ROI of Learning & Development Interventions

Speaking to many Learning & Development professionals I find it very interesting that many work with very cutting edge interventions but very little are actually looking at the return on investment. Why is that and what is a simple solution to measuring ROI of such inventions?

Professionals within the Learning & Development as well as the Talent function tend to be well educated, with various levels of degrees and further education within the field. They also tend to be very well networked and keep themselves abreast with the latest within their fields.

Very often though I feel that whilst they know what is cutting edge and are often very well qualified to deliver that cutting edge intervention, that they are less interested or even able to measure the return on investment of their programs. One reason could be that they are more excited by the latest tool than by figuring out which type of intervention is the most (cost-) efficient for their employer.

I find this astonishing considering who many man-hours (from preparation to the man-hours of each attendee) are invested.

What is a simple approach of measuring ROI of Learning & Development interventions?

Very often there is discussion around this topic as this was something new. I still find Kirkpatrick`s work from the 1950s – Techniques for evaluating training programs – a very workable and business minded approach. With some slight adjustments, you could follow this 4 step process

  1. Evaluate the business need and define the behavioural changes need
  2. Assess whether the learning objectives were met
  3. Assess whether behavioural change was achieved
  4. Measure the change in business result caused by that behavioural change

Evaluate the business need and define the behavioural changes need

The first step is to understand where the business is underperforming and define what behavioural change is needed to address this. This could be done by analysing successful employees and their approach in areas with a need of improvement. This could equally be done with benchmark data from competition or a goal setting exercise. It is paramount to identify sensible KPIs which measure the relevant behaviour as correctly as possible.

Assess whether the learning objectives were met

After the relevant interventions are designed and delivered it is the obvious first step to measure during and at the end of the program whether the relevant learning objectives were achieved as understanding forms the basis of behavioural change. This could be done by any form of test, presentations, structured interview, questionnaires and so on.

Assess whether the behavioural change was achieved

Using the same KPIs used in step one it is now time to measure whether the learning intervention actually resulted in behavioural change. Has the desired behavioural change not be achieved one needs to re-evaluate the intervention itself as it failed its key objective of changing a situation. Further methods to measure behavioural change could be structured questionnaires, 360-degree feedback, any other feedback process, manager interviews etc.

Measure the change in business results caused by the behavioural change

This final step will show the actual return on investment of the intervention. In this step, you measure the change in bottom line business result which you can attribute to the behavioural change. So for a sales team, for example, you could take revenue prior to the intervention and after as a basis corrected by any external factor. The difference between business result after the intervention versus prior is the return on investment which first of all should be a positive number. All investment into the intervention including all man-hours of everybody involved is the investment.

Summary

These four simple steps don’t only deliver a fairly straightforward way to determine and ROI they also deliver data needed to actually develop or select an intervention in the first place. It is an easy tool to generate line manager buy-in for such programs and could also be used to determine the success of your L&D and Talent professionals. You could go even further rand develop a bonus model on top of that. Over the years further models have emerged such as IPO and TVS, from my point of view all based in Kirkpatrick`s principles.