Learning and Development is a valuable tool that can create real, positive change in both employee and organisational performance. However, is the Learning and Development your organisation is investing in actually showing measurable benefits that live up to the hype? How can you make sure that you know what needs tweaking, what needs re-vamping and what needs throwing out altogether? In an ever-changing world, training plans and resources should never remain static, so what metrics should you be tracking in order to test that your offerings are improving the quality and quantity of your employees’ output?
1. If all you’re asking is who took the course and how much participants enjoyed the training, then you aren’t doing it right. If all it took to increase retention, improve engagement, and boost productivity was to make sure everyone that needed to ticked the right box, felt it was relevant and enjoyed doing so, L&D would appear much higher on every manager’s wish-list. While it is important to track these metrics, they are only Level 1 on the Kirkpatrick Four Level Model of Evaluation, meaning you are only scratching the surface.
2. Course assessments that ask for more. All training should come with assessments built in which can show the trainer, and thus the L&D department, if the learner has understood what has been taught, and has been able to apply it in a simulated environment. If the training has been effective, the trainee should be able to display certain skills and apply certain knowledge in the classroom – if they can’t then there is no point measuring the trainee any further, the training has failed.
3. Staff retention, particularly with new hires. If your induction program is up and running, and yet you keep seeing new employee drop-off within the first three months, particularly with frontline positions that traditionally have high turnover, then your induction training needs to be revamped. Staff retention is a good way to measure how confident these staff feel doing their job.
4. Improvements in already measured metrics. Make sure that if you have a range of scorecards in use, that you decide which metrics require improvement, and build training to improve those metrics, don’t do it the other way around. If your target is to see improvement in sales numbers via the metrics of units sold, the mix of products sold and revenue generated, then implement sales programs focused on cold-calling, cross-selling or relationship selling, and track changes in these metrics (however, with sales, it is necessary to track changes on a background of factors which can effect sales numbers such as time of year, market demand, economic landscape, etc.). If the metrics around customer satisfaction and poor call volume are problematic, implement training that focuses on providing better customer service or on processes and techniques for improving call volume, then review the metrics. Pre-existing metrics have the benefit of already being a part of the staff management process, which means that policies and procedures are already in place for measuring success, and managing under-performance, in these areas.
4b. What if there are no metrics? You should really start introducing metrics to your business, however there is a method called Authentic Assessment where an employee can be asked to create an end product, demonstrate an ability or complete a case study to prove they have improved their performance in that area. The method of rating an Authentic Assessment rigorously and consistently is laborious, but will provide the business with an answer as to whether training has improved staff performance.
5. What about the bottom line? ROI and revenue generation are solid methods of testing if your training is effective, and have the benefit of being metrics that executive leadership can understand as a means of value adding to the business. However, these calculations are often not undertaken due to the level of complexity of arriving at a valuable and viable number. To achieve this level of reporting, a plan needs to be in place from day one to evaluate how to quantify both the Return and Investment portions of the equation.
One system of quantifying ROI is through 180 degree and 360 degree evaluations; the employee is rated once before and again some agreed time after the training has taken place, and the value of the added proficiency in skills relating to their job (whether through ability to complete jobs at a higher wage bracket, or in ability to complete tasks which would otherwise require new headcount), provides you with a return on the investment of the course.
A second, more complex method, is to first give a monetary value to reaching stated training goals: if it is increased sales, reduced customer ‘churn’ rates (that is customers who drop service or don’t repurchase), reduced cost of sales or of customer service provision, improved customer satisfaction survey scores, improvements in efficiency and engagement metrics, and so on, then a sum needs to be outlined to express the achievement of each goal that reflects the value added to the business. There should also be discussion on the cost of not meeting stated business objectives, meeting the objective by other means, and the costs retained by reducing expensive mistakes or problems.
Furthermore, when looking at the Investment portion of the equation, it is not enough to look at metrics such as total training cost, cost per participant, and so forth. A distinction should be made between those who have taken effective training that has improved their performance, and those who have completed ineffective training which has shown little to no discernible difference in their metrics. This can show that certain training, which seems to have a lower up front cost, is actually costing the business more as it is not leading to high rates of learner retention and application, and thus is not achieving the business strategy’s stated goals. There are numerous specialist organisations, and bespoke systems of coming to an answer on how to calculate ROI, but it should be calculated to gauge the true effectiveness of the training you have implemented, and to build an accurate business case around the provision of Learning and Development resources.
It is not enough to train for training’s sake. All Learning and Development should be structured to meet the business’ stated goals and any new business strategy that is being implemented. If training is targeted, has specific requirements, and can be measured to ascertain whether it meets the needs of the employees and the business as a whole, then it will be much easier to obtain buy-in not only from key stakeholders, but from the employees themselves. Trainees are far more likely to be engaged and retain and utilise new information and skills if they understand exactly how they can apply this training to increase their confidence and make their jobs more straightforward, allowing them to improve metrics which may lead to faster bonus attainment and to make themselves more attractive as promotion prospects.
Do you have metrics to track the effectiveness of your Learning and Development offerings? Which metrics do you favour? What advice would you give to an organisation looking to improve their use of metrics in this area?