In my post last week, I was lamenting about the steep fall in training budgets when the economy went through recession and the subsequent growth in training budget that mirrored the recovery phase. The conclusion that I was pointing to in my post was that companies reduced their training budgets to cut costs and hence they still view training as a “nice to have” function and not an essential function.
After further introspection (believe me, I do think about what I write before I write!), I now believe I could have drawn a different conclusion from the data. It might have simply been that companies cut costs across the board in reaction to a shrinking market and as a result, training budgets were also placed on the chopping block.
Both arguments seem to be logical and this brings to the surface the fundamental challenge in measuring the impact of training on business results. Survey after survey have shown that companies that invest in training see better business results. However, none of the surveys present a black and white conclusion. The reason is pretty simple. For example, if we claim that increased training spend has resulted in better sales, the finance & product management teams can also claim that the increased sales was because of their brilliant incentive and pricing strategies. In summary, the primary challenge in conclusively validating the impact of training on business results is our inability to isolate the cause and effect. So what are the practical strategies we can embrace to measure training impact on business?
1. Don’t be a prisoner of LMS Analytics: LMS Analytics does NOT measure learning impact on business. LMS tells you whether an employee reviewed the course and passed the assessment. While this is an important activity to track, it does not give us any insights on whether training is positively impacting business.
2. Focus on Behavior Changes: The objective of a training program could be to impart knowledge, comprehension of concepts, application of concepts in real life situations, and most importantly, changes in behavior in way that positively impacts business results. Even a compliance course on gender sensitivity has a business impact even if the training around gender sensitivity is just a document with do’s and don’t s. It is important to identify the behavior changes are that you are striving to bring about.
3. Measure Behavior Changes: Always think about how you will measure behavior changes. This question will immediately prove the fact that we need to think beyond the LMS.Here is a simple example:
A training program on communication skills should aim to give the employees necessary knowledge and tools needed to become better communicators. This objective can be validated by embracing simple techniques.
a. Sample a set of emails sent by the employee after the training program and compare the quality of these emails with that of emails sent before the training program.
b. Ideally, there should have been real reasons for even organizing a training program on communication skills. The reasons could be complaints from customers or frustration and poor productivity among team members as a direct result of communication break-down. Track customer or team feedback specifically on the improvements perceived after the training program to gauge the impact of training.
c. In some instances, like call centers, calls with customers are recorded for analysis. This may not be possible in other businesses. However, getting creative in hunting down evidences of behavior changes is the only way out. If you look hard enough, you are bound to find a way.
4. A/B Testing: Websites and eCommerce portals often resort to A/B testing to validate hypothesis. For example, you will often find two different versions of the same web page being tested. The difference is a minor variation in language, color or font or layout. This method of testing allows us to nail down the impact of a specific variable on end results. The challenge that I articulated upfront is how do we isolate the impact of training on business results when business results are dependent on several parameters such as the employee attitude, motivation, product marketing, pricing, customer situation to name a few (this list can become endless). Retail chains often test out a new store layout with better trained staff on just a few handful of locations before they scale. Similarly, the training program can be designed upfront to validate the business impact by comparing the performance of a group of employees that receive the training program with those that don’t.
5. Embrace new tools for measurement: We are still in the early days of correlating training metrics with business data. As Big Data tools gain ground as a means for identifying such correlations, we should have more concrete evidence of impact of training on business results. TinCan API is probably the first major step towards freeing us from the dependence on just the LMS for tracking training data. Visionary training departments should invest their time and effort to embrace these new models and tools in order to once and for all elevate the profile of training as a key element in ensuring successful business performance.
Srinivas Krishnaswamy
I love to read and share thoughts on technology, enterprise learning, mobile and any thing cool that impacts enterprises.
learningpilgrims 
thank you for great tips. i will definitely think about it while analyzing my joomla based lms.
[…] know what business challenge they are trying to address before they organize a training program. Measuring ROI should be a mandatory process (yes, even for compliance training). The training department […]