ROI in corporate training: what it is and how to calculate it

e-learning investment roi

When you make an investment, you then want to get feedback. This also applies to corporate training, so read on to find out what ROI is and why it’s an important figure to measure and analyze.

E-learning-based corporate training has exploded fairly recently – mostly as a result of the pandemic. It is therefore important for L&D teams to make it clear that ROI has fundamental value: both designed as part learner-centric approach and to make explicit what kind of gain employee training represents for the company.

the right investment

Why should you measure ROI?

First of all, ROI stands for “Return on Investment,” and it is the ratio you can use to measure the economic payback a company receives as a result of an investment. ?

In our case, this is a somewhat more difficult data to evaluate, because e-learning – like all corporate training – depends strictly on people. A simple financial calculation is not enough.

calculus teacher from south park

In addition, traditional learning management systems were struggling to provide evidence of effectiveness. This somewhat discouraged L&D teams, who for so long resigned themselves to not being able to prove their value. ?️

But there is great news! The industry has moved on and LMS data is no longer the only option. In fact, modern authoring tools, in-depth Learners analytics, and even sophisticated xAPI integrations make it possible to calculate ROI by measuring human engagement. ?‍?‍?

How to calculate ROI?

Traditionally, a ROI calculation takes the benefit (or return) of the investment and divides it by the cost (or investment) spent. Multiplying this value by 100 gives the ROI as a percentage.

ROI formula

Thus, ROI of corporate e-learning is defined as the positive financial result achieved by the training program divided by the amount spent on the program.

meme of difficult calculus

Set concrete goals

To make things simple, your training must have concrete goals, which can then be measured financially. Try asking yourself: “How will this training program make or save the company money?”

you need to save money when you can, but not in corporate training

Let’s give some examples:

  • In the area of sales, teaching how to improve the relationship between salespeople and customers helps the understanding of buyers’ needs. Increased sales is a direct result of this, representing the success of the learning program (Sales Training and Sales Enablement).
  • Want to take care of your employees’ growth? Devote yourself to training junior employees, cultivating their leadership or transferring other knowledge and skills to them! They will be ready for future promotion and you won’t have to resort to outsiders. ?
  • Invest in security by training your employees on the proper handling of customer data. No more fines – hopefully.

Let’s sum up

ROI is data that allows you to calculate the effectiveness of the corporate training you deliver to your employees. Depending on the various aspects that you analyze, the success of the learning program can translate into actual financial payback or savings.

Of course, you also need to know how best to invest in e-learning training without squandering your budget, but we’ve already talked about that here.

Stay tuned, because in the next article we will explain how to find the ROI calculation that is most useful for your business!

See you soon. ?

#neverstoplearning ?

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