Brilliant learning and development (L&D) practitioners have yet to successfully illustrate how to maximize return on investment (ROI) and effectiveness to their organizations. If they take this extra step, they often undercut themselves by not communicating the results to upper management or the company as a whole.
Evaluating the cost of any training program is pretty straightforward. Every business unit manager needs to negotiate, protect and defend their budget year after year, as it’s typically a “use it or lose it” scenario.
It’s the same drill for L&D leaders, but the difference is that they’re often challenged when it comes to proving the effectiveness of training. As every business leader knows, the only way to support — or even expand — your budget is to demonstrate proof of concept and maximize your ROI.
This hard-to-measure conundrum is where companies often throw up their hands or cross their fingers in the hope that training has an impact down the road. Even bottom-line-minded businesses seem oddly accepting and complacent with their inability to measure training benefits and validate an aggressive return on their training investments.
Most organizations don’t even take the most fundamental steps to determine if the training is even “working.” Does it actually improve knowledge, skills and performance as designed? Are employees more productive or better back on the job? Are we helping our top managers develop our next generation of managers? Are they doing anything differently?
ROI calculations literally put training benefits over training costs, but this calculation is futile if we can’t measure the benefits. Until an organization implements a solid training evaluation strategy and starts systematically measuring the benefits, it will never truly be able to measure ROI. Organizations won’t be able to make informed and insightful decisions about which training programs are more effective for their business and which delivery modes are most efficient.
“Effective vs. Efficient” Isn’t Mutually Exclusive
It wasn’t too long ago that L&D leaders had to decide between learning solutions that were either “most effective” or “most efficient.” Mercifully for L&D decision-makers, these two options are not mutually exclusive in the modern world of work. Choosing one direction does not preclude the other. Today’s synchronous learning models deliver remote and hybrid teams bite-sized, live learning at scale across the country or globe.
Being that effectiveness is the ultimate goal here, but not at an inflated expense, we conducted research to show the relationship between effectiveness and efficiency. From our research, live virtual training logs into the balance sheet at approximately $700 to $800 per participant, and the cost of conventional, in-person classroom experience is about $2,800 to $3,000 per participant. If we know the costs are roughly four times greater for the traditional experience, the only compelling reason someone would choose the classroom is that they expect it to be four times more effective. So, is it? That’s what we set out to discover.
When I conducted this study earlier this year, the answer was no — classroom training was not more effective than virtual training. In fact, this vastly cheaper alternative was just as powerful and, in some cases, even more potent than the far more expensive classroom because of one great equalizer — the post-training transfer climate.
A transfer climate is a term of art that learning geeks (like me) use to describe employees’ perception of the degree of support given by the organizational system that encourages them to share skills and knowledge among colleagues.
If training companies that are offering cheaper alternatives can capitalize on the effects of a positive transfer climate, they can certainly keep up or even surpass the effects of the most expensive training programs out there.
Transfer Climate and ROI
We call this critical post-training environment the “transfer climate” because it represents the environmental factors that can either help or hinder the “transfer” of learning from the training experience back to the job.
No matter how exciting, thoughtful and well-designed the training, you still need to ensure all the right factors are in place to nurture it through that critical and precarious incubation period. If the climate is suitable (warm) for learning transfer, the training sticks, thrives on its own and ultimately blossoms into fruitful returns. If the climate is not suitable (cold) for learning transfer, the training impact dies and all your time and resources wither on the vine.
These climate factors are the most evident and powerful predictors of business impact back on the job. Although things such as the quality of the training, the mode of delivery and the relevance of content were significant predictors in most studies, none of these factors weighed as heavily and directly on the outcomes of training effectiveness as the post-training climates.
For example, without active reinforcers within 30 days post training, learners will only retain about 10% of the class content. This means that most learners will apply only one hour of learning out of a 10-hour training course. Likewise, you’re only getting a $100 of value from your $1,000 training investment.
However, if a company can drive learning transfer and fully reinforce an hour of training back on the job, it could get the SAME value from that 1-hour class as a 10-hour class.
Although an exaggerated example, it’s why forward-thinking companies are positioned perfectly for a new era of training. They offer post-training practice labs, commitment follow-ups and intermittent reinforcers to make their training stick. They scale and space their learning to 60 and 90-minute intervals and doubled down on their post-training reinforcers and measurement efforts. And most importantly, they’ve ramped up their measurement strategy to prove it to their customers.
The Bottom Line
As dedicated training professionals, we put incredible resources (including our heart and soul) into developing and delivering the perfect content during our time with learners. But our best efforts and intentions predict only a portion of the overall effectiveness and impact to the business.
What happens after they leave the training experience and return to their jobs is an essential and powerful predictor. The transfer climate can make or break all the desired effects of training. If the transfer of learning into real-life actions doesn’t occur, then everything that happened before will be perceived as nothing more than a colossal waste of time and money.
So, what does all this measurement and transfer climate stuff mean in this new training era? Our current landscape puts speed, simplicity and results above all else. If training providers can offer simpler, faster and more effective training outside of traditional in-person experiences and give it a greater impact, they’ll win in the marketplace.
This means if they spend less time and resources on the training delivery and double down on the most powerful predictor of training effectiveness — the post-training climates that makes learning stick — then they’ll be able to deliver better results for their clients. Less time training that packs a more powerful punch is a clear win-win-win for learners, training providers and client stakeholders.
Now more than ever, we need to make critical decisions about how to train and develop our most valuable assets. With all the learning options in the training industry, we have to get better at measurement so that we can illustrate the difference. And if companies can’t measure and hone in on the most innovative training with maximum benefits and minimum costs, they will no doubt lose to the competition that ultimately gets it right.