Smart companies are always seeking ways to improve their processes and develop in-house talent. That’s one reason e-learning has become popular in corporate settings. By implementing online learning initiatives, businesses can lower costs, increase accessibility, raise productivity and inspire loyalty in their most valued team members.
In any corporate setting, of course, it’s essential to be able to quantify such benefits. Businesses need to track internal programs to understand what works and what needs further refinement. With that in mind, let’s discuss why measuring your return on investment (ROI) from e-learning is important and the best methods for accomplishing this task.
The Importance of Calculating E-Learning ROI
Informed ROI calculations are critical to the operation of any enterprise, as they allow organizations to evaluate performance and determine the profitability of an expenditure or initiative. Businesses can also segment ROI calculations to determine how individual parts of an operation are performing. These assessments help business leaders draw an accurate picture of the overall health of an enterprise and the viability of its constituent parts.
In the context of e-learning, ROI calculations are often critical in establishing the value of online training. Because the advantages offered by e-learning are not always made manifest through a set of easily digestible numbers, it’s important to have a system in place to measure its impact.
Bear in mind that there is more to ROI assessments than simple expenses. There are also the costs that are incurred when employees aren’t trained properly. Golden opportunities may be missed because personnel are simply not ready to assume the needed responsibilities.
By successfully measuring and tracking e-learning ROI, organizations can identify specific aspects of the initiative that may need more refinement, while justifying the use of e-learning to the enterprise.
How to Measure E-Learning ROI
E-learning metrics can be divided into “hard” and “soft” measurables.
Hard measurables include:
- Travel expenses: One of the core benefits of e-learning is that learners can log in virtually anywhere. This accessibility can dramatically reduce the costs associated with attending a training event.
- Production expenses: While course design and technology upgrades require an upfront investment from organizations, once an initiative is up and running, administrative costs should decline rapidly. When calculating the amount of money spent on creating print materials and other production costs, the financial disparity between live and online training often appears vast.
- Employee participation: If a company holds a monthly training, it’s fairly easy to track the number of people participating. You can then compare this number to e-learning participation levels. Because employees can access training materials anywhere and anytime, participation should rise.
- Overall training costs: Training costs should decrease as a result of e-learning programs, though it’s important to remember that the true cost differences won’t be apparent until an e-learning initiative has been underway for some time. As the business builds course archives and the process becomes more familiar, e-learning should lead to increased efficiency and lowered costs. Training staff costs can also be reduced significantly, as workers can learn at their own pace and join in from locations across the globe.
- Lowered liability: A well-trained workforce will make fewer mistakes, which should result in fewer accidents, reduced legal costs and a reduction in downtime.
- Worker retention: Employees who feel that the business is investing in them by offering enhanced training opportunities are less likely to leave the company.
While these figures tell an important part of the story – and are valuable because they are tangible and easily understood — they don’t offer a full assessment of the impact of e-learning. Soft measurables must also be incorporated in any comprehensive assessment of ROI.
Soft measurables include:
- Employee engagement: Online training software allows for a degree of personalization and collaboration that is hard to replicate in a physical space. A personalized approach to training is often hard to establish in live settings, especially when one trainer may be leading a room of dozens or even hundreds of employees. Today’s e-learning platforms are designed with employee engagement in mind and make this kind of personalized, collaborative experience scalable at a modest cost.
- Morale and loyalty: Well-trained, skillful employees aren’t just better workers – they’re usually happier workers, as well. Professional skill development ranks high on the list of priorities for today’s employees. Smart use of e-learning can make skill development a simple and enjoyable process. While morale or loyalty may seem like subjective assessments that can’t necessarily be traced to one cause, organizations can use employee feedback to assess the impact of e-learning. In fact, many e-learning platforms make gathering feedback easier.
- A greater sense of organizational purpose or unity: People who work in an environment that encourages innovation and collaboration are excited by their mission. Access to e-learning platforms with integrated social functions can help foster this spirit of camaraderie and intellectual exchange.
By measuring soft and hard ROI variables, organizations can help ensure that they are getting the most out of their e-learning initiatives, while also demonstrating the overall benefit of online training to the company.
An accurate assessment of ROI is an important yardstick in the evaluation of virtually every business, and e-learning programs are no exception. Companies should lean on these assessments not only to find out what’s working and what needs more refinement but to also establish the impact of e-learning on the business.
Drawing accurate ROI assessments can help ensure today’s companies make the necessary investments to obtain maximum value from their e-learning initiatives. That’s something that will be of great benefit to workers and businesses alike.
Want to learn more? Our Midwinter Month of Measurement is leading up to our next virtual conference, TICE Virtual Conference: Metrics Matter, a Focus on Strategic Planning, Analytics and Alignment. Learn more and register for the free event here.