It’s a challenge the learning and development community has been struggling with for years: how can we prove a tangible ROI on corporate training programs? Budgets have increased and studies have shown that the importance of training programs are being recognized by executive level management more and more each year. However, while learning analytics and reporting on ROI have come a long way, recent research shows that there is still a lot of work to do in nailing down corporate training ROI.
A LinkedIn workplace study in 2018 reported that 35% of talent developers expected a budget increase, while only 11% expected a decrease. On the other side of the coin, 90% of executive level management believe that L&D is a necessary benefit to the company.
It all sounds pretty positive - increasing budgets, buy-in from c-suite management - until you start to look at the stats around how training departments are reporting on the impact of corporate training. While 32% of executives thought demonstrating ROI was one of the top challenges for talent development, only 22% of learning professionals felt this was a challenge for their team.
This disconnect has its roots in how training departments have been reporting results for employee training. Measurements such as employee engagement and completion rates do not speak enough to the bottom line impact on the business. While executives may believe in the importance of training and development to the organization, it’s the learning professionals who truly understand the time and budget it takes to create that level of effectiveness in training.
55% of executives say that tying training programs to business results would earn L&D a seat at the table, which is an opportunity to represent the interests of the department, win budget increases and improve the quality of training programs. It’s time to start aligning training results with corporate objectives to prove that bottom line impact and raise the stakes of your corporate training program.
1. Get a thorough understanding of the corporate objectives
Take a top-down approach to aligning your training with corporate objectives. Ensure you have a full understanding of what the company wants to achieve and the tactics being taken in order to achieve these goals.
Ensure that you understand the tactics being taken in each department to achieve corporate objectives. They will be fundamental to establishing the metrics you use to calculate the ROI of training costs. Ensure that L&D are kept in the loop on strategy conversations wherever possible. As an internal service department, it’s imperative that the training department understand all the moving parts of the organization and where they fit into it.
2. Establish the skills and competencies those objectives will require
Once you have a full grasp of the organization’s overall goals and objectives, start working on the skills and knowledge that will be required to achieve them.
Work with management from other departments to establish skill matrices and knowledge indices. What will employees at different levels across the organization need to be able to do in order to achieve corporate objectives?
Working closely with other management at this stage of the process will also help drive employee engagement down the line once training is ready to be deployed.
3. Perform an extensive skills gap analysis
Once the required knowledge and skills have been established, it’s important to dive deep into a skills gap analysis. You cannot build an effective training program without a full understanding of what skills and knowledge gaps exist first.
For example, Solenis established a very effective method for performing a knowledge gap analysis on highly technical subject matter for their sales team. Having a highly knowledgeable sales force was an important differentiator for the company, so in this way L&D were clearly and effectively contributing to the achievement of corporate objectives.
Learning professionals are increasingly recognizing that closing skills gaps is one of the most effective and efficient ways to prove ROI on training programs, so get ahead of the curve and start prioritizing a skills gap analysis as part of the learning strategy.
4. Build your training program around addressing those gaps
Now that corporate objectives and the knowledge gaps have been established, training programs can be developed around aligning the two to improve employee skills and knowledge.
At this stage it’s important to build metrics which can measure the training efforts against the achievement of corporate objectives, keeping the two aligned as closely as possible.
As discussed above, completion rates and employee engagement are not telling executives enough of a story in terms of how training programs are contributing to the bottom line. Work with department heads and learn more about their metrics to see how you can tie the training programs into the success of different teams, and therefore, into the success of the organization as a whole.
The clear strategy and execution on corporate objectives by the learning department at Solenis shows that if you align to corporate objectives from the start, the results will speak for themselves in terms of L&D’s role in achieving them.
5. Get buy-in and support from management
After spending the time and resources to align with corporate objectives, understand knowledge gaps, and build out training programs, it’s equally important to ensure that training is correctly adopted and completed.
Getting buy-in and support from management to support employee learning is vital to the success of any training program. And just as you must prove bottom-line ROI to executives, showing management how training can help them achieve their departmental goals will go a long way towards getting their support in rolling out new training solutions.
Thankfully, getting buy-in and budget from executive management has never been easier for training and development. There has been a dramatic shift in budget allocated to training over the last three years. With that shift, learning professionals are understanding the need to prove ROI on this increased investment if learning is to be kept high on the agenda for the foreseeable future.