Learning Technology ROI – Making the Expense an Investment
Written by Christine Klatt
I recently read yet another article, Corporate Learning Network (CLN) Market Study 2023 State of Learning Technology, (Sokolowski, 2023) [I] about the current state of learning technology. “According to recent CLN research, the biggest weaknesses in learning courses/programs are that they don’t help determine return on investment (ROI) and goals of the organization, prepare employees for their day-to-day jobs or future-proof organizations against disruptions.” Most importantly from an investment perspective, this article identified, once again, the lack of tangible data and analytics linking learning technology to a return on investment linked to business goals and productivity. My frustration rose.
My frustration is with the fallacy of spending thousands of dollars on learning year after year without first providing a foundation of self-awareness to the learner and expecting it to change an organization beyond providing a “learning culture.” Dollars spent on learning could improve the bottom line in numerous ways if the approach to talent development and management was systematic (Selection to Succession) beginning with a scientifically validated assessment but let us just focus on learning for now.
In this most recent article, the key findings showed that the talent professional survey respondents are looking for more data that correlates dollars spent on learning to employees’ daily operational activities, as well as return on investment, because “they” are struggling to see it.
Talent development professionals – you are right! You are struggling to see the correlation for a reason!
Unless you are willing to first provide employees with a level of self-awareness from which to grow and develop people accurately, talent development initiatives will continue to be an expense rather than an investment with an expected positive return. You will not see an accurate correlation to daily operational activities nor be able to accurately measure ROI. Also, if the strong learning culture you have developed is based on spending on learning technology alone, it is probable that the return will only affect one small area of the many talent challenges with which you are faced, and it is unlikely that it will improve the bottom line. How could it? Without specifically targeting the accurate learning and development needs of employees, you cannot expect a positive return.
Enhancing learning technology by customizing it for an organization or integrating it with other systems to provide more data, will not provide better results. These approaches are still missing the vital foundation of effective learning, development, and successful performance – self-awareness. Accurately assessing the talent of an organization provides systemic data and solutions for both talent development and management. Learners have a foundation from which to grow and develop and organizations have an accurate and comprehensive picture of their talent from the time of selection, through development, and on to succession. The foundational data from a scientifically validated assessment provides the ability to assess the true talent of the organization and subsequently tie it to the bottom line for years to come. When you start with a scientifically validated assessment that shows your true talent, mapping data becomes possible and measuring investments in talent and learning becomes clear.
I read article after article, year after year, about the same challenges that talent development and management professionals face: A strategy to recruit, retain, skill and re-skill talent. Organizations spend thousands of dollars on learning – but is it affecting the bottom line in a positive way? Is the spending helping with retention? Is it helping with culture? Is it showing a positive rate of return? If it helps with retention and culture but not profit, how long will the organization continue to justify the expense? Beyond three years?
The current trends are not good:
- 85% of employees are not engaged (Gallup) [ii]
- Only 35% of U.S. Managers Are Engaged in Their Jobs (Gallup) [iii]
- 37.9% of new hires resign within a year. (Work Institute) [iv]
- In 2022, the overall cost of voluntary employee turnover amounted to over $1 trillion (Zippia) [v]
- About Leadership Performance:
Based on the statistical trends revealing the talent challenges, the same issues remain, spending on learning is increasing, but profits are not improving.
That tells me that talent development professionals are fighting for what they can, and doing all they know to make a change, but what they know, and use is not working. What talent development professional wants a new way of investing in their talent after years of fighting for budgets and defending existing spending? We get it.
What we do not get is not adding a service that fortifies all the spending you have been fighting for so that you can make enterprise-wide change! Start here! Learning technology in its various forms can affect the bottom line in a positive way and correlate to daily operations and career success. You simply need to spend the dollars on the self-awareness of your talent, first. The solution: Align development with each individual’s true talent.
[ii] https://www.gallup.com/workplace/349484/state-of-the-global-workplace-2022-report.aspx
[iii] https://www.gallup.com/services/182138/state-american-manager.aspx
[vii] https://www.gallup.com/services/182138/state-american-manager.aspx