We Need Better KPIs for Learning and Development – Here’s Why

We Need Better KPIs for Learning and Development – Here’s Why

In today’s competitive and technology driven world, retaining and developing the skills of your workforce has never been more vital. Learning and Development plays a central role in this.

Whether its induction programmes, individual upskilling or team training, without effective L&D business is bound to suffer.

Yet assessing L&D performance can be challenging. In fact, most businesses know nothing more about the success of their L&D than ‘amount spent’.

That’s despite the fact that a majority of CEOs think it’s important to measure both the business impact of learning (96%) and the return on investment of learning and training initiatives (74%). Only a tiny minority of organisations (8% and 4% respectively) actually measured these metrics.

Why Measuring The Value of L&D Matters?

Historically, L&D KPIs have been cost focused, with metrics such as training budget, spend per employee and time spent training. Of course, investment is a strong starting point, but ineffective L&D could easily be going unnoticed.

Measuring value is more difficult, but it’s essential for ensuring sustained investment. Effective KPIs that track more than just spend also allow L&D managers to optimise for better results, something that benefits the entire optimisation.

Learning and development, sadly, can be one of the first areas of cost-cutting when business hits tough times. After all, business leaders want to see the return on their investment, and will tire of investing where that return is unclear.

Thankfully, new thinking on L&D value, combined with better technology to track analytics, is helping to solve the problem. But it’s down to all of us to implement it.

helping to solve the problem. But it’s down to all of us to implement it.

Methods of Measuring: The Kirkpatrick Model

So how do companies actually go about measuring the impact of L&D?

In the 1950s, renowned training and development expert Donald Kirkpatrick created a four-level model that firms could use to evaluate the impact of training on performance.

Not a great deal has changed since then, or at least not fundamentally. The model cited four ‘levels’ that the organisation should be measuring, as follows:

Level 1:
-How satisfied are employees with the training?
-Did they believe the course to be valuable in their development?

Level 2:
-Have employees acquired new skills or abilities as a result of the training?
-Have they improved their skills from their level before the training?

Level 3:
– How effectively are employees able to apply the training to their day to day job?
– Is the team working more effectively as a result?

Level 4:
– Has the training improved critical business metrics such as productivity or revenue?

Levels 1 and 2 can generally be assessed using feedback forms and surveys – techniques many companies do employ.

Levels 3 and 4 require longer-term evaluation and the collection of data from multiple sources. So no wonder businesses struggle with these, yet only by collecting data across all levels can a comprehensive picture be built of the impact and efficiency of L&D.

For example…

Level 1 & 2

KPI: Measure how employees rated a course on customer service

Level 3 & 4

KPI: Evaluate customer satisfaction metrics to assess whether the employee is applying the training

More Metrics That Track Back to L&D Investment

All of the following KPIs could, with effective tracking and analysis, be linked back to L&D activity in order to provide a clearer picture of value:

  • Employee attrition / engagement / productivity rates
  • Customer satisfaction / retention
  • Time to deliver products / resolve enquiries
  • Client account growth
  • Product market share

And ultimately:

  • Revenue growth
  • Cost reduction

Top Tips to Measure L&D Metrics Effectively

And finally, here are some practical tips you can use to better assess L&D’s impact on the business:

  1. Define the business strategy and how L&D is helping the business achieve these aims – in other words how strategy and learning align. This should be a collaborative effort involving not only heads of L&D but the senior leadership team and other managers
  2. Agree specific business metrics / KPIs that L&D can be measured on, along with targets – and track progress
  3. Consider investing in technologies such as new generation learning management systems (LMS) platforms that incorporate learning analytics software – these can make it easier to track and analyse key metrics and provide actionable insights for both L&D strategy and that of the wider business strategy.
  4. Involve employees – surveys and qualitative analysis can be an essential part of measuring L&D impact. For instance, if a sales team is performing 20% better than last year – although it’s difficult to isolate the precise reason for the improvement, asking each member should give you a better idea of causation. This data can be collected more efficiently using technology such as online surveys and feedback.

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