The business and technology training and development market is booming. Companies are increasingly providing a diverse range of learning resources, such as in-person conferences, live online courses and self-directed access to problem-solving, as they recognize the importance of supporting their employees through accessible, topical training and development. In fact, estimates indicate that training expenditures reached more than $93 billion in 2017, which marks roughly a $23 billion increase from the previous year.
Differentiating Human vs. Financial Benefits
Given the substantial costs of training and development initiatives, companies understandably need to justify their spending by demonstrating their return on investment. Many rely on the Kirkpatrick Model, which offers four levels of evaluation:
- Level 1: Reaction – The degree to which employees find the training favorable, engaging and relevant to their jobs.
- Level 2: Learning – The degree to which employees acquire the intended knowledge, skills, attitude, confidence and commitment based on their training participation.
- Level 3: Behavior – The degree to which employees apply what they learned during training when they return to their work.
- Level 4: Results – The degree to which targeted outcomes occur as a result of the training.
Evaluating the effect of training and development initiatives at each of these levels can help companies establish productive, relevant learning programs that provide demonstrable employee benefits. However, using the Kirkpatrick Model to calculate not just the human benefit, but also the financial impact – the ROI – can prove difficult. Furthermore, always assessing training and development results via Level 4 simply isn’t feasible as companies grow and expand their learning programs.
Prioritizing Correlation, Not Causation
To realistically determine the ROI of training and development programs, companies need to stop focusing solely on causation metrics and start focusing more on correlation. For instance, rather than attempting to prove that a specific learning initiative leads to financially measurable outcomes, companies should track their employees’ engagement with online and/or in-person learning programs to determine how frequently they participate. That data can then be leveraged by correlating with metrics that are monitored anyway, such as performance and potential. By correlating engagement or assessment metrics with performance, potential and other established metrics that contribute to success, a system can be built that connects learning activity to a company’s goals.
More specifically, by measuring correlation rather than causation, companies can gain the ability to determine that their highest performers are also the most engaged learners, for example. That correlation provides clear business value. If measurements indicate that lower performers aren’t engaged, companies can track improvement as employees increasingly use the learning resources. A case can then be made that these employees are being successfully taught new skills. Additionally, by being able to demonstrate that new employees who interact with learning programs reach proficiency faster than those who engage less often, the value of training and development programs can be objectively applied to employee onboarding.
Best Practices for Measuring Value
Still, shifting the way in which training and development initiatives are valued can be overwhelming. To help navigate this change of prioritizing correlation over causation, consider the following four best practices:
- Establish key metrics.
Determine which business and HR metrics are most important, then correlate employees’ learning engagement and behavior with those specific metrics.
- Be wary of standard assessments.
While standard assessments like Level 1 (i.e. the feedback forms provided after learning events) can be useful, they’re limited. Level 2 assessments in the form of testing can also be helpful in making sure there aren’t any major deviations from training and development programs. But be wary of interpreting these results too literally. The reality is, tests like these can confirm that the learner can recall what was just taught, however they can’t demonstrate long-term behavior changes or business impact.
- Communicate with stakeholders.
The success of any training and development program depends on executive and project leader buy-in. To cultivate support, talk with your stakeholders about their own experiences in learning a new skill or function. Ask them about what milestones were most helpful to them and how they were measured. Most importantly, communicate with them about what data you will regularly share and how any observational assessments may require feedback from management to make sure they are aligned and prepared to support your efforts publicly.
- Streamline evaluations.
If your company provides tens or hundreds of learning experiences annually, it’s impossible to efficiently collect observational survey data for each of those experiences. Instead, streamline your efforts by picking a few learning experiences that offer the most business impact and are reasonably easy to observe.
A Timely Opportunity
Above all, companies and their leadership teams need to recognize that today’s highly competitive business landscape and the ongoing war for talent demands quality training and development programs. Millennials, who already represent the largest generation in the U.S. labor force, consistently prioritize development opportunities when looking for jobs. What’s more, 93 percent of millennials left their company the last time they changed roles, with many likely leaving due to a lack of opportunity for growth.
Invest in training and development initiatives before it’s too late. Evaluate both the human and financial benefits of such programs by looking not just for causation but also any relevant correlations with established business metrics. In doing so, employee retention, engagement and promotion levels stand to drastically and consistently improve, which in turn can lead to greater productivity and stronger bottom lines.
Karen Hebert-Maccaro is the chief content officer for O’Reilly Media. Comment below or email editor@CLOmedia.com.