Calculating ROI on L&D

by Brett Henebery06 Mar 2017
LinkedIn’s 2017 Workplace Learning Report found that while 69% of organisations see talent as their top priority, only 8% of CEO’s see impact from L&D programs.

One implication of this is that it makes building the case for managerial buy-in for L&D programs difficult. But that doesn’t mean L&D can’t deliver results.

Lorraine Salloum, director of organisational development and learning at the NSW Department of Family and Community Services explained how L&D professionals can measure their programs’ return on investment, and in turn, achieve buy-in.

Salloum recently spoke at the Learning & Development Masterclass held in Sydney on 30 November about how to calculate ROI on L&D. She says this process is the use of “a chain of measurements to demonstrate impact”.

“It includes metrics relating to participant engagement, learning – testing new knowledge, application and implementation – demonstrating changes in behaviour, and business impact measures,” she told L&D Professional.

“ROI uses measurements from all these areas to determine the net benefit of programs over the monetary cost of running the program.”

Salloum pointed out that leaders expect L&D to demonstrate their contribution to the bottom-line and clearly show monetary connection between training investments and its impact on their employees’ improvement and development.

“Leaders care about the application of new skills on the job, improvement towards business outcomes and return on learning investment,” she said.

Salloum said that in order to get buy-in, it is important to provide business intelligence in a format that aligns to the decisions executives need to make.

“L&D needs to provide data and insights to help executives make strategic talent decisions and use data to optimise workforce learning investments against the most-critical skills and competencies,” she said.

She added that L&D needs to “transform from an order taker to strategic business partner critical to the organisation”.

“To do that means L&D professionals need to strive for continuous improvement data driven insights,” she said.

The next Learning & Development Masterclass will be held in Melbourne on 6 April. Find out more and register here.

Related stories:
Why demonstrating value is a must
Organisations not seeing L&D impact