Most organizations in North America are struggling to measure the return on investment (ROI) of employee training programs, according to a Nov. 7 report from D2L, a global learning technology company.
In a survey of hundreds of high-level leaders across a range of industries, 46% indicated that demonstrating ROI from employee training is a challenge.
“The results of this survey are revealing in that they show how difficult organizations find it to quantify the benefits of employee training,” Sasha Thackaberry, senior vice president of Wave at D2L, said in a statement. “The key to helping make this easier is to establish clear metrics and delineate closely the skills needed for success.”
In the survey, only 33% of those polled said their organizations explicitly measure the impact of employee training on financial outcomes. In addition, 75% said they’re seeking better metrics as part of future employee training strategies.
In general, survey respondents said they struggle to consistently measure the benefits of employee training programs, as well as the resulting productivity gains. Industry representatives also had little agreement on a clear definition of ROI for employee training.
The survey also aimed to uncover the primary motivations of providing employee training and the challenges that companies face with both delivery and measurement of training efficacy. About 54% said that keeping learners engaged during training was a challenge, and 41% said they felt that sustaining the impact of training was a challenge. About 41% also said they were concerned about ensuring that training content was relevant.
Notably, the ROI-measurement gap appears to be prevalent across organizations, including those with new corporate learning programs and those with mature programs, which suggests a systemic issue, according to the survey.
“Measuring the direct impacts of employee training — on productivity and skills development — is easier if the training is properly aligned with specific desired learning outcomes,” Thackaberry said. “Organizations need the right solution suite including technology, educational programs and content, and support services … in place.”
Leadership development programs provide an average ROI of $7 for every $1 spent, according to a recent report, which can vary by industry and who receives the training. Overall, the ROI stems from increased revenue and sales that result from leadership development participation, as well as cost savings through higher employee retention and lower recruitment costs.
Despite disruptions during the pandemic, employers mostly maintained or increased investment in skills training and development, according to a study from the U.S. Chamber of Commerce and the Society for Human Resource Management. HR professionals indicated that both private and public partners could collaborate to support talent development, including skills-based programs.