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Measuring the Business Impact of L&D: Connect Learning Data to KPIs

Published Tue Jan 12 2021

Measuring the Business Impact of L&D: Connect Learning Data to KPIs

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This is part three of a four-part series about how L&D teams can effectively evaluate, measure, and demonstrate the business impact of their learning and development programs.

In part one of this series, we began by honoring the reality of the pandemic’s impact on L&D and the need for organizations to “reset.” Part two introduced the importance of collaborating with departments outside of HR and L&D to align learning and talent functions with the overall business strategy.

That brings us to part three. Once you align learning and talent with your organization’s key business strategies, you can start focusing on metrics. By leveling up the learning data you currently track, you can establish a link between your learning metrics and the KPIs associated with your organization’s business objectives.

What Do L&D Teams Typically Measure?

Many of us are in the same situation. We rely solely on our LMSs to deliver reporting and analytics, which means we may be under-reporting. Six measures are used most frequently:

  • Hours of training delivered

  • Completion rates

  • Compliance rates

  • Training scores

  • Satisfaction ratings (smile sheets)

  • Cost of training

But these measures don’t help L&D and HR teams really level up. If you recall the Kirkpatrick model, most of the six measures above align with levels one, two, or three, as shown below.

Measuring the Business Impact of L&D: Connect Learning Data to KPIs -5 Steps Graphic.png

The Table Stakes of Learning Metrics

Traditional training data is straightforward, but the learners’ experiences, the program, and the learners’ needs must also be considered.

Let’s start with the table stakes. Usually, this is the learning or training data that can be organized around many different contexts. Overall, it is to ensure you’re tracking three components:

  • Learner-Based Metrics or Learner Activities: Completions, time spent, exam scores, number of attempts

  • Learning Experience: Satisfaction, technology, delivery formats

  • Learning Program: Content applicability, drop-off rate, exam success rates

But there’s still so much more to explore. To get to the next level, you need to also consider the measurement of benefit and business impact.

Benefit Measurements

Hard benefits are those that can be attributed solely to the training program and assigned a specific financial value. Soft benefits are those that cannot be solely attributed to the training program and cannot be assigned a specific financial value.

Hard: A specific benefit like achieving a targeted goal (for example, a total reduction in costs of a new program compared to a prior version)

Soft: Anecdotal, where training contributes alongside other programs or tactics like increased productivity, reduced absences, or greater customer satisfaction

Business Impact Metrics

Business impact metrics connect to business strategy and KPIs. It is the opportunity to connect all the dots—to understand the skills and competency focus of training and to identify the link between those and the key strategies and KPIs so you can ultimately determine the net impact your training has on the business.

Training and learning data metrics you may want to correlate with your KPIs include:

  • Revenue per employee

  • Profitability

  • Revenue growth

  • Customer satisfaction

  • Voluntary turnover or retention

  • Employee engagement

  • Business process improvement

  • Individual performance

  • Team effectiveness

  • Ability to respond to the market

We need data to help us shift from reactive, to proactive and strategic, when we think about our training programs. Instead of fighting fires all the time, we can be more future-focused when we look at the competencies, skills, and other core elements of learning design to ensure we can identify all the levers available to pull.

This also allows us to move to a more predictive analytics stage where the data will help us understand and predict where to place our emphasis. If we know that turnover is a problem, and we can identify some of the drivers behind our current turnover (such as poor leadership effectiveness or communication skills), then we can roll out learning and development programs geared to support the individual underlying competencies.

This strengthens the performance throughout the organization more effectively and sustainably compared to building a course solely focused on addressing turnover.

Stay tuned for the final post of this series in which we’ll focus on turning insights into action and uncover the essential metrics every L&D team should track.

Editor’s Note: This is adapted from the Schoox corporate training blog).

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