of quantifying your #impact. What measurement strategies have elevated your L&D function? Share your challenges/victories/insights below! #LearningMeasurement #StrategicImpact #DataDrivenL&D #BusinessAlignment

❗ Only 12% of employees apply new skills learned in L&D programs to their jobs (HBR).  ❗ Are you confident that your Learning and Development initiatives are part of that 12%? And do you have the data to back it up?  ❗ L&D professionals who can track the business results of their programs report having a higher satisfaction with their services, more executive support and continued and increased resources for L&D investments.    Learning is always specific to each employee and requires personal context. Evaluating training effectiveness shows you how useful your current training offerings are and how you can improve them in the future. What’s more, effective training leads to higher employee performance and satisfaction, boosts team morale, and increases your return on investment (ROI). As a business, you’re investing valuable resources in your training programs, so it’s imperative that you regularly identify what’s working, what’s not, why, and how to keep improving. To identify the Right Employee Training Metrics for Your Training Program, here are a few important pointers: ✅ Consult with key stakeholders – before development, on the metrics they care about. Make sure to use your L&D expertise to inform your collaboration. ✅Avoid using L&D jargon when collaborating with stakeholders – Modify your language to suit the audience. ✅Determine the value of measuring the effectiveness of a training program. It takes effort to evaluate training effectiveness, and those that support key strategic outcomes should be the focus of your training metrics. ✅Avoid highlighting low-level metrics, such as enrollment and completion rates. 9 Examples of Commonly Used Training Metrics and L&D Metrics 📌 Completion Rates: The percentage of employees who successfully complete the training program. 📌Knowledge Retention: Measured through pre- and post-training assessments to evaluate how much information participants have retained. 📌Skill Improvement: Assessed through practical tests or simulations to determine how effectively the training has improved specific skills. 📌Behavioral Changes: Observing changes in employee behavior in the workplace that can be attributed to the training. 📌Employee Engagement: Employee feedback and surveys post-training to assess their engagement and satisfaction with the training. 📌Return on Investment (ROI): Calculating the financial return on investment from the training, considering costs vs. benefits. 📌Application of Skills: Evaluating how effectively employees are applying new skills or knowledge in their day-to-day work. 📌Training Cost per Employee: Calculating the total cost of training per participant. 📌Employee Turnover Rates: Assessing whether the training has an impact on employee retention and turnover rates. Let's discuss in comments which training metrics are you using and your experience of using it. #MeetaMeraki #Trainingeffectiveness

Today I've published an article on Market-Expected Return on Investment (MEROI) - a powerful framework that's transforming how I analyze companies in our increasingly intangible economy. I wrote this piece because I've grown frustrated with how traditional metrics fail us in a world where intangible investments dominate corporate spending. When companies like #Microsoft invest heavily in R&D, software, and brand building, traditional accounting treats these as expenses rather than the investments they truly are. This creates a 𝐟𝐮𝐧𝐝𝐚𝐦𝐞𝐧𝐭𝐚𝐥 𝐝𝐢𝐬𝐜𝐨𝐧𝐧𝐞𝐜𝐭 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐫𝐞𝐩𝐨𝐫𝐭𝐞𝐝 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥𝐬 𝐚𝐧𝐝 𝐞𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐫𝐞𝐚𝐥𝐢𝐭𝐲. MEROI solves this problem by revealing what return the market actually expects a company to generate on its investments. Unlike backward-looking metrics like ROIC, MEROI decodes the expectations embedded in current stock prices. 𝐓𝐡𝐞 𝐤𝐞𝐲 𝐭𝐚𝐤𝐞𝐚𝐰𝐚𝐲𝐬: - Traditional accounting significantly distorts our understanding of companies with high intangible investments, creating market inefficiencies savvy investors can exploit. - By properly reclassifying portions of SG&A as investments rather than expenses, we get a dramatically different picture of a company's steady-state value versus future growth opportunities. - My detailed case study shows how MEROI for a software company drops from 25% to 16% when properly accounting for intangibles - completely changing how we should view market expectations. I've included a comprehensive framework for implementing this approach in your own analysis, from industry selection to expectation analysis. 𝐖𝐡𝐚𝐭 𝐲𝐨𝐮'𝐥𝐥 𝐥𝐞𝐚𝐫𝐧: - How to distinguish between genuinely unprofitable businesses and those creating substantial value through intangible investments; - how to identify expectation mismatches that could signal investment opportunities; and - how to more accurately assess whether seemingly high valuations are actually justified. For anyone serious about understanding market expectations in today's economy, MEROI provides a systematic edge that traditional metrics simply can't match. #valuation

📈 Unlocking the True Impact of L&D: Beyond Engagement Metrics 🚀 I am honored to once again be asked by the LinkedIn Talent Blog to weigh in on this important question. To truly measure the impact of learning and development (L&D), we need to go beyond traditional engagement metrics and look at tangible business outcomes. 🌟 Internal Mobility: Track how many employees advance to new roles or get promoted after participating in L&D programs. This shows that our initiatives are effectively preparing talent for future leadership. 📚 Upskilling in Action: Evaluate performance reviews, project outcomes, and the speed at which employees integrate their new knowledge into their work. Practical application is a strong indicator of training’s effectiveness. 🔄 Retention Rates: Compare retention between employees who engage in L&D and those who don’t. A higher retention rate among L&D participants suggests our programs are enhancing job satisfaction and loyalty. 💼 Business Performance: Link L&D to specific business performance indicators like sales growth, customer satisfaction, and innovation rates. Demonstrating a connection between employee development and these outcomes shows the direct value L&D brings to the organization. By focusing on these metrics, we can provide a comprehensive view of how L&D drives business success beyond just engagement. 🌟 🔗 Link to the blog along with insights from other incredible L&D thought leaders (list of thought leaders below): https://lnkd.in/efne_USa What other innovative ways have you found effective in measuring the impact of L&D in your organization? Share your thoughts below! 👇 Laura Hilgers Naphtali Bryant, M.A. Lori Niles-Hofmann Terri Horton, EdD, MBA, MA, SHRM-CP, PHR Christopher Lind