Learning Strategy

Justifying the Value & Return of a Positive Learning Experience

More and more organizations want to develop a positive and engaging learning experience for their consumers and need an LMS to do so.

More and more organizations want to develop a positive and engaging learning experience for their employee, volunteer, or customer learning and development programs through a learning management system (LMS). A challenge some face is justifying the value of investing in an LMS to the executive staff and other decision-makers.

What are the benefits of moving beyond linear training to a positive learning experience? How do you quantify the value and return of creating a positive learning experience, and what role does an LMS play?

Here we will cover four ways to justify the value and return for your organization. But first, to better understand the opportunity, we’d like to clarify the difference between simply ‘training your staff’ and ‘creating a positive learning experience.’

The Difference Between Training and a Positive Learning Experience

Most companies understand the need for and value of training employees, volunteers, and even customers. For many companies, training involves disbursing printed manuals combined with classroom learning that takes both trainers and employees offline for some time.

This training methodology makes for long days and short attention spans, as it is difficult for anyone to absorb information in large quantities (let alone stay engaged with the material).

This training method also makes for reduced information retention and decreased ability for employees to take what they learn in training and apply it to real-life job experiences.

Learning Management Systems & Positive Learning Experiences

An LMS provides an opportunity for much more than straightforward, linear training but rather a positive learning experience designed to engage, inform, motivate, and develop learners constructively and efficiently at any time and from nearly any device.

The LMS is the tool necessary to make your business more efficient and goes hand in hand with the content you put in it to provide your organization with effective, results-driven training.

In a world of innovation, there are nearly limitless opportunities and methods to create learning modules that engage, motivate, and instruct learners and provide valuable feedback to organizations to ensure their learning and development are effective and up-to-date.

Return on Investment

“It’s important for companies to understand the first, most critical step in understanding the value of their learning experience and LMS is to assign a goal to the project,” shares Tobi Flowers, Director of Product & Services at TraCorp, “whenever possible, this should be a tangible, numeric goal that can be monitored and measured for change.”

For many, especially those with a financial mindset that recognizes numbers as evidence, you justify the value of a positive learning experience with the return on investment (ROI). ROI is a straightforward metric that calculates a percentage of the return, like so:

((Total Revenue – Total Cost) / Total Cost) x 100 = ROI (%)

Essentially, this formula demonstrates whether your LMS has a positive or negative effect on the company’s revenue.

A simplistic example of this is a company that provides a training course for employees to increase sales. It costs the company $10,000 to implement. Upon completion, the skills employees learn result in a revenue increase for the company of $40,000. Using this information, we can calculate ROI.

(($40,000 – $10,000) / $10,000) x 100 = +300%

However, ROI calculations for learning are not usually as cut and dry as the example above because determining the total revenue gained from an LMS is more complex.

Jack Phillips’ Multi-Step Methodology

Many organizations employ Jack Phillips’ multi-step methodology on ROI evaluation to gain an in-depth assessment of the value and return of their LMS.

With Phillips’s methodology, ROI evaluation consists of four main stages: planning, data collection, analysis, and reporting. All these steps are involved in making an ultimate determination of your LMS’s ROI.

Evaluation planning to develop a projects' objectives, evaluation plans, and the baseline data

Data Collection to collect data during and after project implementation.

Data Analysis to isolate the effects of the project, convert the data to monetary value, calculate the return on investment and capture the project's costs

Reporting to identify any intangibles, synthesize results and communicate findings.

Keep in mind that justifying the value and return of creating a positive learning experience is more than just dollar value; it can also be measured through other metrics like increased productivity, employee retention, or even reduced risks or elimination of costly problems.

Increased Productivity

Measuring how much money a company generates is one thing, but what about the employees’ overall level of performance?

Studies have shown that 42% of companies offering an LMS to their employees increased overall revenue by $30 in productivity for every dollar spent. By improving their employees' skill sets, a company has a natural upward progression.

This, in turn, has a positive impact on client satisfaction and retention. So, it is easy to see how the far-reaching effects of a positive learning experience can permeate an organization’s culture, client relationships, and employee performance.

Employee Retention

Providing a positive learning experience to employees does not just benefit the company through sales increases, client retention, and efficiency but also employee retention and loyalty.

Studies show that 87% of millennials and 69% of non-millennials consider career development an essential part of the job. It is such a priority that 94% of employees agree that they would stay longer at a company if it invested in their careers.

Employee turnover is a big issue in today’s complex world. The ability to retain key employees–especially in this evolving world of remote working–is a significant competitive advantage. Engaged staff who are mentally and emotionally invested in the company's success provide a limitless return.

Employees are looking for growth opportunities, a chance to enhance their skills, and extra motivation to buy into their organization–and an LMS is one way to amplify these opportunities and show your commitment to your employees’ futures.

By creating a positive learning experience, organizations reap the benefits of increased sales, higher efficiency, improved job performance, staying connected in today’s changing world, and happier employees. 

Reduced Risks

Many companies invest in an LMS and justify the cost by evaluating a reduction in risk or  solving a costly problem. For example, if your company keeps getting hit with workers compensation claims because people are getting hurt, you can create a comprehensive training program to prevent this from occurring in the future. An LMS can also automate training programs and requirements, eliminating the logistics of facilitating classroom training and lost productivity time.

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