There’s more to elearning programs than just giving employees unlimited access to a library of courses. To see the best results, leaders need to create a detailed plan for how elearning will be used throughout the organization.
Any elearning initiative should start by asking:
- What are we trying to shift in the business?
- Is a training strategy going to help move the business forward?
- Should we adjust operations to streamline day-to-day activities?
Answers to these questions can help determine where elearning can have the biggest impact on the workforce. For example, if a team is struggling to get the most out of a new application, elearning can rebuild morale, increase productivity, and get everyone up to speed in a short amount of time. Identifying these needs forms the foundation for a successful elearning program.
With the identified needs in mind, work with key stakeholders throughout the business to determine goals for the elearning program.
Goals will vary greatly depending on the business. Is the goal to reduce software-related IT tickets? Cut employee onboarding time in half? Streamline professional development and training processes?
These goals should be as specific as possible, documenting concrete numbers for improvements to create a benchmark for measurement.
Once leaders determine goals, they can align metrics to benchmark success and create a clear understanding of the data that needs to be collected.
There’s an endless number of metrics that could prove useful, but the four levels of learning evaluation can help bridge the gap between different stakeholders to decide which are best:
- Reaction to Learning: Training managers evaluate whether course participants actually enjoy lessons.
- Knowledge: Supervisors evaluate the specific skills, attitudes, and/or knowledge that was acquired through elearning.
- Behavior Change: Managers evaluate how participants apply newly acquired skills and knowledge.
- Learning Results and Impact: Executives take the high-level view and evaluate how newly-implemented elearning systems have improved business results.
The first step to actually calculating elearning ROI is to analyze the costs. This includes three aspects of any elearning investment:
- Personnel Costs: The costs of internal employees/external contractor wages associated with elearning programs. This includes anything related to project direction, development, management, and administration.
- Platform Costs: In the case of a subscription model, this is the monthly or annual expense paid to an elearning provider.
- Hidden Costs: These costs cover the process of implementing a new elearning program. They include the transition to a new system, personnel disruption, resource reallocation, team alignment, etc.
Early in the process, L&D leaders consider the benefits of elearning from the perspective of employees. Now, it’s time to consider how those benefits translate to real business results that will make stakeholders buy into the program.
Benefits depend on the context of each unique business, but these example benefits can get L&D leaders thinking about the elearning business case.
- Reduce Training Costs: Moving lessons online reduces inefficiencies and expenses related to traditional training processes. Because the business doesn’t have to spend money to actually develop the courses, stakeholders can see immediate ROI.
- Strengthen Employee Retention: Lack of development opportunities is a top reason for employee turnover. Providing continuous access to elearning opportunities can increase employee retention. This also improves the onboarding process. Sub-par onboarding sets the wrong tone for employment and is a contributing factor to first-year turnover.
- Boost Workforce Productivity: Business needs change rapidly and it’s much easier to train existing employees than constantly find and onboard new specialists. Ongoing training opportunities can increase hard and soft skills throughout the workforce, increase productivity and improving the company’s bottom line.
- Improve Employee Engagement: Actively disengaged employees cost an organization about $3,400 for every $10,000 of salary. Employees become disengaged when they hit plateaus in their positions. Elearning provides on-demand access to professional development, keeping the workforce engaged and enabling employees to prepare for more responsibility.
- Increase Success of Training: One-size-fits-all, in-person training can fall short with employees who don’t learn best in the classroom setting. Supplementing with elearning gives individuals an opportunity to go at their own pace. The result is higher training success rate, which reduces the need for retraining and saves the company money.
All of these benefits result in positive financial results for the business. But these are just a few of many possible benefits. To actually calculate elearning ROI, use this equation:
When a program is implemented correctly, companies can experience significant elearning ROI on a consistent basis—not just at initial implementation.
To achieve true elearning ROI, L&D teams should take strides to measure success, obtain feedback, and make continuous improvements to the program. There are three ways to do this:
- Conduct Surveys: Before and after the elearning program, give key stakeholders surveys to gauge the effectiveness of old initiatives vs. elearning, new opportunities for elearning initiatives, use of available resources for professional development, etc.
- Test a Focus Group: Analyze the impact of elearning by researching the effects on a specific set of employees. Test their skills before and after a certain course to determine where the program could improve.
- Take Advantage of Assessments: Depending on the elearning solution, L&D leaders can take advantage of built-in assessments to verify that time spent training was worthwhile.
Anil K. GuptaMichael Dingman Chair in Strategy, Globalization, & Entrepreneurship, Smith B-School, Univ of Maryland
Haiyan WangManaging Partner at China India Institute; Co-author of Getting China and India Right, The Quest for Global Dominance
John ManciniChief Evangelist at AIIM International
Peter HighPresident of Metis Strategy